You want more time to dedicate to your family, your passions and living your life. You want to stop exchanging your time for money. Your goal is Financial Freedom.
And to reach Financial Freedom… you have to invest.
Choosing the quality assets you need to build a Freedom Generator seems risky when you first start investing. Because you probably don’t have the know-how to make good decisions. So your instinct may be to avoid investing altogether and just keep saving your money.
But buying quality assets that generate Cash flow, building your Freedom Generator and Making Your Money Work for You is the only way to reach Financial Freedom. So rather than avoid investing, educate yourself and learn how to take control of your finances. Because leaving your future to chance is riskier than investing.
What’s More Risky Than Investing? Doing Nothing!
Your money can’t be a source of income if you don’t send it out to work for you. Once you’re Financially Fit and Financially Secure, investing in quality assets that regularly put money in your pocket is the necessary next step. The surprising truth is that 96% of people are financially insecure, because they think their money will somehow manage itself and last through retirement. But the reality is 75% of people run out of money within the first five years after retirement. The four percent who are Financially Free use their money to invest and create Cash Flow they can use now.
What’s More Risky Than Investing? Not Diversifying
No investment will give a good return all the time, so keep that in mind when you’re building your Freedom Generator. Investing in different types of opportunities limits the negative effect on your long-term plan should anything happen to that investment. So protect yourself by diversifying your assets.
What’s More Risky Than Investing? Not Reinvesting your Earnings
The 4% know that Freedom is a number. And that number is the amount you need to live the lifestyle you choose. Automating your allocation to your Pay Yourself First account, adding extra income whenever you can and always reinvesting your earnings is the key to reaching your Freedom Number quickly. The more money you have working for you, the more Cash Flow you’ll generate and the faster you’ll reach Financial Freedom.
What’s More Risky Than Investing? Not Investing for Cash Flow
The real power of investing comes when your passive income, or Cash Flow, from investments replaces your income from a salary. Conventional wisdom tells you to invest for net worth, but that’s wrong. When you purchase assets that don’t generate Cash Flow, you can have a very high net worth, but not have money for groceries.
So always choose quality investments that put money in your pocket rather than taking money out. One important point? An investment that sucks up too much time is exactly the same as one that actively costs you money.
When your goal is to stop exchanging your time for money, investing carefully and thoughtfully is the path you must follow to reach Financial Freedom. Start by Paying Yourself First, Living On What Remains, and then Make Your Money Work for You.
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Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.