Regardless of how or why you started your business, you have to start with the end in mind. And your end goal must go beyond the financial. I’m not talking about a single profit target, a lofty number you set for yourself and strive year after year to hit.
I’m talking about a clear vision of the ideal life you want to live. This ideal life doesn’t have to involve riches and excessive luxury goods. You can choose whatever life you want.
Maybe you want to spend more time with family or retire early and travel the world. Perhaps you’d like to devote even more time to your business, to transform it into an empire to change the world.
The importance of Financial Freedom
True Financial Freedom comes when you stop trading your time for money. Now, you may say, as an entrepreneur, you love what you do, and you’re living your ideal life right now. In other words, you feel like you never want to do anything else.
Everyone has their own vision of an ideal life. There’s no one right answer to how you want to live. But whatever your own personal vision is, you have to start planning how you’ll get there from the time you start your business.
If you feel you’re living out your true purpose through your business, wonderful. But you might not be able to sustain that life forever. If you don’t plan for Freedom, when you inevitably reach a time when you can no longer sell your time for money, you won’t have access to the support you need.
And that limits your future.
Because, no matter what, income is always going to be necessary to buy necessities and support your lifestyle. That’s why planning for Financial Freedom is so essential. Without it, you’ll never be in a position to live your ideal life, and you may never even be truly Financially Secure.
You, as a Business Owner, have immense power. Although you have far more responsibility, you have more control over your Cash Flow than traditional employees do. So you can use your business to help you along the path to your personal Financial Freedom — whether it’s by taking money out of the business as you go along or planning to sell the business. Either way, ultimately, you’re building a passive stream of income to support your monthly financial needs.
One more great thing about Financial Freedom? If you’re still in your business, or even building a new one, you suddenly have the option to make business decisions without the restraint of supporting yourself.
The need for balance
If you’re like the average Business Owner, you might feel like managing your business and your personal financial health is an impossible balancing act. And that’s why so many Business Owners neglect the personal side.
I get it. But everyone needs Financial Security in both the long- and short-term. Losing sight of this need, given the constant amount of work required to run a business, is too easy.
Keep in mind ignoring your own finances is how more than half of all Business Owners end up worse off than their employees at the end of their working lives. They were so absorbed in their work, they let their Financial Security suffer.
At the root of the problem is too little focus on personal Freedom coupled with too much focus on immediate business goals. The outcome — you’re stuck in an endless cycle of trading time for money. You focus on pleasing everyone else, from customers, to investors, to employees, and fail to consider your future self.
As a Business Owner, your business should be the key to your Financial Freedom, not an obstacle.
The value of intentional planning
In addition to knowing what your ideal life looks like, you have to know the Cash Flow required to support it. I call this your Freedom Number, and it’s the monthly amount of money you need to buy your time back. This is another example of starting with the end in mind. You need to know where you’re going to know how to get there!
Picture your ideal life, calculate the monthly (passive!) income you need to support it, and with a little bit of intentional planning, you’ll have a business that leads to personal Financial Freedom.
Regardless of what stage you’re at in life or your business, it’s never too late to take the first step toward your ideal life.
image credit: Bigstock/Tanyastock
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.