What Are The Stepping Stones To Financial Freedom?

As members of Financially Fit Bootcamp, you’re well aware that a surplus of income is the cornerstone to building your Freedom Generator. Your Freedom Generator, a collection of investments that produce Cash Flow and intended to replace your working income, you can buy your time back. But MindShift.money research shows that only four percent of the population are on the track to reach Financial Freedom. The remaining 96 percent? They’re not. What we’ve found is that there are four fundamental behavioral differences between these two groups that result in these very different outcomes. Let’s take a look, and if you’re not on the road to Financial Freedom, you’ll be able to quickly see where and why you’re off track. And if you are off track, take one step at a time until your back on the path to Financial Freedom.

Stepping Stone #1: They Pay Themselves First

The majority of people pay themselves last. Remember: The more you can pay your future self, the quicker you build your Freedom Generator. If you can find a way to increase your surplus, even by a few hundred dollars—which we’ll get to in just a bit—these small steps will lead to a dramatic increase in income overall. But even if you increase your surplus, you won’t get the benefit if you don’t send that money to your Pay Yourself First account.

Stepping Stone #: They Live On What Remains

The nearly four percent who are on track to Financial Freedom have no consumer debt. Generally no more than 25 percent of their take-home pay goes toward debt, and they clear their debt by age 50. That means they have a lot more money to set aside. Contrast this with the 96 percent who typically spend half their take-home pay on bank interest alone from car loans, credit card debt and a mortgage. So it’s no surprise the four percent have a different outcome than those who live above their means.

Stepping Stone #3: They Protect Themselves

Most people don’t have an adequate surplus to start with. They generally lack an awareness of what is a need versus a want. They forget they don’t need certain things and are choosing to have them. Instead of having a surplus, the majority of folks feel their money is evaporating in the hot desert sun.

To protect yourselves, look at your expenses, what you’d be prepared to cut out, or cut back, so you’re happy living your life today and on your way to buying your time back. If you’re intentional about the way you live your life and what you do with your money, our case studies reveal that over a period of a few years, you can create a surplus of $1,400 to $3,000 after paying off our debts.

Harness your surplus for your future. Create the structure and support to build your Freedom Generator. To start, one-third of your take-home income goes toward your Security Buffer and the remaining two-thirds goes toward killing your debt.

Stepping Stone #4: They Bring in Extra Income

What are some of the things that aren’t value to you but could be to someone else? Those items just might be able to bring in some extra income for you. For instance, Dr. Tony’s oldest son made a few extra hundred dollars selling unused items he found around the house on eBay. But that’s not the only benefit! He also helped someone out there save by spending less on quality items.

We live in an incredible time to find gig jobs. Take full advantage. In our geographic agnostic age, you’re able to choose from a variety of gigs, no matter where you live. From UberEats to Airtasker, TaskRabbit, Fiverr and Upwork, if you work hard you can earn small amounts of extra cash. And just a few hundred dollars a month can accelerate your Financial Freedom dramatically.

If you’re too busy or not prepared to start a business full-throttle, side gigs can help you build your Freedom Generator.

There is unbelievable magic in Paying Yourself First versus pay yourself last. So be sure your main paycheck hits your bank account, and pay yourself once a week. Once the money runs out you, stop spending.

And once you cover the basics, enjoy life. Indulge in that fancy dinner or massage if you like. Find the balance in your life that gives you happiness. You have one life, and you should enjoy it.

The views and opinions expressed are those of the guest author and do not necessarily reflect the views and opinions of MindShift.money.

image credit: Bigstock/natulrich

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