The freedom to choose is one of the most powerful characteristics of financial freedom. Why financial freedom should be your goal Now onto the reasons why financial freedom should be your goal. Because of taxes, you have to make somewhere around $1.30 or $1.40 in order to put $1 in your pocket. It’s also important to remember that it’s much easier to save $1 than it is to make $1 in income. A combination of investing that saved money in real estate each year and the power of compounding made a big difference in our trajectory towards achieving financial freedom. Seen another way, this means we moved ourselves towards financial freedom $12,000 faster each year. This translated into $12,000/year less in passive income that we needed to generate to cover our daily living expenses. With just these two simple changes, we reduced our monthly spending by over $1,000. We ate out less and made fewer visits to Starbucks. Increasing your monthly passive/ semi- passive incomeįor example, while Kenji and I were building up our real estate holdings to increase our semi -passive income, we were also working on reducing our spending. It’s important to note that there are two ways to reach financial freedom:ġ. In other words, you no longer have to work at your job in order to pay the bills. When you reach this point, you decouple work from money. While there are a lot of different definitions of financial freedom out there, we think it’s useful to think of financial freedom as the point at which you generate enough passive or semi-passive income to cover your daily living expenses. When you set a clear target, all of the steps you need to take to achieve that target become clear and actionable.īefore we dive into the reasons why financial freedom should be your goal, we want to define what we mean by financial freedom. Here at Semi-Retired MD, we are strong believers in goals. Regardless of whether or not you are happy in your job, creating an alternative income stream that rivals the income from your day job gives you the freedom to choose, reduces stress, confidence when you gain control of your finances, better prepares you for those curveballs in life and allows you to gain even more enjoyment out of life.įor those of you who have already achieved financial freedom, Congratulations!įor those of you who haven’t yet, it’s not because you don’t have the resources or the ability, it’s simply because you haven’t set it as a goal. Summary: In our very first post (yes! this is post #1!!), we offer our definition of financial freedom and why we think it is so critically important for everyone to pursue as their goal.
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