Financial freedom is crucial to your success, well being, and ultimately, your happiness. But what is financial freedom anyway?
Financial freedom is the ability to maintain your current lifestyle without having to go to work for someone else and punch a clock. It can be achieved by creating enough passive income to replace your earned income.
Financial freedom is not paying off your mortgage, credit cards and other debts. You cannot attain financial freedom by paying off debt alone. Only by bringing in enough monthly passive income to pay your lifestyle expenses and your debts can you say true financial freedom has been attained. By the way, it is possible to have financial freedom while having a mortgage and credit cards.
The Benefits of Passive Income
So why would someone want to be financially free? Why would anyone be interested in growing their monthly passive income instead of paying off mortgage or credit card debt? There are many benefits, but here is the top reason why…
You’ll be able to devote more time to passion projects.
Here’s a question for you: What’s your passion project? What would you work on if you had more time, just because you love it? Imagine for a moment being able to block off four hours, eight hours, or even an entire day or weekend just to work on your passion project.
Is there a conference or event related to your passion that you’ve always wanted to attend but couldn’t because you only have two weeks of vacation per year? Imagine how many songs you could write, how many pieces of art you could create, , how much writing you could do, and how many quilts you could make!
While you’re trading hours for dollars, you have very little time to do the things you’re passionate about. With two hours at the end of your busy day and weekends that tend to fill with errands you couldn’t get to during the week, you may find it’s been weeks or even months since the last time you’ve worked on something for love rather than money.
I mentioned the two week vacation most employees have. Well it used to be vacation time but nowadays it’s lumped in with sick time and called paid time off. Two weeks is not very much time to be sick and take a vacation each year.
Imagine if you could pick a place you’ve always wanted to go and just go… without a return date. Visualize the place, smell the smells, and listen to the sounds. When you’re financially free you can travel long term if you desire, because the business system you’ve created will continue to work without you and the passive income will keep rolling in, wherever you happen to be. This is called location independence, and it’s one of the big reasons why I built a Short Term Rental business.
Why time is more important than money
This might sound weird if this is your first time hearing this idea but time is significantly more valuable than money.
Time = life. Time isn’t something that’s measured by a watch, it’s literally your life. Money = paper, or numbers on a bank statement. You can always find a way to earn more money, but, you cannot be guaranteed another day of life. Once time passes, you can never get it back. How you spend your time is how you spend your life.
I know people who earn well over six figures annually but, they spend twelve plus hours a day, six or seven days a week, working. But even though they earn so much money, they never have time to do the things they enjoy, let alone relax and enjoy the things they buy. At the end of the day, you need time to spend money. And at the end of life, nobody says they wished for more money, they wish they would of had more time to spend with loved ones.
According to this research study, published by the Society for Personality and Social Psychology, it’s a proven fact that having time to do the things you enjoy brings more happiness. According to the lead researcher “having more free time is likely more important for happiness than having more money.”
Your time is not your own
If you’re like most people, you’re working for someone else. There’s nothing wrong with that in the short term. Just know that your time is not your own.
When you take your employer’s money, you’re committed to being somewhere to help that employer’s agenda, typically for an hourly rate or a salary. But, your time is not your own. Your employer has bought your time (life). So, for eight hours per day, you work to make someone else’s goals come to fruition. When you say yes to one thing, you say no to something else. In this case, your dreams. Your time is not your own if you work for someone else.
Your time is running out – why wait?
Our time is running out. The sands of the hour glass continue to fall. We just don’t know how many grains of sand remain to fall.
As people age, their bodies break down. They are no longer active and agile as they once were. The time to plan for that time is now. Plan for the time when you’re no longer able to provide for your family because your back goes out, or you can’t stand on your feet for eight hours, or you no longer have the energy. Find a way to earn a passive income, for when your body physically can’t work anymore.
Why wait to live? Why wait to start doing what you’ve always dreamed of doing? Why wait to travel? Why wait to start controlling your own destiny? There’s no better time than the present!
“Ants think winter all summer. That’s an important perspective. You can’t be so naive as to think summer will last forever. Ants are gathering their winter food in the middle of summer. An ancient story says, ‘Don’t build your house on the sand in the summer.’ Why do we need that advice? Because it’s important to be realistic. In the summer, you’ve got to think storm.”
If you think you’re safe and secure in your job, think again
A lot of people think the safest route to financial stability is by being an employee. Having a guaranteed salary and health care. But these days, that’s not the case. I hear the same story from my Airbnb guests again and again. They worked at a company for 15, 20, 25 years and one day out of nowhere, they were laid off. You’re not safe at your job.
Of course, I don’t recommend anyone quit their job without a way to support their family and meet their financial commitments. There’s nothing wrong with having a job. But, I highly recommend that you start now, today, to find a way to start earning your own money.
Start by waking up an hour earlier to study a new skill that will lead to you taking action. This next one is very important, you need to take action. Knowledge is NOT power—it’s potential power. I listen to a lot of audio books on a regular basis (there are actually 10 books every Airbnb host should read), this is how I keep my mind sharp and on top of the latest trends. I carve out time in my day, everyday, to make sure I’m learning something new.
If no action is taken, nothing will be produced. Start producing. Little by little, your production will increase and there will come a time when you realize that if you were to invest the time you’re spending at your job into your own business, it would yield more than your salary. That’s the point at which your job is costing you more than helping you.
At this point, it’s important to evaluate whether you can immediately quit your job or do what a lot of people do and taper down their hours. Maybe start by working 50 hours for your employer and 5 hours on your business per week to working 40 for your employer and 15 on your business. At some point you will have to take the plunge and tell the boss ‘I quit’ because you’ll realize you can make more by working on your own business than working to make someone else’s dreams come true.
One Final Note
Financial freedom is the ability to earn enough money to afford your lifestyle without having to go to work for someone else. There are countless benefits to living a financially free life, even more than I have covered here. So, I implore you, work on a business that will pay you so you get your time—and your life—back to be truly financially free.
And stay tuned, because in part 2 of this blog, I’ll be sharing how I was able to achieve financial freedom within less than four months of starting my vacation rentals business with Airbnb!