Most individuals are instructed to get an education and then a job. Then, after landing a solid job, the recommendation is to save a percentage of each paycheck for the next 40+ years until retirement. This linear path from school until death, means spending the majority of each day at work, climbing a ladder, to get a raise, to buy a bigger house, to fill it with more things that weren’t necessary to begin with. Then only after retiring will there be room to explore, relax, or spend time with family.
This is the time-money paradox where you trade the majority of your time for a paycheck, and then spend the majority of each paycheck on depreciating material things. It’s a vicious cycle that often continues in perpetuity. Instead of material possessions, prefer to have freedom.
What would having the freedom to choose look like to you? Being free, financially, may mean different things for many people. Is it maintaining your desired lifestyle without a regular paycheck? Instead of defining financial freedom as a single point in time as in retirement, consider it in these ways:
First Stage: No Freedom
Most of us begin our money journey with no freedom and rely on a single paycheck. Many remain at this stage all their lives.
Second Stage: Temporary Freedom
To move into the temporary stage of financial freedom, you must spend less than you earn and create a reserve of savings. Otherwise, you will be forced to continue working indefinitely because your lifestyle depends on your income. As you begin to save, you might invest your savings to produce another stream of income. Or, you might start a business on the side, creating another stream of income. Temporary freedom grows as your savings grow.
Eventually, you will have enough money saved to feel comfortable switching jobs, starting a business, returning to school, traveling for a year, or any number of other activities that are impossible to achieve while working full-time. These can be major life changes, but they are not permanent. Your freedom is temporary until your income exceeds all of your expenses.
Next week, we will consider the other types of freedom.
Think, plan and be proactive.
In Black Jesus’ Name and for His Fame, May I AM THAT I AM GOD prosper you.