Steps on a Journey to Achieve Financial Freedom Archives

Steps on a Journey to Achieve Financial Freedom

Financial Freedom 101 – Active Income vs. Passive Income

October 14, 2021October 14, 2021
by Mr. Profit Panda

We all want to make a profit in the long run and achieve financial freedom, but to do this, you need first to understand the difference between active income and passive income (check out our video or continue reading).

Passive Income

Passive income is described as income that is consistent and takes little to no effort to sustain, as you are mostly uninvolved. To optimize the benefits of receiving a passive income, it is recommended that you diversify your portfolio with several income sources rather than sticking to just one.

Active Income

Income earned as a result of services given is referred to as active income. Examples of active income include:

Salaries
Commissions
Wages

You must do something to receive active income. To earn that money, you’ll need to put in some effort and time.

Why You Shouldn’t Rely Only On Active Income

One of the world’s richest men, Warren Buffett, once said, “Never depend on a single income.” It’s so crucial nowadays to have multiple sources of income and not just rely on your salary. Doing this makes you vulnerable to poverty, and you want instead to be financially free.

To be financially free, you need to have a positive cash flow. You can learn about cash flow and why it’s so important in our video What is Cash Flow and Why it Matters to Financial Freedom.

Conclusion

Knowing the difference between active income and passive income will help you reevaluate your finances. You can make new financial goals for the short and long term once you rely on more than one source of income. If you want to learn more you should check the following video: Financial Freedom 101 – Active Income vs. Passive Income

Steps on a Journey to Achieve Financial Freedom

Financial Freedom 101 – It’s Not About How Much…

August 18, 2021August 19, 2021
by Mr. Profit Panda

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki

World is full of famous examples of celebrities who have made millions and lost everything. Those examples prove that it’s not how much money you make, but how much money you keep. Keeping money is a skill that not all of us have. You should always keep at least 1-20 % of your income and make the money work for you. If you can make money while you sleep, that is a good sign!

How much you pay yourself is more important than how much you make. This might sound like a crazy concept, but investing in your future is essential to reach financial freedom. Improving your money management skills is one way of reaching your goals. This video discusses what you need to do to pay yourself first and the number one rule to get rich.

To learn more about the concept and how to keep your money by watching our video: Financial Freedom 101 – It’s Not About How Much Money You Make, But How Much Money You Keep

Financial Freedom 101 – What is Financial Freedom?

June 16, 2021September 9, 2021
by Mr. Profit Panda

Achieving financial freedom should be one of your main goals in life. However, to see results and achieve financial freedom, you need to continue learning to increase your financial intelligence and act on what you know. To understand what financial intelligence is, you can watch a video on our YouTube channel titled Explained: What is Financial Intelligence.

But, you need to also be smart with your money, as people tend to spend their money quickly as they start to make more. In this video titled Financial Freedom 101 – What are the Steps to Achieve Financial Freedom?, you will hear the story of professional boxer Mike Tyson, who had it all. Tyson earned over $30 million from his fights and $300 million throughout his career. In 2003, at the age of 37, Tyson filed for bankruptcy!

You may think that it solves all your financial problems if you can reach a high-paid job position. But, unfortunately, a 6 or 7 figure salary or a significant financial investment does not guarantee financial freedom.

Everyone has a different concept of what financial freedom means to them. Most would agree, though, that financial freedom is when you’re so financially secure, you forget it’s payday! So think about it – what does financial freedom mean to you?

The Core Concepts of Financial Freedom

The following core concepts are explained in the video and can help you understand financial freedom, and by putting them into practice, you can be on your way to financial freedom. So, let’s do a quick summary of each concept.

1. Track Your Spending

Your first step is to start tracking your spending. Determine how much you would like to spend in ideal situations, such as when you retire. This will give you a goal to work towards and allow you to work out a plan surrounding your spending habits until then.

Create a budget at the start of each month to help you commit to tracking your spending. It will help you know your total income and how much needs to get allocated to your expenses. If you find yourself in a challenging financial situation during the month, don’t be too hard on yourself, and instead, learn from your mistakes.

Overspending can lead to bankruptcy in the long run, so focus on how much money you can save and not on how much you are earning at that moment. Aim for a positive cash flow and invest your savings.

2. Make Your Money Work For You

Now that you have your monthly budget in place, you need to make your money work for you with assets that can give you a regular income stream. You want to make money while you’re sleeping each night! To achieve this, you need more assets than liabilities, as they pay for your liabilities. If you don’t know the difference between an asset and a liability, click here to learn more!

The ways that you can make your money work for you include:

Invest in the stock market
Invest in real estate
Invest in anything that can generate an income for you while you sleep

These investments will generate a passive income in the long term.

3. Pay Off Your Bad Debt

Paying off bad debt is a significant step in achieving financial freedom, and sometimes you need to take drastic measures to pay them as quickly as possible.

The measures you can take include the following:

Create a plan to pay your debt and decrease your expenses
Pay your debt from highest interest rate to lowest interest rate
Live your life where less is more
Try a 30-day “no spend month”

4. Plan For Your Future

Life has many physical and emotional challenges, and we need to be prepared for all of them. An emergency fund will help you prepare for anything life throws at you.

Determine for yourself how much you need to cover yourself and your family in a worst-case scenario emergency such as losing your job, and start saving towards it. Make sure your money is easily accessible, as emergencies usually need to be paid for immediately!

5. Make Your Personal Finances Smart Habits

Your personal financial habits need to be smart, as they’re the best investments for your future. Smart habits include:

Managing you money
Paying your debt
Saving for emergencies

Conclusion of Financial Freedom 101

Reaching financial freedom is not difficult if you work hard to achieve your goals. Be wise with your spending habits, have goals, pay your debt quickly, and start investing as soon as you can.

Focus on increasing your financial intelligence, and you will reach financial freedom sooner than you think!

How to Invest Your $1,400 Stimulus Check or Any…

April 26, 2021May 10, 2021
by Mr. Profit Panda

Recently the American Congress and White House passed the bill supporting President Joe Biden’s $1.9 trillion COVID relief package. Eligible individuals will each receive a base amount of $1,400 to help them through the pandemic.

While some will use the money to pay bills or fund their emergency funds, others will invest either a portion of or the full amount.

It can be a great option to invest your stimulus check, as you get the opportunity to build wealth effortlessly. If you end up taking this path, make sure that you leave your investments alone for a couple of years to benefit from compound interest.

Where to Invest?

If you watched the video of How to Invest Your $1,400 Stimulus Check or Any Check, you would know that we gave examples for Index funds (S&P 500), buying stock directly from a company, and buying cryptocurrencies such as Bitcoin.

There are many other ways to invest your money, such as:

Investing in your 401(k) for retirement
Dividend funds
Bonds
Real estate

No matter which method you choose, letting your money work for you through compound interest and growth is the best way to take care of your financial future.

Set a goal for yourself and take advantage of portfolio diversification. Remember that investing $1,400, or even just a portion of it, means that you’re willing to risk losing it, as we can’t always rely on the stock market or any other investment for that matter. But at the same time, you can’t gain anything if you don’t take any risks.

Whatever you choose to do with your stimulus check, choose wisely!

Educate yourself on investing, and make sure to follow us on social media and on our website to learn more about how you can reach financial freedom. We’re here to share our experiences with you and give you tips on taking care of your money!

Steps on a Journey to Achieve Financial Freedom

Simple Ways to Save Money – Step Towards Financial…

April 17, 2021May 10, 2021
by Mr. Profit Panda

Financial freedom may seem to be a mystical and unrealistic task, but there are some practical and measurable steps to achieve it. These realistic ways will help you save enough money that you will never have to look for a salary again.

Many individuals have gained financial stability, and others have also become wealthy as a result of doing nothing more than following these simple and rational steps towards financial freedom. But first of all, you need to know what financial freedom is. It is all about getting sufficient surplus income to cover your housing expenses.

That’s not being wealthy or making good money; it is all about making enough to finance your bills so you can focus your attention on performing activities you enjoy instead of doing something just to make extra cash. That’s only possible if you are ready for that too.

Best Ways to Save Money and Achieve Financial Freedom

1. Prepare for life’s uncertainties

Be prepared for the uncertainty of life: Unexpected expenses are one factor that can interrupt your goal of financial freedom. As a result, being prepared is crucial. You can build a contingency fund for covering unexpected expenses and get medical insurance to ensure that your money isn’t spent on medical expenses.

2. Track your spending

This is one of the best ways to save money and move towards getting financial freedom. There are several tools and apps for keeping a track of your expenses and savings. These apps include customization features for assigning objectives on a regular basis.

3. Take full control of the finances

How much money do you spend regularly? Most of us do not care about our spending. It may be scary to face it, however, you should. You should establish a plan. When it comes to allocating your resources, the 50/30/20 rule is a reasonable model.

This will help the majority of people, but keep in mind that we’re looking to gain financial freedom! It’s best that you can save as much money as possible. This proportion does not imply that you would allocate the whole 50% on essentials.

4. Extra sources of income

Your 9 to 5 job may not help you to pay off your debts. You need to find extra sources of income to get financial freedom. Think out of the box or get the recommendations of some experts to get the ideas. You can make some investments or learn some new skills like freelancing to increase the cash flow.

5. Learn about the various investment options

Work with a professional investment advisor who will assist you in maximizing your long-term investing opportunities. The best part is that the earlier you start investing and keep saving, the more time you’ll have to see your cash flow increase.

The following are some investment options.

College Investing
Investments in Real Estate
Investing in Taxable Assets
Savings for retirement

Conclusion

It’s not really straightforward to figure out how to start saving. We understand how tough it is to break bad habits and make long-term progress. Buying a new jacket, another shopping bag, or a bike is a lot better than saying no. It’s cheaper to buy pizza or drive the family for supper than it would be to adhere to the food schedule.

Check our YouTube video on 5 Simple Ways to Save Money & Take Control of Your Finance. Saving for your commendable investment ambitions is an important aspect of your overall financial freedom because it helps you to get out of bankruptcy while still allowing you to gain resources.

Steps on a Journey to Achieve Financial Freedom

How to Achieve Financial Freedom in 20XX

February 4, 2021August 15, 2021
by Mr. Profit Panda

Your finances can take a toll on you mentally. We all want to have financial freedom, but many of us don’t know how to achieve this life goal. Living a financially free lifestyle can be done, but it will take time and effort. We are here to help you!

What is Financial Freedom?

Financial freedom is the consequence of the act of being smart with your money. You get to make life decisions without stress as you get prepared financially for all financial impacts. You’re in control of your finances without your money controlling you. You’ll also prepare yourself for unexpected emergencies.

Anyone can achieve financial freedom through smart saving and investing, especially if you are patient with a clear focus. You will be on the right track if you’re controlling your spending and having a positive cash flow.

How Can You be Financially Free?

Achieving financial freedom relies on your motivation and setting goals for personal finance. You need to set goals for yourself to help keep you motivated. For example, if you want to be financially free by the age of 30 and retired by age 50, then spend time working on a plan of action and sticking to it.

By putting in the work and following these six helpful steps, you will be on your way to being financially free sooner rather than later.

1. Track Your Spending

It would help if you spent less than what you make to reach financial freedom. Spend time every month to create a budget, and it’ll show you what you’re earning and what your expenses are. Try to stick to your budget and not contribute to unnecessary spending.

2. Pay Off Your Debt

Nobody wants to spend their lives paying off debt. Car loans, credit cards, student loans – these are all expenses that you need to get rid of quickly. Start by paying off your debt with the highest interest rate and work your way down to the lowest interest rate debt. Once your debt gets paid, you’ll have money freed up that you can use for saving and investing.

But remember, debt is not always a bad thing and you should not fear it. If the debt brings you positive cash flow (gives you more than it takes away) you may want to consider even taking more debt. Spreadsheet is your best friend, trust it.

3. Reduce Your Expenses

Start teaching yourself how to be good with money, and one of the best ways to learn is by cutting your expenses. Try to reduce impulse buys, such as unnecessary subscriptions or groceries. Your new money management skills will benefit you in the long run, and these small changes will have a significant impact over the years to come. Checkout more tips from our video 5 Simple Ways to Save Money.

4. Increase Your Income

Unfortunately, saving, investing, and living a frugal life is not the only thing you need to be doing to reach financial freedom. Finding ways to increasing your income will help you pay off your debt faster, save and invest more, and put you in a better financial situation. Ways to increase your revenue can include:

Get a second job part-time, like a side hustle. Whether it’s delivering pizzas over a weekend or selling unused items on eBay, you will be earning extra money to increase your income.
Ask for a raise at your work. Approach your boss or HR department and ask them if you can get a raise. The worst that could happen is they’ll decline your request. Best case scenario? You’ll be earning more each month! You can boost your chances to get raise by knowing your real value. Learn more how to do that by watching this video: Salary Expectations vs. Reality & Product Pricing.
Put in extra hours at work to qualify for overtime.
List your spare bedroom on Airbnb. If you have an extra room not being used and don’t mind the occasional stranger sleeping over, why not make some money?

5. Invest!

Investing your cash will help you reach your goals faster. Whether you put money into an interest-bearing savings account or invest directly into companies or via funds, you will make your money work for you.

Try to focus on investments that generate passive income streams over the long term. If your work provides 401(k) benefits, make sure to contribute towards it. Most companies will match your contributions so that you can save towards your retirement quicker.

With investing, you are setting your money up to grow with compound interest. This is achieved by the interest growing interest. As Albert Einstein has said: “Compound interest is the 8th wonder of the world“. You should check out the 8th wonder before you check out the other seven!

Other investment options include investing in real estate or index funds. Make sure to research the type of investment in which you’re interested. Money makes money, and you don’t want to miss the opportunity!

6. Start Saving

You will never be financially free if you don’t save your money. If you start saving money towards an emergency fund, you will prepare for unexpected emergencies, such as your car needing repairs.

Start saving for retirement. As mentioned before, this gets done through a 401(k) and/or via low-cost index funds. Setting yourself up for retirement will bring you closer to financial freedom, and you will live a less stressful life when you’re retired.

Work out a savings strategy to determine how much you need for emergencies and how much you need to retire comfortably. By planning, you will have a clear guideline on how much money to put away each month to reach your savings goal.

Enjoy Life and Reach Financial Freedom

You experience failure if you stop living your life. Enjoy the people close to you and continue to share new things. Everything will be okay if you fail occasionally.

If you have a bad month financially, evaluate what went wrong and find ways to improve your situation. Relook at the steps provided and reread your goals. Introspection will help you see the bigger picture and get you motivated to continue your financial freedom journey.

Financial Freedom 20XX will help you achieve financial freedom by sharing information, tips, and tricks via YouTube videos, blogs, and Instagram. Subscribe to our content, and you’ll feel like you have a mentor backing you from the side-lines, cheering you on!

Conclusion

Financial freedom is possible. Set personal finance goals, stay motivated, and don’t give up. You can achieve financial freedom by keeping to your budget and letting your money work for you. It will take time, but time is what you need to accomplish this.

Remember that we are here to help you every step of the way. We’ll provide you with all the information you’ll need to get started on your journey, and you’ll get to transform your life!

Financial Freedom 101 – Active Income vs. Passive Income

Passive Income

Active Income

Why You Shouldn’t Rely Only On Active Income

Conclusion

Financial Freedom 101 – It’s Not About How Much…

Other posts in this serie

Financial Freedom 101 – What is Financial Freedom?

The Core Concepts of Financial Freedom

1. Track Your Spending

2. Make Your Money Work For You

3. Pay Off Your Bad Debt

4. Plan For Your Future

5. Make Your Personal Finances Smart Habits

Conclusion of Financial Freedom 101

Other posts in this serie

How to Invest Your $1,400 Stimulus Check or Any…

Where to Invest?

Simple Ways to Save Money – Step Towards Financial…

Best Ways to Save Money and Achieve Financial Freedom

1. Prepare for life’s uncertainties

2. Track your spending

3. Take full control of the finances

4. Extra sources of income

5. Learn about the various investment options

Conclusion

How to Achieve Financial Freedom in 20XX

What is Financial Freedom?

How Can You be Financially Free?

1. Track Your Spending

2. Pay Off Your Debt

3. Reduce Your Expenses

4. Increase Your Income

5. Invest!

6. Start Saving

Enjoy Life and Reach Financial Freedom

Conclusion