Freedom Inspired

What’s your financial freedom numbers? How much would you need in the bank to be able to stop working for somebody else right now or be able to be financially free?

Most people answer that question with a very big number. $1 million, $2 million, $10 million… Everyone would like to have financial freedom, but 90% of people confuse financial freedom with passive income or making a lot of money. The 2 sometimes work together, but they both mean something completely different. Here is a little refresher to start with.

Financial freedom is a term used to describe a situation where one has enough income, or funds, to pay for his/her basic living expenses, for his entire life, without having to be employed by or dependent on anybody.

Passive income on the other hand, is income earned without having to work for it. It usually requires a massive upfront investment in time or money to be able to create a system or framework that will later make you money “while you sleep”. There’s no magic recipe that gives money without work. Most people who managed to create their own passive income got there by working their butt off first, and then taking time off.

Let us work on financial freedom. Again, this is about making the amount of money you (and maybe your family) need to live up to a certain quality of life, and making that money on your own. It doesn’t mean you’re making millions, living in a mansion, owning a yacht, and 10 cars.

Look at your monthly numbers right now. It comes down to very simple math: how much money is coming in versus how much is going out. If you have a 9–5 type of job and you’re making a normal salary, chances are you don’t need more works, you just need more freedom. If you can find a flexible way to sustain the lifestyle you have right now, by making your own money instead of relying on the 9-5 job to send you a pay check every month, then you’ve successfully created financial freedom for yourself.

Let’s see how to do just that.

How do you make your own money?

The problem for a lot of people is to find a way to change their mindset about their current work situation. They can’t picture how to turn their professional activity into an autonomous framework. They have a hard time seeing what they could do through the entrepreneurship lens. And to be frank, it is often really challenging to make the switch.

It goes beyond leaving behind a guaranteed monthly pay check with a bunch of employee benefits. This is about being on your own, with your own rules, your own schedule, your own self-discipline to get stuff done. That can be extremely scary. Who knows what we’re like when left to our own devices?
How do you transpose a 9–5 job activity to a one-person company? If you want to stay in the same field, the theory is usually pretty easy:

• If you work in graphic design, you can become a freelance designer
• If you work as an accountant, you can switch to consulting
• If you work as a coder, you can become a freelance coder
• If you work as a manager, maybe you can start your own team/company
• Or being a financial planner…

The list goes on. If you’re actually unhappy with your job and want to completely change your field of work, then the possibilities are endless. The thing is, there is a fine line between actually facing problems and procrastinating.

Many people want financial freedom, but very few are willing to work for it. The theory is more or less easy, but the practice is one of the hardest things you’ll ever have to do in your career. It requires a huge amount of self-discipline, motivation, and commitment.

Working on your own doesn’t mean it will always be rainbows and sunshine. There’s always a flip side, with the stuff you don’t want to do, and nobody else to do them instead of yourself this time: paperwork, accounting, small tasks you used to give to interns…

At the end of the day, the cognition for financial freedom needs to supersede all obstacles. That’s the only way to start working on your own and getting a shot at making your own money with more flexible time for yourself. Once your vision becomes stronger than your procrastination, your lack of skills, your fear, or any other obstacle that makes everybody else stop, then you can start that project.

Long term vs short term
Here’s the thing about money: we would all need at least $1 million to stop having to work for a boss. But we don’t need it right now, as a one-time payment. $1 million over a career of 40 years is $25,000 per year, which won’t buy you anywhere near a millionaire lifestyle.
In life in general, thinking long term is the best thing to do. Obstacles are temporary. Most things won’t matter anymore in a few years. Holding long-term grudges destroys relationships. But in the case of financial freedom, thinking of your required pay check on a smaller timeframe is usually the best thing to do.

Don’t think in terms of how much you need right now to stop working and go sip mojito on the beach. Think in terms of how much you would need next month, and the month after that, and after that. Most importantly, think of how you can create a system where you’re able to generate that money yourself every month.

Creating a one-person company is one the best ways to start building that system, and it’s usually a straightforward process. All you will need to do is register your business, open a bank account for it, and
deposit a minimum-required capital in there (from $1 to a few thousands depending on where you live). Once that’s done, you have one very simple task left: putting more money in that account.

How do you do that? Create content online, meet up with people, let your family and friends know, make phone calls, promote your services… Try to get your first contract, your first few customers. In most cases, you won’t have to pay taxes on your capital as long as you don’t grow it, and you will also be allowed a portion of your profits to be tax-free. When you do have to start paying taxes, you’ll pay a corporate tax, which is much lower than the individual tax you’ve been paying on your pay check. You’re not running a big risk, so have fun.

It’s also worth noting that it’s usually completely legal to run your own small company while still having a 9–5 job (don’t take my word for it and read your contract). This means it can be easier to work through a smooth transition, from employed to self-employed, from a self-employed to a business once you started a team with system or framework. Feel things out first, and when you feel like you’re ready, you can quit your 9–5.
In conclusion:

• Think short-term money, not long-term fortune, but
• Think long-term rewards, not short-term win.
  Understand that the amount of work required to create a sustainable, consistent monthly pay check for yourself is huge. It will take a while, and it will build up overtime. But the financial reward needs to start sooner than later, because that’s how you climb your way up to a healthy pay check. As Will Smith once said, “don’t build a wall, lay a brick”.

Remember, to not confuse financial freedom with passive income. You do not need a million dollars in the bank to be happy. You need freedom. You need to find a way to make a decent salary from your own work, so you can choose what to do with your time, said what you said you were going to do when you were a kid, and maybe even inspire your friends to do the same.

Once action taken, breakthrough will happen.
Enjoy the journey, and don’t forget to have fun.