How can I become financially free?

Financial freedomAlthough people often confuse the two, financial freedom isn’t the same as being rich.  One individual could be completely financially free earning just $20,000 annually, while another could be trapped even with millions of dollars of annual income.

So then, what is financial freedom?
Financial freedom is a state of mind achieved within an individual by no longer needing to worry about money.  Money is no longer the dominating force behind the personal or professional decisions within an individuals’ life.

Why is financial freedom more important than wealth?
While many individuals can consume a limited amount of food, once they’ve reached their limits, individuals will discontinue eating and their thoughts will no longer be occupied with eating.

Unfortunately this is not the reality when it comes to spending money.  More than 95% of individuals are self-sabotaging and continue to increase their expenditures as their incomes rise.  Individuals are given the option to maintain or even reduce their spending, like I have, and accelerate their mission towards financial freedom, however, everything has been designed to discourage this type of activity (inflation, media, even money itself)!

Why are people having a hard time achieving financial freedom?
Most families are spending an average of 40% of their income towards servicing their debts.  Last week I was at TD Bank discussing investment mortgages with the branch manager and he shared with me a statistic… I’m not easily thrown… but this particular statistic was enough to throw me on my ass!  Did you know that Canadians have the highest debt in the world?  No… can’t be!  Not us?  The ones who weathered the mortgage crisis so well?  Sorry… it’s true!  The average family borrowing debt in Canada is $100,000, a 78% increase over the past two decades and the average debt-to-personal income ratio is now 153%!  This is a scary trend!

I want to be financially free but I don’t know where to start!
First of all, you need to want it.  Like every other major lifestyle change (e.g. exercising, eating healthy, etc.), it’s not going to be easy and you need to hold yourself accountable.   There are three main elements to financial freedom and you must attain all of them:

1. Residual income to sustain yourself without needing to work

This can be accomplished by generating passive income from investments, interest on savings or cashflow from a business (please note: you need the right type of business for this income to be passive, not sure where to start? I recommend reading Catch Fire: How to Ignite Your Own Economy, it’s less than $20!).

2. Generate more income than what you spend

Much of today’s spending is unnecessary, delivering instant gratification only to deliver buyer’s remorse with a few days/weeks/months time.  Bigger cars and bigger homes are some of the most significant culprits but many other unnecessary luxuries play a role as well.  Most individuals will try to generate more income and turn a blind eye to the option of reducing their expenditures.  This is a recipe for failure, if your expenses increase every time your income increases, you are no closer to financial freedom, you are standing still.

3. Aim for low income requirements

By aiming for a lower income requirement to enjoy a comfortable life, you make it easier to achieve financial freedom.  By reducing your expenses now, you can focus on paying off any long-term debt obligations.  Read any modern book on financial freedom and you’ll hear this rule again and again.  Not sure where to start?  Read The Wealthy Barber Returns, another $15 or less well invested!

What’s this got to do with real estate investing?

Real estate investing is one of the most powerful investment methods in the world.  As of 2011, more than 90% of the world’s millionaires have achieved and maintained their wealth by investing in real estate.  Real estate remains among the safest methods of generating automated incomes and has proven historically to be far less volatile than both the stock market and business ownership.  While real estate investment is most certainly not the only option, it is amongst the best available to any individual in their pursuit of financial freedom today.

How do I start?

First step is to determine if you would like to learn about real estate investing.  It’s a long road but well worth it.   If in the end you just can’t make the time, don’t fret, we team up with investors all the time to help them reach their goals of financial freedom.  After all, it is teamwork that brings together the most successful investment teams in the world, you can leverage our experience and we can accelerate each others’ path towards financial freedom together.

Call to action (you know you need it)!

If this interests you, or you just wish to discuss further, you know how to get in touch. It’s time for you to rise above the “average” and become accountable for achieving your own financial freedom.  In 10 years when I’m lying on the beach enjoying mine, will you be at my side or will you be another one of those famous soliloquies starting with the words “If only I…”?

Brent Mondoux
Founding Partner, Amplified Investments

Make money real estate investing

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