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  • Not having money is miserable, and I have been  there. Sharing a 100 square foot room with a  

  • roommate and counting every penny to make sure  that I can make it until the end of the month  

  • has taught me a lot. I am still very careful  with money because I know what it means to cut  

  • down on your meals to make the rent at the end of  the month. Back when I was a freshman, I wasn't  

  • thinking to make a lot of money, but I wanted  to get out of that desperate financial position  

  • because I had to make a lot of compromises.  I couldn't focus on my college because I had  

  • to work for hours every day to be able to pay  the rent. So my only hope was, once I graduate,  

  • I will have the required skills to find a job that  will provide me with the comfort of free time.  

  • I will use that time to develop a business or  skills that will further increase my income

  • It seemed like a reasonable plan; howeverit wasn't long enough that I realized  

  • it wasn't as good as I thought because  I wasn't ready to wait a few years  

  • to graduate and then figure out what to doSo I decided to try everything I could. I tried  

  • to start an online business, got into real  estate, joined a little startup. And after  

  • years of commitment and hard work, I made it. When you don't have to worry about money,  

  • trust me! Life changes. You no longer base  your every decision on how much does it cost

  • You will suddenly have the freedom to do things  that are interesting to you, that matter to you.  

  • You will have the freedom to take a break from  everything and don't worry about the rent.  

  • You don't have to be a billionaire to  do that. It takes far less than that

  • So in this video,  

  • I want to share with you some basic steps to  achieve financial freedom if you are just starting  

  • out or still on the way to do that.  
 

  • Number 1 - Stay Cashflow Positive  
 

  • How good are you at managing your  cashflow? is eventually, what determines  

  • how financially successful are you going to  be? If you have taken accounting classes, you  

  • probably know what cash flow is. But in collegethey teach that - Businesses have cashflow;  

  • however, in life, we deal with the same problemWe have to manage the inflow and outflow of cash.  

  • To keep your business healthy, you  have to make sure that there is  

  • more money coming in than going out, or at least  the amount of money that leaves the business  

  • is equal to the amount that it receivesIt doesn't matter how much debt or expenses  

  • the business has. As long as it generates  more cash than it loses, it's a good business

  • Personal finance works exactly the same wayIt doesn't matter how much debt you have,  

  • mortgage, student loans, car leaseas long as you are cashflow positive

  • 
 2.  

  • Don't take unnecessary responsibilities 
 

  • This mistake is literally one of the main reasons  why a lot of people are struggling financially.  

  • They might be cashflow positive, but then they  take a financial responsibility that they can't  

  • afford. I am not just talking about getting  a brand new car lease or credit card debt,  

  • but they get into an expensive relationship  maybe or start a family. Don't get me wrong!  

  • I am not saying that starting a family is a bad  idea. But here is the equation, let's say your  

  • cashflow is balanced. You start a family, raisekid, your expenses increase, you get a second job  

  • or get a promotion, and your income rises as well. Not bad, right

  • But as you keep getting older, your expenses rise  as well, and at some point exceed your income,  

  • so you become cashflow negative, and for the  rest of your life, you will be working hard  

  • to catch up with your negative cash flow, and  that's known as - generational poverty. You get  

  • to the point where you don't have the means to  build capital that will get you out of poverty.  

  • Most people today can't get financially  independent not because they don't work hard,  

  • but rather they put themselves in a situation  where they have no other option but to spend  

  • every penny they earn. 

 

  • So, To keep your cashflow always  positive, you need to do, step number 3.

  • 3. Build an investment portfolio  
 

  • Around 4K years ago in a kingdom in ancient  Mesopotamia. There was a guy named Arkad who  

  • was poor, like really poor. To escape povertyhe worked hard to put food on the table; however,  

  • when he received the payment for his servicehe put very little food on the table and lent  

  • the rest of the money to a shield maker, who  then paid interest on the loan. Instead of  

  • spending that interest to improve his standard  of living, he lent it to another shield maker,  

  • thus growing his wealth even more. After repeating  this process for many years, his wealth grew  

  • so big that he did not have to work again, and  ended up the richest man in that city, Babylon.  

  • You might not find a shield marker today to  

  • lend him your money, but there are clearly other  instruments that you can use to grow wealth.  

  • Consider this. The S&p500 is an index that  measures the performance of the top 500  

  • US companies. Historically it had an average rate  of return of around 10 percent. This means that  

  • if you put aside and invest just 1K dollars  every month into the SP500 when you are 20,  

  • by the time you get 50, you will have almostmillion dollars ( $1,991,377). And That's just  

  • with a thousand dollars. Imagine if you increase  that number every year to 2K or 3K or even 5K  

  • as your income grows, you will end up  with tenths of millions of dollars

  • That's how you keep your  cash flow always positive

  • How to invest in the SP500 and how exactly does it  

  • works, we have already covered that in a previous  video which link I will leave in the description

  • But before we move on, here is a  

  • little disclaimer - we are not financial advisersand anything we say on this channel should not be  

  • taken as financial advice. You should do your  own research before making any investment.

  • 4. Be liquid 

  • Don't go out and throw all of your money into the  stock market because investing isn't all sunshine  

  • and rainbows. If you would put in a thousand  dollars into the S&P500 in June 200 7  

  • and decide to withdraw it a year later because  you had an emergency. How much do you think  

  • you would have made on that thousand dollars? I  am sorry to say this, but Negative 50 percent.  

  • You would need to wait another five years  (2013) just to earn your money back.  

  • And that's how the market works. It jumps up and  down every day. Sometimes a crisis hits, and it  

  • might need a few years to recover. That's why if  you are serious about the stock market, you should  

  • be in it for the long run to rip the profits. But to truly feel that you are financially  

  • independent, you need to be liquid. If something  goes wrong, you are not worried. You got fired,  

  • business is going south, a recession is around the  corner, no problem, you have got yourself covered,  

  • you have enough cash to not worry about  the bills for at least six months.

  • 5. Have a plan

  • All of the things we have  talked about in this video  

  • sound amazing, but how on earth do  you get the money to do all of that.  

  • The only feasible option seems to win the  lottery. You can, of course try that, good luck

  • However you have another  option, plan your spendings

  • You are not going to build a 6-month cash cushion  in a single month. You are not going to build a  

  • million-dollar investment portfolio in a few  months. And guess what?! you don't have to

  • Financial independence isn't the final  destination. The goal isn't just to make  

  • enough money and retire for good. Instead, to  put yourself in a position where you are not  

  • going to base your every decision on how  much it cost. You are not going to accept  

  • that new job just because it pays slightly higher. You are probably going to continue working but  

  • instead working on things that matter to you the  most. With fewer financial problems, hopefully,  

  • your life is going to be a little more colorful. 
 

  • 
 I hope you guys have  

  • enjoyed this video. If you did, give it thumbs upAnd if you are new around here, then subscribe and  

  • turn on your notifications. We are trying our  best to make great videos for you and hopefully  

  • help you achieve your financial goals. Thanks for watching and until next time

  •   


Not having money is miserable, and I have been  there. Sharing a 100 square foot room with a  

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5 Simple Steps to Financial Freedom

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    Summer posted on 2020/11/29
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