5 Steps to Financial Freedom
I’m going to share with you 5 Steps to Financial Freedom, as I followed them. I started out in debt and not knowing much about money and nothing about investing.
You can start from a Negative Net Worth and Negative Cash Flow and turn your life around.
Follow the process below and you will see that even you can create financial freedom.
1) Getting Past Denial, Guilt and Shame and Choosing to Be a Winner
This first step is the hardest step, since denial can be very very strong. When I was not doing well with money I just wanted to avoid my mail. I felt guilty and ashamed that I got into my financial mess. I was annoyed with myself.
However, I finally decided to change my situation after I watched the movie The Secret. I realized that I could change my life, and that I am the one who creates my experiences. I stopped playing the role of a victim, and started playing the role of a winner.
2) Practice Feeling Successful and Financially Free – What You Think About, You Bring About
After watching The Secret, I started practicing visualizing what I wanted and feeling like I already had it. For example I would visualize having a Bentley and a driver who would take me in my car. I visualized living in a beautiful home, swimming in my pool, enjoying the company of famous people as my personal friends. I visualized having more than enough money to buy food, and go on trips.
I found and said daily affirmations about financial freedom, and kept a daily success journal. I would write down what I did that was successful everyday. I was practicing being successful.
3) Learning How To Count Money
The next step was to actually count how much money I had and writing it down in an organized way. I used to work for a bank and my boss gave me a sheet to fill out my Net Worth and my Cash Flow. I also joined a housing savings program where they also taught me to write out my cash flow, clean out my credit reports and organize a plan to save and also pay off debt.
4) Learning How to Invest Money for Passive Income – Financial Freedom is Passive Income Equal to or Greater Than Your Expenses
My first passive income investment was dividends from dividend stocks. I learned about them from reading Money Magazine. They recommended looking at REITs that were yeilding 14% at the time. I invested in one stock to start and waiting until it actually paid it’s quarterly dividend. When it did I was in shock. Wow, passive income did exist!
To this day I keep reading and learning about the markets, stocks, bonds, treasury bills, real estate, and other types of businesses. I educate myself on opportunities available to generate passive income. Then I start small, and learn as I go.
5) Learning to Keep Track of the Right Financial Numbers – What You Focus On Expands
I learned that it’s important to track what we want to grow. So it is important to track your (1) Net Worth and your (2) Passive Income and the size of Your (3) Financial Freedom Account and your (4) Cash Flow. It is not good to track your debt, and it’s depressing too!
So I keep a table of those 4 numbers and update it monthly. This way I can tell if I’m getting wealthier or not.