The #1 Reason why people never achieve financial freedom

They said that less than 4% of the population in the world will never experience true financial freedom. Does this statistic bother you?

Let’s first define what is financial freedom. Based on Wikipedia, financial independence is when you have enough wealth to live on without working.

But financial freedom means many different things to different people. Its definition depends on you and how you perceive it. Some people define achieving freedom when:

  1. They can buy all the things they want, or
  2. They can live anywhere they want, or
  3. They can spend their time any way they want, or
  4. They can focus on the activities they want.

Just thinking that we can buy, live, spend and focus on anything that our heart desires is truly liberating. Not worrying about money is a dream.

But with that 4% statistics, does it mean we are doomed? Are all the hard work, hustle, saving, investing, earning – not enough? Should we just stop trying?

Nope. Of course not.

The #1 reason why people never achieve financial freedom is because they have no idea how much they need to be on that status.

Lyn Joy Talag-Cruz

How much do you need to live that ‘freedom’ you aspire? Is it 1 million? 5 million? 10 million? If you earn 50k a month, would that be enough? Do you need at least 150k a month? Or maybe 200k?

The problem with most people who dream of financial freedom is they don’t know how much money they need to earn monthly/yearly to achieve the status.

Despite earning 1 million yearly, you may not feel that it’s enough because of your lifestyle expenses. And again, living a financially free life is not simply lowering your lifestyle.

The Wealthy Pinay mantra: Live the life you’ve imagined for yourself. That would include buying anything you want, living anywhere you want, spending time with your passion whatever it is – and not be defined by others expectations of how you should live your life.

If living a ‘free’ life means gardening in your 20 hectares of farm then so be it.
If living a ‘free’ life means taking off a year to trek all the Philippines’ mountains then do it.
If living a ‘free’ life means having a yacht, beach front property, collection of bags, and travelling the world then so be it.

I know women always feel guilty of wanting more and it’s really sad. That’s why I openly talk about money and wealth to remove the stigma around it. Having money is not a bad thing. Money doesn’t change your core values rather it amplifies who you are.

Be careful though. Having a boat is more of a liability rather than an asset. A boat/yacht requires regular maintenance, you need to rent a dock, you need a captain or crew, etc. And all these costs money.

The same way with having a house and all the expenses that go with it – electricity bills (considering all the heaters and airconditions), maintenance, taxes, etc.

You have to factor in all your expenses when calculating your financially free life.

How to calculate your ‘free’ life?

Remember that to achieve a financially free life, our earnings should be more than our expenses without us actively working.

Meaning that our assets (anything that generates income) such as businesses, book royalties, dividends from stocks and bonds, rental income, etc. – are earning enough to sustain our daily/monthly/yearly expenses.

  1. How does your financially free life looks like?

First and foremost, before calculating how much it costs to live your ‘free’ life, you must first envision what it looks like. It doesn’t matter if being ‘free’ means living in a tent on top of a mountain with your 10 cats then OR living in your 5-bedroom house with your 10 dogs.

Paint that vision in your head. Draw or write it even if you want. This is a great manifestating exercise that I want you to do. It’s fun, stimulating, and totally exciting.

2. What are your expenses?

Once you painted the life you want, next step is figure out how much you’re going to need.

We can categorize your expenses into three.
A. Basic necessities
B. Lifestyle choices
C. Luxurious life

A. How much do you need for basic necessities?

The goal is to earn enough assets (without actively working) to pay for all your expenses. Planning to earn 300k a month this year when you’re currently earning 10k is a quite a stretch and you might stress yourself for aiming too high too soon.

Instead, I encourage you to aim in creating assets that can pay for your basic necessities first. This will include any expenses that you require to live a decent life.
– electricity and water
– house mortgage / rent
– groceries
– school fees, books, uniforms
– insurance (life, medical, house)
car / gas
– charity

If your assets can cover these basic costs without you actively working, hooray! You are now financially free.

B. How much do you need to live a more comfortable lifestyle?

If you have generated enough passive income assets that can cover your basic necessities, you can then calculate how much does it cost to do the things you want to experience or have.
– travel
– eating out / shopping
– club membership / gym membership
– additional cars
– extra help (assistant, drivers, maids, nannies)

C. And lastly, some of us wants a luxurious life (however you want to define it)
– having a masseuse comes once a week for massage
– buying a beachfront property
– building a church for your community
– buying a private plane (Chavit ikaw ba yan?)
– breeding horses

3. Plan on how you can cover the basic necessities, lifestyle choices, and luxurious lifestyl expenses.

What income generating assets should you start or focus on? Should it be stocks, bonds, real-estates, businesses, gold? Start with one and as you build confidence and experience you can add more into your asset portfolio.

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My book, The Wealthy Pinay: A Guide For Exceptional Pinays To Create Their First Class Life talks about the greatest asset of all....

YOU.

Yes, you. YOU are the greatest asset. Your determination, your desire, your attitude to winnings and failures will play a huge role on how much you can achieve.

Invest in yourself by eating healthy, reading, learning, exercising. Some women message me that although they want to join my Money Mindset mentoring course, they didn’t because of lack of money. Even with the reduced price and the installment plan, they balk at the course price. They see the course as an expense rather than an investment in themselves.

Even if you don’t join any of my programmes, at least start reading. Buys books that add value to you. May it be related to personal development, business, finances – don’t regret the money you’ll spend in investing in yourself.

Note: although reading, attending training, and seeking higher education are all good, all these are useless if you don’t apply what you learn. I know people who keep on studying business but afraid to actually start a business. Don’t be like them.

If you want change, then you need to change.

P.S. If you’re still not a TWP newsletter subscriber then I encourage you to be one now! What’s the difference between the blog and the newsletter you may ask, well, a lot! You see, this blog can be read by anyone (my mom, my kids, the judgmental bitches, my boss) hence it’s unavoidable that I filter what I say. The newsletter though is like a safe haven for me. I know that people who subscribed are just like me. We are all different but same in many ways. So if you want to be part of our ‘insider’ group, enter your email address below and that’s it. You’ll start receiving our regular newsletter straight to your inbox.




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