Simple Steps to Financial Freedom #Finance

look I see you you work hard you did everything that by Society standards you thought you were supposed to do yet you wonder if there’s more to life than just working to pay the bills a life where work is optional you are free to pursue your passions and you’re able to take

amazing care of the ones that you love although schools won’t teach you anything about this it turns out achieving Financial Freedom is actually simple like anything big in life if you just take it one step at a time you can get there these are the simple steps that I took to reach Financial

Freedom in my 30s each step Builds on the other and if you miss one step or do things out of order Financial Freedom could take you a lot longer than it needs to so without further Ado let’s start with step zero that’s right we have to start at ground level which is to create what I

call your cash C achieving any Financial goal first starts with having money to put towards them that’s why you need to create a source of Income whether it’s your career your job your paycheck or a side hustle or a business that you start bottom line is you need need

something that brings in enough Cash Flow to cover not only your subsistence needs but even extra you need to have a surplus to put towards your financial goals and get ahead now a lot of times I hear people say things like I suck at earning money I’m not good at making money

I I’m in a career that doesn’t pay a lot this is where you really need to kind of challenge yourself earning money earning lots of it it’s a skill like any other skill this skill can be learned so just breaking it down for you if you want to earn more money you need to provide

provide more value and then ask to get paid for the value that you’re bringing those are the two equations I really want you to focus on this because like I said this is Step Zero you can’t really accomplish anything else until you have some Surplus from a cash C so if you’re

working at a job find out how you can increase your skills volunteer to take on more projects to get more experience expand your network and then negotiate hard for your pay every single year if not every quarter you need to sit down with your manager and show them the value that you’ve

brought to the company and then keep asking for more pay to to compensate you and if you’re not bringing value to the company and you don’t feel like you deserve asking for a raise then get yourself to a position where you can ask for a raise where you feel absolutely entitled to a

raise if you just bring the value you become someone of value then the money is going to come that’s how it works so that’s if you’re working at a company if you want to go to entrepreneurship route you got to also create your cash cow pick the right business model pick a business

model such as online businesses that are scalable e-commerce digital products that have really high Profit margins don’t get into a business such as a brick-and-mortar business where it’s really hard to maintain large Profit margins and it’s hard

to scale you got to create something that’s going to be your cash cow bottom line is whatever your cash cow is you need one so that’s Step Zero now let’s talk about step one once you’ve got some Surplus money to actually do something with the first place to Route some of

that extra cash is towards building a starter emergency fund we can’t talk about financial fre Freedom until we first have Financial stability Financial Security and that starts by having something of a cash cushion that gets you out of the living paycheck to paycheck cycle you want to start

having money in your bank account that doesn’t move it’s the concept of Aging your money if as soon as money comes in and has to go right back out the door towards expenses then your money isn’t Aging in your bank account for very long whereas if you have money sitting in there

but you have so much extra now you’re starting to create more financial cushion and this doesn’t just happen by accident you really need to make it a goal so I want you to set a goal to first save up just $2,000 have $2,000 sitting in your account that you never need to touch better yet

I recommend opening a high Yield Savings account that is separate from your everyday checking account because these accounts pay high interest and if it’s not attached to your everyday spending account you’re less likely to be tempted to dip into it and

the reason why I say start with $2,000 is because that is going to be more than enough to cover the average emergency expense which data shows is around $1,400 so whether it’s an emergency vet visit for your cat an emergency car repair or any other unexpected expense this $2,000 cash cushion

will be enough to cover you so you can pay for it in cash no stress and not have to get into Credit card Debt for it and like I said since every step Builds on the other the benefit of starting with this step is that it starts building your muscle of saving it

really is a muscle and since $2,000 is not a large amount to save you can get there relatively quickly get a quick win and you’re going to feel so accomplished and good about yourself that you’re going to be super motivated to tackle the rest of the steps to Financial Freedom and that

brings me to The Next Step which is to master Credit cards according to a bank rate survey over 50% of Americans are carrying Credit card Debt and the total Credit card Debt carried by Americans collectively is

over $1 trillion that’s the GDP of a small country so obviously Credit card Debt is a huge huge obstacle to Financial Freedom so before you move any further you want to create a really good relationship with Credit cards like straight up I

love my Credit cards I love using them I don’t think it’s necessary to completely cut Credit cards from your life and never use them I think if used wisely they are actually a great tool for Financial Freedom where you can get a lot of free flights and

free things but you got to learn how to beat Credit card companies at their own game don’t let them get the better of you so when you spend on a Credit card it might seem really convenient and then just make the minimum payments but the amount of interest

that you pay is going to be multiples more than the dollar amount you originally put on your Credit card Credit card companies don’t want you to know this they want you to just enjoy the convenience and keep making them tons and tons of money but check this

out let’s say you bought something for $1,000 on your Credit card and if you just make the minimum payments with a 25% APR not only is it going to take you more than 10 years to pay off that balance but you’re going to also have paid over $1,400 in interest over that

period and that’s on a $11,000 original purchase and the numbers get even worse the more you spend on a $10,000 Credit card balance not only will it take you 28 years to pay that off if you only do the minimum payments but you will have paid over $144,000 in interest in that

entire period so you can quickly see why if you don’t Master Credit cards Financial Freedom is never going to happen for you you just can’t get ahead paying 25% so here’s my advice if you need some help digging out of this Credit card cycle first

I I want you to stop using Credit cards temporarily until you get a handle on it it’s best to just freeze that Credit card in a block of ice or even cut it up and order a new one later but the first step is to stop digging a deeper hole then I want you to

strategize and think about how you can hustle up extra money and really focus on paying that balance down it’s incredible how much you can accomplish if you just focus on one thing if you make it a top priority to pay off that Credit card and you ask your brain every night

before you go to bed what are ways I could come up with extra money to pay off this Credit card I guarantee you you will see your balance go down quickly and then I want you to just do a Sprint just for like 30 days you could do anything if it’s temporary cut out all

discretionary expenses and put all of your money towards paying off that Credit card by the end of this Sprint your Credit card balance will have gone down quickly and you’re going to be so motivated to do another one it’s really all about focusing and

keeping up your motivation all right moving right along to step three which is to build up a full emergency fund this is when you officially have what I like to call you money just imagine this let’s say you’re working at a job and the environment is really toxic but you can’t

leave because you need money next month for rent but then what if you had 3 to 6 months worth of living expenses in a high Yield Savings account that not only paid you interest every month so it was growing money on its money but it was just set aside because and

you don’t need to touch it but if you ever needed the money it would be there for you which would give you the freedom to say goodbye to this toxic job quit give you a month or two of Runway to find a new job to take a mental health break or whatever you need because you’ve got money in

the bank that in and of itself is a measure of Financial Freedom so this is where I want you to build on step one where you saved up your starter emergency fund of $2,000 now I want you to build it up to $10,200 some large amount that will cover you for a minimum of three months of living expenses

just having this money is going to give you so much peace of mind whether you get sick whether you get laid off you know you’re going to be okay and even though it might seem like a large amount of money to you maybe you’ve never had a five figureure Savings account

balance but like I said with Focus you can accomplish anything and Financial Freedom like I said it’s steps that build on the other you don’t become a millionaire and you don’t you can’t take shortcuts it first starts with building the muscle of saving this amount and then

that amount and and a bigger amount and a bigger and bigger amount I’m so exced excited for you because once you accomplish this and you’ve got that money in the bank you will never be the same you will not feel the same way about your money it’s going to be so good for you okay

next step now you want to start putting your money to work and doing it in a tax Savvy way which is why step four is to open and start funding retirement accounts since Financial Freedom can mean having enough money from your Investments to cover your living expenses at some point

just having a large emergency fund and Savings account isn’t going to be enough we need to invest that money and luckily the government has given us many ways to invest money in a very tax advantaged way in other words any money that you put into these

Investments not only can they grow tax-free but any contributions you make to these accounts are a direct deduction to your taxable Income since Taxes will be your single biggest bill in your lifetime it makes sense to make use of these accounts so

the most popular ones in America are the 401K this is a workplace sponsored retirement plan and you can make contributions to it that are tax deductible the growth will be tax deductible and although you will have to pay Taxes on withdrawals later on in the future but because you

are able to make pre-tax contributions you’ll save a lot of money in Taxes along along the way and be able to contribute more because you’re doing it with pre-tax Income so start with your 401k if you have one at your job likely your employer is

offering what’s called an employer match which is where for every dollar you put in they will contribute X number of dollars so this is essentially free money I was able to grow my 401k to over $25,000 half of that being investment growth the other half being primarily from employer match so

it’s a really great hack for quickly jumpstarting your Investments for Financial Freedom another account you can look at is what’s called a Roth IRA this is where any contributions you put into it are after tax so it doesn’t reduce your taxable

Income but all the investment growth happens tax-free and later on in retirement you can make withdrawals tax free too this is great because if your Investments Grew From I don’t know from $1,000 to a million you can withdraw a million taxfree which is pretty

incredible the Roth IRA is probably the best thing since sliced bread so definitely look into that now if you’re self-employed you might not have a 401k but I also want you to look into either a solo 401k or a SEP IRA these are accounts that allow you to put a ton of money away pre-tax reduce

your business Income and take a lot of tax deductions so definitely look into that and if you’re self-employed you’re also eligible to open a Roth IRA there are so many ins and outs to these retirement accounts but if you’re not opening them and contributing to

them regularly you’re leaving a lot of money on the table and paying way too much in Taxes so to help you out I created a comprehensive guide called the Financial Freedom starter kit and in it I will explain all of the accounts that you can open for Financial Freedom what

order you need to open them in and where exactly to open them so check it out it’s completely free you can download it at Ros hon.com starterkit I’ll also put the link in the description something else I want to clarify is these are investment accounts but they’re not

Investments so once you open the account you need to put money in and then invest the money in that account that’s another step and I have a bunch of CashNews.cos on my channel that teach you how to do that I’ll put a link to my Investing For Beginners playlist below so

check that out but your first step right now is to figure out what retirement accounts you are qualified to open open them find out what the annual max contribution limit is and start funding them right away okay and step five for Financial Freedom is to pay off all other Debt

except for maybe your mortgage at this point you’ve already knocked out Credit card Debt way back in step two so now you’re only left with lower interest kind of singled digigit rate Debt such as car Loans student

Loans and maybe a mortgage even though the interest rate on these types of Debt are pretty low you can never really call yourself financially free if a portion of your Income every month is going towards these fixed monthly payments so your next

step is to make it a priority to become Debt-free there is no other better feeling than being Debt-free and knowing that everything you make every month is for you and not for anybody else and the amazing thing about this is once you knock out those

Debts you will have so much extra Cash Flow freed up to then move you even closer to Financial Freedom faster when I finished paying off my student Loans and it was incredible how much extra money was freed up to put even more towards investing and

that’s when things really started to take off so that’s something else I wanted to point out even though the steps to Financial Freedom are sequential it doesn’t take the same amount of time to accomplish each step it’s actually the first few steps that might take the

longest but because momentum builds and you’ll be gaining more skills more confidence with your money and generating more Cash Flow and freeing up more and more Cash Flow as you knock out each step each step actually getss easier and easier and faster to

accomplish okay one more thing I want to say about this one part of paying down other Debts is to not take on new Debt in the first place and the one major mistake that people make is getting a car Loan on a new car there’s nothing worse than

Debt on an asset that depreciates in value every single day and sadly the average American is paying a monthly car payment of around $7 $800 a month think what could be possible for for you if you had that money going towards your Financial Freedom goals instead so I know this is

unpopular advice but I really believe in saving up money to buy a gently used car that you pay for in cash you can get a decent car for under $20,000 even $10,000 and save that money up in cash just because it’s normal just because everyone else takes out car Loans to buy a

shiny brand new car doesn’t mean that you have to and remember the average person doesn’t have Financial freedom and so if you want Financial Freedom you can’t do what the average person is doing okay moving right along to step six which is to max out all of your other retirement

accounts and invest all of your Surplus all of the retirement accounts that I mentioned in step four they have quite large annual contribution limits as of 2024 you can put up to $23,000 a year into your 401k pre-tax and you can put up to and $7,000 a year into your Roth IRA so that’s already

$31,000 that you can and should be trying to put away every single year towards retirement and then there’s other amazing retirement accounts you can look into such as the health Savings account I also mentioned the solo 401k and SEP IRA and then if you’ve maxed out all

of those accounts you can then start investing more in a taxable Brokerage account you can also open additional high Yield Savings accounts where you can save up for short-term financial goals like your dream vacation or a down payment on a house

again check out my Financial Freedom starter kit for guidance on where exactly to open all these types of accounts so those are the six simple steps to Financial Freedom seven steps if you count Step Zero it took me 8 years to get through all these steps for others it could take longer maybe 10

years or several decades whatever amount of time it takes you to get through each step just remember that you are on your own Journey you’re running your own race and as long as you take one step at a time in the right order you will get there the other thing I wanted to point out is that

Financial Freedom is not really a fixed destination or a fixed amount that that once you reach it you will all of a sudden feel completely different and have total peace of mind and a beautiful relationship with money Financial Freedom is more of a journey even if you’re on step one or two

and just at the beginning you can actually choose the feeling of Financial Freedom I don’t believe in the whole philosophy of deprivation and putting all of your money towards investing and saving for the future for this one day hopeful destination of Financial Freedom you also want to be

able to balance enjoying some of your money now living the way you want to live now spending the time with your loved ones now doing the things that you want to experience now with also preparing for a life of more Financial Freedom in the future there are people who might save up a certain amount

of money to be financially free faster because they deprived themselves and had a 90% Savings rate and never went out and spent and enjoyed any money but once they reached that dollar amount they will not have exercised that muscle of being able to enjoy the journey and enjoying

their money along the way and just hold holding their breath for this one-day destination that when they get there they might actually regret all those years that they spent just living in deprivation so this is your reminder that Financial Freedom is a journey not a destination so don’t

forget to enjoy the Little Pleasures along the way to not always feel guilty about the little things that give you Joy in life that you spend money on and to just always maintain that balance let’s just say Financial Freedom is more of a state of mind than a fixed dollar amount thank you so

much for watching that’s it for this CashNews.co don’t forget to download my Financial Freedom starter kit and I’ll see you in the next CashNews.co bye