What is Financial Freedom

Financial freedom refers to the state where you are not working for money, but the money is completely sufficient. As long as the passive income generated by your assets equals or exceeds your daily expenses. If we enter this state, we can call it retirement or various other names. As long as no major disaster occurs, you can live on. Of course, if you like your job, you can continue to do it, or you can choose what you really like to do instead of doing what you don’t force for life. Happy but helpless things to do.

In terms of financial freedom, assets are things that you can put money in your pockets without working (assets generate passive income), and liabilities are things that take money away from your pockets. Therefore, your private car is no longer an asset in the ordinary sense. A set of properties used for rental profit is an asset, because it is completely owned by you, and the monthly income generated offsets the surplus after the property tax paid by you. And the house you live in is no longer an asset, because you have to pay for the mortgage and the resulting loan interest. Even if the mortgage and loan interest are paid off, you still have to bear the maintenance of the house, property taxes and other items expenditure.

The following are the standard principles for achieving financial freedom:

1) Create assets

2) Reduce debt

3) Manage daily expenses

Financial freedom has nothing to do with whether you are young or how much money you have. If you can make enough money for your daily expenses from ways other than your job, you will have financial freedom. Age may have nothing to do with financial freedom. Suppose you are 25 years old and spend 1,000$ a month, and your assets generate a passive income of 1,001$ a month. You are financially free. You can choose what you want to do without having to Worried about what to eat or where to live next meal. Suppose you are 50 years old and earn one million per month, but your monthly expenses exceed one million, then you still have not achieved financial freedom, and you still have to continue to earn one million per month.

Some people believe that financial freedom only applies to a small number of people. If the vast majority of people try to achieve financial freedom, then the system will inevitably collapse. This theory believes that the passive income that financial freedom depends on comes from the active income of other people. This is basically similar to the reason for the baby boomer retirement problem, in which the social security system is predicted to collapse when the post-war baby boomers, who account for the majority of the population, begin to receive pensions one after another.

Passive income to achieve financial freedom

Passive income

The following does not fully enumerate various sources of passive income that may achieve financial freedom:

1) Rental property

2) Unconditional basic income

3) Dividends or fund dividends

4) Bank fixed deposit and monthly income plan

5) Royalties brought by book writing, photography and video works, music and painting creation, etc., as well as income such as patent fees

6) Advertising revenue from blogs or websites

7) pension

8) Monthly living expenses, child support or child trust fund compensated by the former spouse

9) Rental professional qualifications or academic qualifications [4]

10) Rental property

This is the most common way for people to achieve financial freedom, but it is also the most expensive way. The advantage is that once you have a property available for rent, it can generate passive income for you, and it is usually a high-quality asset that generates long-term cash flow. It is usually preferable to own the full ownership of the property, because you do not have the pressure of a mortgage during the empty lease of the property, and you can still maintain a level of financial freedom. Another factor that needs to be considered is whether one has the ability to deal with the various proxy settlement issues triggered by the rental of the business, such as tenants’ renting, house repairs, rent recovery, malicious damage claims, etc., whether the effort spent is sufficient Passive income needs to be considered before actual implementation.