Financial freedom is defined as living in such a way that money is not the top consideration in daily decisions. Think about it, when you make daily choices, how many of them are driven by money? Did you choose your lunch today based on price? Did you buy your last car because it was economically sound? While it is good to be thrifty, it is also good to enjoy what life has to offer. With hard work, you can enjoy financial freedom by controlling expenses, creating passive cash flow, and eliminating debt.
First and foremost you must get expenses under control. This does not mean that you have to eat rice and beans every day, but rather that you take a good look at your income and your expenses. Click here to learn a great method of keeping your expenses in check. If your income is lower than your expenses, you have two choices. You either drop your expenses or increase your income. I am a proponent of increasing your income. But you can usually find expenses that can be trimmed, as well. Once you have your expenses under control, you can move on to creating passive cash flow.
Creating Passive Cash Flow
Passive cash flow is income that comes in whether or not you work. It may increase with additional effort, but it will flow reliably and sustainably even if you do not actively work on your business. There are many ways to create passive cash flow. Passive income is important to financial freedom, because it allows you to spare your most important and scarce asset–your time. Once you have your time freed up you can spend more and more of it on the things that are most important to you. Also, once you have substantial cash flow, you can eliminate the final barrier from financial freedom–debt.
Debt is a financial millstone that hangs around your neck and pulls you down constantly. Consumer debt drains cash flow and prevents you from achieving financial hurdlets. Once you eliminate debt from your life you can truly begin to make financial progress.