Now that you know how to become the best manager of your own money in the previous blog Unlock the Secrets of Becoming the Best Manager of your Own Money, it’s time to take steps to become financially free, and the best way is to know the formula.
I love math. Ever since I was a kid, mathematics has been my forte. Any subject with math in it (Algebra, Physics, Calculus, Analytical Chemistry), any subject with formulas and finding the X or Y, has been my personal favorite. My reason is that I don’t need to memorize so many things.
I just need to know the formula, then I know I can be able to find that “X.”
Studying and claiming financial freedom and how to get it has been a struggle for me at first. I have wondered how, what, when, and where to go. Until I came across the formula for financial freedom, from then, I knew, finding that ‘X’ – it’s just a matter of time.
Do you want to know the secret formula to financial freedom?
Here is it is:
FF = PI > E
Where:
Financial Freedom = Passive Income > Expense
In any given formula, you need to know the variables to be able to discover the unknown.
The first variable that you need to know here is: E
E – stands for your expenses, your monthly expenses. That’s why the first blogs on this series are essential before you can solve this problem. Go back to that: Unlock the Secrets of Becoming the Best Manager of your Own Money
Are you listing down your monthly income and expenses? Or still, haven’t?
If you are not listing it down, you are already missing the first step towards attaining your financial freedom.
But, if you are doing that right now, then, good for you, you know the first variable.
The 2nd variable that you need to know here is:
PI – Passive income
Passive income – is income you get even if you are sleeping right now. Do you have a passive income right now? If not, it’s time to build now.
You got to be able to build your passive income. This is why I made you create a financial freedom account in your money jars. So, if there is an opportunity to invest in a vehicle that can give you passive income, you will not lose that opportunity.
Let’s go back to the formula and analyze it.
Financial Freedom (X) = Passive Income > Expenses
Your passive income should be greater than your expenses to know the unknown (X) or get to your financial freedom.
For example, you have identified that your monthly expenses are at 100,000 per month; now, you got your first variable.
Financial Freedom (X) = Passive Income > 100,000
So, in our example, since you already have your monthly expenses of 100K per month, you only need to build passive income that will generate 100K or more monthly income. Once you attain that, then you can be called financially free.
Simple, right?
You know, when I discovered that formula, it blew my mind. It’s a Eureka moment for me.
Because if I can be able to attain that, two years from now, or five years from now, I don’t need to retire by age 65 as most people do. I can retire now and do my God given passion/task without thinking of earning from it because my basic living expenses are already all covered.
Right? Are you all getting me?
But let us do a reality check.
May I ask you, what if you are already 65, and if you don’t have a passive income to support your lifestyle, you technically can’t retire.
You may have retirement money, but if you don’t have passive income coming each month, that retirement money will soon run out. So then, what do you do? Do you work again?
As sad as it may seem, according to statistics, 98% of Filipinos who retires outlive their retirement money, meaning they have a longer life than their retirement money.
And if that happens, what will happen to you?
Will you be asking your children for support?
Will you need to work again just to sustain your needs?
In a study done last 2018, on average, Filipinos’ average retirement savings will only last them up to 3.6 months.
Will you be one of the 98%? Or do you want to join me and become the 2%?
Let’s do this.
Please share this article with as many people as possible. This is something that can change your life and their lives.
Bye for now.
For Our Financial Freedom,
Read more:
– My Finance MD is BACK!
– How To Save 50% At the Grocery by Doing This One Simple Step
– Unlock the Secrets of Becoming the Best Manager of your Own Money
– Discover the Easiest Money Management Tool that’s Proven to Work
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