Achieving Financial Freedom + Greater Free Time- Simple Strategies

I was speaking to a friend today who finds the accumulation of money a touch mystifying. He wondered why I had the ability to travel as frequently as I do, and asked me if I had any tips. 
Believing the information applies to everyone, from every country, I thought it would be beneficial to use the magic of the internet to distribute. (to that end, if you feel someone would benefit, you're free to re-share).

First off, like most of us, upon graduating college I had nothing in the bank. True, I did not have student loans, but I started from essentially zero. Here are my strategies for building a nest egg. 
My Goal was Freedom of time. Material objects mean very little to me beyond the basics. As of this writing I drive a 12 year old Prius, live in a cheap apartment (relatively speaking as it is in a nice area of LA) and really the only thing I splurge on is the occasional last second airline ticket. 
When my friends ask me to consult, to "Richify" their life, I divide our plan into three categories- expenses, earnings, and investments. 

1. Expenses- 

The Most common Trait I have seen when examining Sub-Optimal Financial Positions- Credit card debt .
Step 1 (and if You Get Nothing else from Me) -  Get RID of your Credit card debt. 

The magic the Warren Buffett has employed to become one of the world's richest people is the compounding of money at about 9% a year. if you have credit card debt, you are doing the same, in reverse, at what are often DOUBLE (or greater) the interest rates! 
Banks pay-out massive dividends to their shareholders when you are paying triple (tacking on their ultra-high interest rates) what you originally bought that jet-ski for. 
I do not care what you else do, make sure to rid yourself of credit card debt. Do whatever to pay it off, immediately , or at minimum ASAP. Do this FIRST (I'm intentionally being redundant), before you buy anything, or put any amount into savings. 

Lower Your Rates
At minimum, one thing most people can do is to lower the interest rates they are paying. Many credit cards (banks) will offer you 0% offers for 18 months today. While Most have  a 3% Transfer Fee, your Optimal Choice is the Chase Slate card Bank which Will Let You Transfer Without a balance over the 3% Fee.
Transfer the maximum You Can to these cards, and then, this is a Must, Make the minimum monthly Payments every month! The moment you are late with a payment the banks start that interest wheel churning at a 3% higher elevation. Some of them might retroactively charge you interest from the moment you transferred your balance.

So You absolutely must be your Diligent About Making Payments, or else transferring balances Will be counter Productive. Set-up auto payments. 

Where Do You Spend Your Money
Next you'll want to eliminate as many needless expenses as possible. Look over your bills, what can you rid yourself of? 
For example, cable. Unless you get so much utility out of it you can justify the $100 + a month, get rid of it, and substitute in a Netflix, HBO, Hulu, or Amazon Prime subscription. You'll have thousands of hours of quality content. Cutting the cord can save you well in excess of a thousand dollars a year. 
Can you lower your monthly cell phone bill by switching to T-Mobile? What about Sprint who has tantalizing offers right now, offering you a 50% reduction verse what you currently pay!
Are you paying $ 4 for coffee? 
What about expensive drinks at a bar? 
What can you do without so that you can eliminate debt? Really look over those bills. A classic expense that is Easily overlooked is a cable modem. You Rent it at $ 8 a month, which Adds up to over $ 100 a year after taxes. That's an Expense that Can be Made up in Less than a year, and Save You that Money each year.   (Click on link to Learn more). 

Look, I understand you have to live and enjoy life. But when you are in debt, you deprive yourself of future enjoyment as the debt compounds.

Apply these savings to your credit cards immediately (paying off the highest rates first)

Expense psychology- 
I was so gung-ho about achieving financial freedom I went without many of the niceties of living in the West. I wasssss baddddd, I'd drive around a slightly dented car rather than fix it, buy pop-corn at a movie? ... not a chance. Pay for a $15 vodka tonic out with friends, "Sorry guys, you know I do not drink."
Remember, we never know when our last day will be. You have to walk the line between allowing yourself to enjoy life and socking away money in the bank. It's a fine line, and up for you to decide what is right for you. 

Saving vs. Earning
To quote Ben Franklin, who knows a thing or two about money seeing as though he has the largest US denomination named after him (show me the Benjamins): "A penny saved, is still worthless ... but worth more than a penny earned.".
Yes, he said that on his deathbed. 

What he meant was the following: When You refrain from tossing your Benjamins out your high-rise window and "making it rain" (like the aforementioned for Cable modem Expense ) and now you're looking at a bank statement with an extra few thousand on the ledger ... yes Your statement! This amount is actually Worth more than going and working for the Same amount of Money. WHY? Simply because if you were to have to earn that money over again, you are (unless you're Donald Trump) going to pay taxes on that revenue. So saving $100 on an expense might be the equivalent of earning say $ 150.
That's why I start off with the elimination of expenses. Saving money, while not as fun, is worth more to your bank account than earning it again.


The Definition of Investing is: consuming Less today so You Can consume more in the Future.

The trick is to Let your Money Work for You. Once You have a Critical mass of Money, Let's Say You have Saved 1 million dollars (no Easy feat) Assuming a Fairly Conservative Return on your Money of 5%, that means You'll have $ 50,000 a year coming to you in passive investment income, and if they are in the forms of dividends (as of this writing) taxed at lower rates than earning the same amount from an employer.
That said, the average return from the S + P 500 is beyond 5%.
Mailbox money.

I discuss in various columns in this blog various individual stocks. Basically, if you choose the individual stock route, invest in companies which you buy from, be it Apple, Nike, Google.
You as a sane and rational person (hopefully) buy from them consistently for a reason. It stands to reason that others do as well, etc. Of course, it is more complicated than that, so my recommendation is to idiot proof it and purchase the S + P 500 Index Fund from Vanguard. That means you will receive the S + P 500 Index's (the 500 largest companies meaning you'll own a slice of all three of the aforementioned companies) return every year, with the least expenses taken out to allow your money to compound at a greater. rate.
Look, it's not enough to SAVE money. To achieve financial independence is not an overnight process. The reason to save money is to let your money work for you. To bring in revenue so that you do not have to spend your doing so.
That's how you get freedom of time, financial independence. 

I really want to encourage you to get the Tony Robbins book entitled "Money."It does a fabulous job of explaining financial concepts in a simple manner, and further explains the mutual fund game versus the S + P Index fund buy. 

Get it here, I've linked it on Amazon for you.

Money Master the Game: 7 Simple Steps to Financial Freedom.

You're unlikely to achieve financial independence being lazy ... you'll have to work and bring in some ca$$$h, but we want to work Smart and efficiently as possible.
What can you do to bring in some added revenue? Do you have any assets lying around, like an extra kidney, or perhaps some malcontent children you could sell into slavery? ... No, okay, well, let's be creative if you're going to be so close minded.
Do you do have extra Room Rent You could out on Occasion? Place your room/ house on AirBnb  (this link You Will Get a Bonus on your First Hosting Experience) is an Excellent Way to Make extra income. Really, if you are leaving for a weekend, see if you can get some money for your space rather than letting it lie fallow, rent out an extra room or a couch! Most people you'll host are pretty cool, and I can tell you that as a super host (brag) myself.
Can you get another job? I used to consider being a security guard at a desk where I would be getting paid while I spent 90% of my time working on something I might be writing, reading a book, etc.
What about waiting tables at a fancy restaurant?
Or Learning a new trade like coding to make more money in the future. Pay for a class, or even learn online for free. There are a tremendous amount of resources available online.

Free Money
Another thing: take advantage of credit card offers. For example the Chase Sapphire Card offers you a ridiculous $ 500 cash-back or $ 625 in travel credit if you open a new account and spend 4k in the first three months using it. Plus the points you earn spending that money, that can equate to something like $ 700 (tax free) back.
And once you are done with that, move on to the next card offering you bonuses. You can generate potentially thousands of dollars of savings per year using this method. It's a no brainer if your credit is good enough.

Look, financial independence takes creativity and hard work. No doubt about it. And my goal here is merely to provide you with a few key distinctions that I hope will make it more likely that when employed will help you achieve the financial freedom most of us desire.

recommended links / buys

Get it here, I've linked it on Amazon for you.

Money Master the Game: 7 Simple Steps to Financial Freedom.


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