To live a financially free life you will require the foundation set out in Financial Mastery. Along the path to creating a financially free life you will need to generate a steady flow of income; this income may come from employment income and/or self-employment income initially. We all start somewhere. You will need this steady flow of income to build your savings and investments and an asset base that generates and pays passive income on a steady and ongoing basis.
What is passive income? Passive income is money earned from a source without your active involvement. Passive income comes from a source that pays this income whether you sleep or travel or work out at the gym. Examples of passive income include and are not limited to: real estate investments, dividend stocks, rental property, high interest savings, bonds, peer lending, etc. Passive income sources vary in the size of capital investment required, effort to create them and risk to hold. Ideally your passive income sources would be diversified to mitigate risk before you cut ties with other sources of income. The type of passive income that suits you may not suit me, these choices are personal and there are a wide variety of options. I will share more information on my choices including ratings of best sources of passive income and risk ratings in future posts.
As you build and increase this passive income you will reach a point where passive income will cover your expenses and you can decide if you still require employment income or self-employment income. I believe that our work in life does not end; the decision before you here is whether your employment or self-employment gives you the freedom to live out your purpose in life. Are you investing your time in doing what you love?
If you don’t find a way to make money while you sleep, you will work until you die.
Warren Buffett
A financially free life means my needs are taken care of and I have financial resources that allow me to choose what I do with my time. Keep in mind that as individuals continue to learn and grow in life interests change and our understanding of our purpose may expand. Ending employment income may just be the start of an entirely new adventure that you did not see before making the leap to financial independence and your needs and expectations may change. All we can do now is make the best decisions possible with the information available to us today. Make choices that create options.
To summarize, we need stable income to build savings and acquire investments while we create passive income. The combination of these items set out in Financial Mastery lead to your ability to live a financially free life.
Additionally, all of our posts in the Passive Income Series can be found here.
Finally, more great content can be discovered on our Youtube channel.
