Updated: Oct 5, 2021
Have you ever asked yourself, "how much do I need to never worry about money?" Have you thought about being financially independent, and what it means for you? Have you thought about how your daily choices impact your ability to reach financial freedom?
We all have the ability to achieve financial freedom.
In this post I will share with you a first and very simple step to reaching your financial freedom.
Before I share practical tips on building financial independence, and finally, financial freedom, let's talk about numbers.
Numbers are universal and constantly confronting us in our daily lives.
We all have an intuitive understanding of numbers. For example, when we are planning a dinner, we intuitively estimate how much food is required and how much time it takes. Do you know why?
It is because we all experienced it. Why not apply the same logic to estimating your financial independence number?
First step to estimating your 'ultimate figure'
While we can easily process numbers of a small magnitude and familiar scale, it is not the same for estimating the amount of money we need for our entire life.
Like in the dinner example, you need to start with estimating your minimum monthly requirements and then elevate this to your annual spent. Through this simple step, you make yourself familiar with a small number, i.e your monthly spend, and only then can you elevate your number to the annual spent.
But how much money you need for your whole life?
What is your entire life? The good news – you do not need to estimate your entire life. Think of the number of assets that will generate the income required to cover these monthly expenses. Simple, right?
Why do most people struggle to achieve financial freedom?
Mentally, we all have an innate idea of a horizontal number line with numbers growing from left to right. In the absence of precise linear information, our brain can not see the connection – thus, we need a bridge between your current situation and required assets. Your daily rate is the brick of the bridge that will help you to achieve financial independence.
If you find these thoughts useful and would like to know more about financial freedom, sign up for one of our individual sessions with PhD in Economics to work through your particular situation, challenge your calculations, and share proven solutions that will bridge your current situation with your target number.
Check out our Events page to learn more.