Want to wake up without having to worry about money. Want to order food without having to look at the right side of the menu? Want to be able to go anywhere, at anytime because you don't have to work a regular 9 to 5 job?
This is called financial freedom… and I’m going to tell you step by step how to achieve it. Even if you make minimum wage, are currently broke, and especially if you werent born rich, this post is for you.
My name is Adrian Brambila and it has been 14 months since I hit financial freedom. This means that the money I have accumulated and invested pays for everything I own and more, including the lifestyle I have. This allows me to travel anywhere I want to, have a nice home, nice cars, and to treat my family to nice things.
Here are the 7 steps I took to reach financial freedom…
A lot of people believe if they just made a little bit more money, their financial problems would be cured. That being said, 61% of Americans live paycheck to paycheck yet salary has nothing to do with it! Having a high income does not change anything. Your spending habits are much more important than the income you make.
2. Cost of Living
The second step to achieving financial freedom is minimizing your cost of living. As Americans, we like to live large! Many times, we live in places and drive cars that are much nicer than we can afford. We do this do make a perception of high status. This is because material object are an outlet of success and wealth in the western world.
I used to be a minimalist. I lived in a van and travled across the country for nearly a year! Now, I have a home and a car but I still have a minimalist mindset. I do not associate my identity with material objects. I do not feel the need to “flex” on social media or “keep up with the Jones’”.
3. Good Debt vs. Bad Debt
Unfortunately, we have to talk about one of the least sexy things of finance — debt! Some say it’s all bad, some say it’s all good. Today we will be reviewing consumer debt. Consumer debt is any debt you have as a result of buying things. Again, this could relate to your living situation, gas, personal items, etc. Credit card debt is a form of consumer debt that haunts the dreams of many! Racking up credit card debt will ruin your chance at financial freedom!
Credit cards can be both good and evil, it all depends on how you use them. For me, I love my credit card! I earn free points and miles and have never had to pay for a flight thanks to my credit card! Other people fear their credit card because they rack up so much debt and can only pay the minimum balance with the highest interest rate. This is one way to ensure you will never retire.
Before you invest, you must pay off all your credit card debt.
4. Can’t Save Your Way
The fourth step to achieving financial freedom is understanding that you cannot save your way there. Although saving can help, look at where you can place your money. Most saving accounts only provide interest rates of 0.1% to 0.5%. This number is tiny! If you saved 1 million dollars, you would still only make $1,000 back in interest. This wont cut it.
5. You Can’t Earn Your Way
If you can’t save your way to financial freedom, you cannot earn your way either. Imagine you double down on your 40 hour work week and start working 80 hours in order to have your income doubled. Even if you think you could muscle through it, you would have a horrible quality of life and it still wouldnt be enough money to live and retire off of.
Saving and earning separately will never get you to financial freedom. This leads us to point numbre 6, investing! You must take the extra income you make and invest it! That being said, you must be careful with what you invest it in.
Speculative investments are investments with the highest risk. These are investments like crypto or putting money into a startup business. Never put more than 10% of your networth into speculative investments.
Good investments are investments that pay you. Things like real-estate, index funds, and ETF’s are good investments. Stocks can be good investments as well, if they work out!
Investments in single stocks and daytrading are bad! You will never be smart enough to beat the market. Even the best daytraders end up losing big! Play it safe and stay away from day-trading.
7. Max Out Roth-IRA
When you take all your knowledge from the previous steps and are ready to invest your money, the next step is to invest in and max out a Roth-IRA. The money that you put into a Roth-IRA has already been taxed. When you take the money out in the future, you wont have to pay taxes on it!
I will note, it you are following all the steps above and maxing out your Roth-IRA, you will eventually reach a limit. You can’t just put as much money in as you want. I know, it sucks! If you reach this point, that is awesome! The leftover money you would usually invest can now go towards something different.
Which step are you at? I would love to follow your journey and support you along the way. Financial freedom is a blessing that I hope everybody gets to acheive as fast as they can! In order to enjoy this privilege, it takes sacrifice and smart decision making. The time is now to begin your journey!
See you in the next one. Peace and God bless.
I make new content every single week, so be sure to subscribe to my Youtube and follow my Instagram @brambilabong and TikTok at @AdrianBrambila. I also have tons of resources and courses on my website that you won’t want to miss. Head over to www.adrianbrambila.com to learn more about what I do and how I live a financially free life.