Sunday, 19 May 2013

Financial Freedom - what does it mean?

In my previous post "Passive Income" I covered creating an asset which paid you whilst you sleep.
Now we understand that it is better to create a passive income rather than a wage , because passive income does not depend on your effort, let's consider the reason why you would want one in the first place.
The reason is for Financial Freedom - what does this mean to you? Could it be one of the following?
1. Having enough money to sack the boss and follow your passions?
2. Having all your bills paid monthly by something other than your job?
3. Being able to do anything you want up to a certain level - i.e. go on lots of holidays every year, buy the house you want, be able to treat your family and loved ones?
4. Earn enough so that there are no financial worries at all?
Whatever your definition - we would like you to consider what wealthy means to you. There is a mis-conception that earning lots of money makes you wealthy - but what if you are spending all of the money so your efforts are required again and again? What if it means giving up all your waking hours and takes you away from your family and costs you your health to earn all those pennies? Are you wealthy then?
We like to think that once you have your bills paid and some additional money on top by an income producing asset then you are on your way to being extremely wealthy. Why ? Because now you have your life back and you can design a life of choice rather than of obligation.
Picture this - you need £2000 per month to cover your bills - but your rental income from your investment properties pays you £4000 per month. You can now quit your job or start something part time but much more in-line with your passions. Now think what you would do with your time? See your family and friends? Take up hobbies you thought you would never have time to do? Volounteer for a worthwhile cause of your choice? Travel to all the destinations on cheap deals because you can go at the drop of a hat? Help your friends and families by giving them your time? Keep fit because you have the time to enjoy the parks and sports clubs in your neighbourhood?
Does the concept of wealth equating to have your time and therefore your life back make any sense to you?
Take Ian Summersa paramedic from Cheltenham who, through getting his money working for him , using our services created a dream lifestyle - he has now moved to Spain with his wife Rachel and quit his day job and will continue to invest because the more passive income he earns the more choices he has. Its not about how much money you earn - its about the type of income you earn and how you plan to use it that makes you wealthy and financially free.
In my next blog I will be covering the concept of "Infinite returns" and how property can generate an infinite return.
Robin Campbell, Director Midas Estates

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