Financial freedom

What is financial freedom actually?

Financial freedom means that we can use our savings, investments, cash, etc.. To be able to finance our lives without being dependent on our monthly salary from work, which restricts us.

Financial freedom means not being dependent on your salary to live your life the way you want.

So it’s about building up multiple sources of income, whether it’s investments, companies that are eventually run by someone else, projects that can be automated.

Steps to achieve financial freedom

You can read and hear a lot about financial freedom, especially here on the Internet, but it should actually be something simple. So here is an example;

• Working to earn money
• Save some of the money
• Then invest this saved money
• Let the investment generate money

In this example, we receive our first passive income. But what is it actually? Here is a brief explanation of active income and passive income;

Active and passive income

• Active income: this is the money we earn when we work. We exchange our time and energy for a payment. The salaries or hourly wages we get for X hours is active income, because we have to work for this money, and as soon as we stop working, we don’t earn any money.

• Passive income: this is the money we earn without working, or rather, what we previously worked for but no longer need to work to continue earning. This can be a project such as an automated blog or website, investments that generate money for us, an app that we have developed, or a project where our team works for us and we have only built and trained them. This is where the famous phrase “Make money while you sleep…” comes from.

What is a good passive income?

In general, all passive incomes are good, but there are some that are better than others. For example, it’s not the same if we have a team of 10 from the list above and we have a bakery and sell cupcakes, or have programmed an app that is available on Apple and Google Store. Both can generate good passive income for you, but the second option is scalable (Scalability is the ability of a system, network or process to change size. It usually refers to the ability of the system to grow), so you can only grow lineally with the first project if you hire staff, but with the second project you can achieve exponential growth (because you can simply configure a marketing campaign and sell the app millions of times without any additional work).