Now we have seen 8 years of zero interest rates and QE that didn´t really solve anything but instead just created more and bigger economic problems. We have seen fake...
I´m back in Sweden for the summer, Visiting friends and family, playing golf and reminding myself of the feeling that goes with having a JOB. I´m helping out at my friend´s company and from time to time, I´m doing some really heavy exhausting work. The thing is that I actually feel happy doing it for several reasons (Or at least after I´m done).
The hard work (that I don´t really want to do) inspires me to work more and harder on my passive incomes to create more of them. I recently figured out something really cool, maybe most of you already knew about this but It doesn´t matter what the job is, the job can be the best job in the world, if you don´t get appreciation for the work, it sucks. On the other hand, if you do some work that is shit but instead you get appreciated for it, the job will feel a lot better than the other way around. Working a couple of days per week, getting some appreciation and stimulating the inspiration for doing more for the future passive incomes is really great!
The job situation
Some people hate their job, boss, working schedule, co-workers or whatever. If there is hate or strong dislike involved, then it might be time to fix it, and if it´s not fixable then it might not be a bad idea to start searching for a new job, or at least some other way of supporting yourself and your family. When I was in the job system before, I had the feeling every time I was going there for the last 2 years that I didn´t want to go. I kept telling myself that it was just temporary, just a couple more years then it all would be over. The thing is, when you first think about it, a couple of years is not a long time, but then when you think some more, and you stay in it, 2 years is a loooong time!
Maybe it would have been better to get a new job first, and let it take a little more time but instead enjoy the journey a bit more?
Everyone start their journey towards financial independence for different reasons, some of them being that they hate their job situation. If that is the case, looking over the situation before starting might be a bad idea because then your driving power will come from fear, the fear of staying in a place that you hate for the rest of your life. You would feel a lot better to get a new job, at least for a while. There is no certainty that you wouldn´t start to hate the new job as well after a couple of years. Being financially independent is the best medicine for all this because once you´re there, you can choose whatever you like to do at every moment. If you want to work you work and if you don´t want to work you don´t, it´s your choice how you want to spend your time.
By the way, do you know what JOB stands for?
Just Over Broke. Most people that have a JOB never have to think hard at where they could possibly spend their salary, it just seems to manage that on its own.
Have you ever wondered about why it´s called month salary?
Is it because it comes once a month or because it´s only supposed to last one month?
For some reason most people seem to increase their spending habits in the same (or even higher) pace as the salary increases. That’s why the job sometimes is called the “rat race”, you just go round and round, month by month, year by year.
As I´ve written a lot about already, the most important thing for getting somewhere is to get started.
Most people do the mistake of setting to big goals, and when they see that almost nothing happens, they give up. Sometimes they even say it doesn´t work. I have read on forums about people that have read Rich dad poor dad by Robert Kiyosaki, saying that they tried to do what he writes about and that it´s a scam, it doesn´t work. What a load of bullshit!
Of course it works, millions and millions of people all over the world have used the principles he writes about in his books to become financially independent. What some people do is that they overestimate what they can do in one year then underestimate what they can do in ten years. This is not a sprint, this is a Ultra marathon, key is sticking to it until you get there.
When we start we have to figure out the Dream, the BIG goal, down the line, the “finish line”. Then we have to make a plan of getting there, what vehicle to start with, and get started. We need to educate ourselves and be persistent. When we have the end goal clear, we need to put up small goals along the way. Just like the Marathon runner has to pass every single one of those 1 km marks we need to do the same, there is no magic teleport to the finish line. If time freedom is the goal (to decide what you want to do at any given time) then we can´t just go to 100% of time freedom in one big step. 1% at the time is how to get there. No one takes one big step and then get to their dream in that one step, even if it appears so when you see famous successful people. You really have to work your ass off!
Your vehicle is not permanent
Your vehicle is what will drive you to your different goals. When you start your journey, you have to choose a vehicle that you believe will take you to your first goal.
Let´s give an example scenario:
Say that you have your long term Dream (big goal) clear and you´ve worked your way backwards. You want time freedom in 5 year meaning that you have to have your salary covered with passive income by then. You figured out that you want to do this by owning houses that you rent out and you can see that houses in an area not so far from your home are selling for about 100.000€ and give a net return at 8%. You do the math and see that you need 4 houses to cover your salary. Right now you only have 3000€ in the savings account which is not enough for a down payment on the first house. You need at least 10.000€ for the house that you want to buy, so you need to come up with a way to get those extra 7000€.
Now we have to figure out a way to make those 7000€ to get your first house, maybe you can take some extra shifts at work? Cut your spending for a while? Get an extra job? Start working with a networking company? Use your 3000€ to buy something that you know you can sell at a higher price?
There are many ways to go, maybe you can do a mix of some different ones. Whatever you do here, is your first vehicle, the transportation that you use to reach your first goal. This first activity will often be active, meaning that you will have to work hard to get to the goal.
After 3 months of working overtime and doing some extra work you got an extra 3000€ so in total 6000€. At this state you see an ad where someone needs to make a quick sale of the kind of house that you want to buy at just 90.000€, 10.000€ discounted, which means that you only need 9000€ to put down. You go there and talk to the seller, There might be a chance that he will loan you the last 3000€ needed for the down payment if you are willing to take over the house right away. If that’s possible you just continue like you did for the first 3 months to pay off the loan. In the meantime you find a good family to rent your house, don´t stress about this, do the right background check and get a feeling if this is the kind of people that you want renting your house. Not doing this step carefully can be very expensive!
The house is your new vehicle and now you earn some passive income from that house, maybe 500€ per month (after interests and money for renovations are set aside). You might even make a deal with the family living there that you will make some renovations the coming 6 months, with a small increase of the rent of course. So you take the 500€ that you make from renting out the house, maybe do some more extra work and after 6 months you now have a much nicer house that you make 550€ per month from instead of 500€.
Now that your new vehicle, the house, is in better shape. You can get it valued and chances are that the value now is a bit more than the 90.000€ you paid for it. If that is the case, you can go to the bank and ask to raise the loan on the house a bit, after all, your house might be worth 105.000€ now and your house loan is only 81.000€ (90.000-9000=81.000). Raising the loan to 90.000 will take you almost all the way to buying house number two. In less than 2 years with this scenario you would be half the way to time freedom, your first big dream.
After time freedom is reached, it may or may not be time to change vehicle. Everything depends on our ambitions and dreams. There is nothing that says you have to stick with one vehicle or that you can only use one at the time. Personally I use several vehicles to take me to my goals, some have crashed and burned along the way and some have been driving really great.
Never forget the rule of monopoly that 4 green houses can be exchange for one red hotel!
Is this really a realistic example?
Yes and no, this is a fully realistic example in terms of how things might play out but it might not be very realistic in terms of persistency and dedication from the person trying to pursue their dream. Most people give up very easy, this all might sound very easy to do in theory but of course there will be obstacles along the way. It takes a lot of psychological strength to work on something where you can´t really see any results in a “long time”. During this time it is also necessary to learn as much as possible about what we are getting ourselves into, no matter what way we choose. Reading books, blogs, watching video education and other forms of education material is very important. Without it we are fumbling around in the dark.
I know several people who has taken on the challenge of reaching time freedom (and more) using different vehicles. Some have built up traditional businesses, some have built up sales networks using network marketing, some have built online stores, some are using affiliate marketing, some have built real estate empires and some have built great wealth using the stock market. All of them can chose to spend time as they like it, working, playing golf, traveling, spending time with their families or whatever they feel like.
Find out what you want. If you don’t know what you want there´s no way to get it. When you know what you want, set up smaller realistic goals along the road. When the plan is placed out, with reachable goals it´s time to find a vehicle. The vehicle can be anything that has the ability to provide passive income for you, everything that can be automated or run by others.
Taking time every day/week to learn more about what you´re going to do, passive income, investments, different vehicles is also very important. Not only for the knowledge but for motivation, to stimulate your brain to think differently and figure out new ways and vehicles that will take you to your dreams.