Tips On How To Achieve Financial Freedom In 5 Years
Want to know how to achieve financial freedom in 5 years? Is it really possible and what do you have to do to achieve your financial goals?
Hi Trish Davies here and I want to talk about financial goals and how to achieve financial freedom in 5 years. Now I know that I a bold statement to make but the reality is there are strategies and resources available to make that statement come true.
I am all about wealth creation and it is something that I have been practicing for over 15 years. This journey of wealth creation started as a matter of necessity, there was no other option as a result of personal tragedy.
In 1999 I was left in the position of being a single mum to a beautiful little girl, my daughter Emily. At the moment it seemed that the world was crashing down all around me and my daughter.
It was then that I made it my mission to build a financial firewall around us both. A firewall that was impregnable, the drawbridge up that no one could break down. I needed to generate income to survive but to also plan for the future.
I reskilled, retrained and secured a corporate job that met the needs that my family had. With that said I knew that it wouldn’t give me that financial security I was looking for, so I researched alternative options. Options that would help transition myself from an employee to entrepreneur.
Tips On How To Achieve Financial Freedom In 5 Years
If you want to now how to achieve financial freedom in 5 years then you must also make that transition. There is a simple formula that you can follow to help you achieve your goal of financial freedom.
It has been perfectly summed up by American businessman Robert Kiyosaki with his four quadrants. Now if are not familiar with this formula let me explain the ESBI quadrant formula.
First though imagine you have a square white board and then draw a centralised horizontal line and a centralised vertical line. This gives you the four quadrants. The ESBI formula works like this.
Top Left Quadrant = E (H4)
This stands for Employee which the majority of the world falls under. Here you have a job, you are employed by someone who give you a role to fill.
That role involves undertaking tasks of work that you must complete in the allocated time. Usually it is a Monday – Friday role but can also include shift work which involves unsociable hours. It can also include working weekends.
At the end of the monthly you will receive a paycheque which is what your employer thinks you are worth for the 40 hours you work for them. In essence you are trading your time for money and there is very little leverage.
Meaning you are limited to the amount of money you can earn unless you take a second job. Yes you will earn more money but will have less time in the week to enjoy it and spend time with your family.
Therefore, this part of the quadrant is not going to give you financial freedom. You have too many constraints.
Bottom Left Quadrant = S
Now this is the first step to transitioning yourself to becoming an entrepreneur. The S stands for Self-Employed which means you still have a job in essence only this time you own that job.
The difference here from the employee quadrant is that you now have control. You set your hours, you do the work you want to do and where you want to do it. Also, you set your own rate for the work you do, this is what you are truly worth in your opinion.
At this stage you are starting to generate more money for yourself, 100% of the profits go into your bank account. In effect you are still trading your time for money, but you don’t necessarily need to work as many hours to generate the money you need.
One benefit of being self-employed is that if you need more money you find more work. With that said though you are still working under thee constraints of time. There are only so many hours in the day that you can generate money.
I would say that is possible to achieve some form of financial freedom through self-employment, but it is hard graft. When you move into the next quadrant things start to become a bit more interesting.
Top Right Quadrant = B
The B in this formula stands for business owner. Now some people may think that a self-employed person is a business owner which is true enough. That’s because you have you own business but generally you work alone, and you work in the business.
This quadrant reflects people who have a business that works for them and not the other way around. This can be summed up in one word which is systemisation. You have systems in place that lighten the workload for yourself.
This can either be a business that employs other people to do that heavy lifting. There is a saying than “many hands make light work” meaning more people working gets more work done. This generates more turnover of the products or services that you are selling.
More money is generated, more profit is produced through leverage. You are leveraging employees to make you more money which can lead to your financial freedom.
Systemisation can also be generated if your business sells digital products and services. This means that you have automated systems in place that work for you 24/7 meaning your business is always open.
It is possible for your to generate leads, convert them into customers, take payments and deliver the product automatically. There are no constraints, no limit to how much you can sell and how much money you can make.
You can make money while you are asleep, enjoying your favourite pastime or even when you are on holiday. Once you enter into this quadrant financial freedom is within your grasp in a very short period of time.
Bottom Right Quadrant = I
The I stands for Investor, and this is where you get your money to really work for you. This is a natural progression from the previous quadrant. I say that because when your business is systemised you make more profit.
Those profits can then be ploughed into investments that means your money works for you. My real estate business is a perfect example of this. I have many real estate assets and they generate passive income for me because they are tenanted.
My investment is always there within the bricks and mortar, but it is working for me and generating revenue. Invest the money I make to make me more money. This is my philosophy.
So, these are the four quadrants for you to navigate through that will help you achieve financial freedom. Below is a video I created which highlights some of the pints of the wealth quadrant. Also, there are a couple of ideas, golden nuggets, that I have used to create financial freedom.
How To Achieve Financial Freedom In 5 Years
You landed on this webpage because you wanted to know how to achieve financial freedom in 5 years. I have shared the Robert Kiyosaki four quadrant formula for you to follow. The principles of that formula are simple as it is just a matter of transitioning from one quadrant to another.
Within my video I shared a couple of ideas which will help you create the leverage that you need. My Build Your AU program is perfectly designed to help you move through the quadrants right from employee to investor.
The program will help you create systems that work for you instead of you working the system. This generates another type of freedom which is time. More time to live the life you want to live and on your own terms. To learn more about the program click here. Financial freedom can become your reality, how much do you want it?
A life of freedom and choice
Trish Davies
Trish Davies International
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