The Upside of Financial Freedom

Achieving financial freedom is one of my top goals. By definition financial freedom means that all of your expenses can be paid for through passive income. That income can come from real-estate, stocks, equity, or a business that runs itself. In addition to all expenses paid for, all debt has been eliminated, including mortgage, credit card, and student loans.

It's a big hill for most to climb. However, it can be done. There are countless examples of personal finance bloggers who have achieved this:

• Mr. Money Mustache

• JLCollins - The Simple Path to Wealth

• Financial Samurai

The secret is maintaining a savings rate of 50-70% during your working years while controlling expenses. The higher the savings rate, the quicker it will be to achieve financial freedom. Savings should go towards maxing out all retirement accounts, paying off debt as quickly as possible, and using the surplus to invest in index funds. That also includes paying down your mortgage.

The majority of people who are able to achieve this use their working years to save like crazy. Some hold off on having kids or traveling to save. While others, live way below their means to save even more.

But just because you have a goal to retire early, it doesn't mean you have to stop working. Many of the people who achieve financial freedom leave the corporate world to pursue their passions. Perhaps they become a full time surfing instructor or youth sports coach, or maybe they take a job that is less stressful. Whatever the case, use the early years of your career to stash as much cash as possible.

In your twenties and thirties try to live debt free and below your means. I'm not saying live like a monk, just live like you are still in college with a few upgraded amenities. If you maintain a savings rate of at least 50% while maxing out all retirement accounts, you will hit financial freedom before you know it. My goal is to hit a certain number by the time I'm 40. That's only 7 years away! When I make this number, I plan on leaving corporate America and doing a job I 'am destined to do. This doesn't mean that I am holding off on having kids or buying a house. It just means when that happens, I'll live below my means.

Financial Freedom is a goal we should all strive towards. Use your career as a starting block to get the ball rolling on it. Even if you aspire to stay in corporate America forever. There may be a day when you want to leave it all behind. Your future self will thank you the more you have stashed away.