On this podcast episode I talk about how to create a life of financial freedom. To listen to the podcast episode, please scroll down to the bottom of this page.
The first step to figuring out what you need in order to achieve financial freedom, is to establish what your freedom number is. Your freedom number is simply the amount of money that you need per month, to live your current lifestyle without having to work or have a job. In other words, if you lost your job tomorrow, how much income would you need to replace so that you could live the same lifestyle that you live now without having a job.
If you have enough money coming in from your passive investments to cover your overhead and all of your bills, then you are basically financially free (meaning you never need to have a job or work again). Not having a job gives you true financial freedom because it allows you to travel and to do things that you have never done before.
We tend to stay in one place because we have a job (or because we have kids and a job). But if we don’t have a job (or need to have one) then we are free to live our lives however we choose.
Imagine going to Mexico for a month and living in a condo on the beach while all your bills and expenses are paid for from your investment income. A month later you decide to spend a month in Costa Rica, exploring the rain forest. After that you will spend the summer in the Caribbean Islands living on a yacht. And then you will spend the Winter in the South of Spain and Portugal (which are beautiful that time of year). You plan on flying in to the U.S every 3 months to see your family and friends. Is this lifestyle possible? Could this be a reality? The answer is a resounding yes. And it all starts with understanding your financial freedom number.
On this podcast episode I talk about how to establish your financial freedom number, and how to put a plan in place to achieve financial freedom in 15 years (or less). If you think 15 years is a long time, I can promise you that those 15 years will go by regardless. Better to have them go by with a plan in place versus having no plan at all. Working at your job in order to make money to pay your bills is not a plan.
So how do you go about establishing your financial freedom plan? The way that you achieve this is by learning how to buy rental properties below market value for cash (borrowed from private lenders). Then your next step is to repair these properties and make them rent ready. Finally, you rent the property out, and then you refinance the private lender loan into a 15 year conventional mortgage.
This strategy is commonly referred to as the BRRR Method which stands for Buy, Repair, Rent and Refinance and it’s how I got started in real estate and one of the easiest ways for a new investor to get started. I teach many of my coaching students how to buy their first, second and third rental property employing this method. My student Elmer has hundreds of rental properties and he started just 6 years ago.
By purchasing rental properties and obtaining a 15 year fixed rate mortgage, we know that in 15 years we will own the property free and clear (with no mortgage). And we know that the rental income that the property generates will be income that goes straight into our pocket (after taxes, repairs and insurance).
All we need to do is to calculate how many rental properties we need to own, in order for us to achieve our financial freedom number. If you could purchase just two rental properties per year for five years, then you would own ten rental properties free and clear just 15 years later. Is this hard to do? My student Andy is only 31 years old and he attended his first boot camp just 5 years ago. He now owns 10 rental properties which means that he has purchased 2 properties per year over the past 5 years.
If those rental properties each paid you $2,500 in rent per month (in 15 years) then you would have $25,000 per month in rental income every single month. And I am sure that you can agree with me that you would have no problem living the lifestyle I described above if you had $25,000 in passive income coming in every month.
The only thing stopping you from achieving financial freedom is not acting on this information and not buying rental properties. If you buy 10 houses, rent them out and hold them until the mortgage is paid off you will achieve financial freedom. And you can achieve this in just 15 years.
But the trick is you must start now. I recommend that you learn how to by properties at a discount by attending the Wholesaling Real Estate Boot Camp. It is very important for you to understand how wholesale real estate works, and why sellers that are motivated to sell, sell their houses at a discount.
In order to learn how to fix and flip houses and how to repair and renovate houses that you buy I also recommend that you attend the Fixing and Flipping Houses Boot Camp which will teach you about material and labor costs. You can’t repair a house if you don’t know how much it should cost or how much you should be paying.
Both of these boot camps will give you the foundation that you need to get started on your path towards financial freedom. If you want to shorten your learning curve substantially I recommend that you apply for my coaching program (use the orange button at the top right of this page).
Think about your financial freedom and what you are doing today to get started. Do you have a financial freedom plan in place? When you are financially free, you can live the life you imagined for yourself.
And this financial freedom is forever, since the properties will continue to go up in value over time, and the rent can be increased every year which will outpace inflation.
Even better, when you move on, your kids (or heirs) would inherit your financial freedom and that passive income will be theirs (for life).
You can listen to the podcast by clicking on the triangle in the black bar below:
