Create a Freedom Fund
"All wealth events are preceded by process, a backstory of trial, risk, hard work, and sacrifice. If you try to skip the process, you’ll never experience events." MJ De Marco - Million Dollar Fastlane
Time & Finance
Lacking these make pursuing an end goal futile and you'll give up before the race even starts....
On the other hand.
Possessing these will compound life's greatest experiences.
READ ON FOR MY SOLUTION
This was me before starting my freedom fund...
I had close to $10,000 saved up in my early twenties with no aim or goal.
what could that buy me?
- A new car? (my Honda Jazz held itself together ok)
- A Holiday or two overseas? (being from New Zealand at the time, flights overseas were expensive)
- A reasonable amount of time to find work if my job laid me off? (three months.... six If I pushed a low quality of life eating Heinz baked beans on toast and Magi's two minute noodles)
- The latest Iphone or gadget (feel a sense of novelty for a whole 10 minutes)
you get the point...
$10,000 or a similar number isn't going to shower you in options or remove any uncertainty about the future.
Most important of all, that number isn't going to persuade you to take risk and make big plays in life.
What is a Freedom Fund?
A freedom fund is an amount that.... you guessed it sets you free to chase your true goals and aspirations.
Its the amount that can buy the most precious resource we all have.
TIME
Time is the true currency we all have, how we spend and live it equals our true quality of life, period.
Remember a billionaire on his death bed would give up all those numbers for a few more days. That precious resource we know as time is something we are all guilty of abusing and taking for granted.
Now before I tell you the amount we are striving for and how to set the right habits to get there lets make one thing clear.
Do not get this Freedom Fund confused with a retirement plan.
A retirement plan is obsolete in this stage of life. (very controversial I know but things will make sense as you read on).
A Freedom Plan provides you with the time and mental space to allow yourself to pursue a goal of a higher purpose.
the most common
Travel the World
Take your family on memorable experiences
Pack up and move to that new country
Build a Business (My Favourite hands down)
Pursue your craft and learn that new skill (similar to above)
Why is my favourite build a business?
when I was younger (20-24 years old) my obsession was to travel the world. No real aim, no destination and no goal that would follow
That was my obsession.
I realised I love to travel, but I also love building, managing and having a creative purpose....
I found this love after starting my very first business at the age of 23.
I realised I can travel the world relentlessly..... but first I need a vehicle that will bring in steady cash flow.
But as I mentioned to also enjoy it more.... travelling with no purpose or backbone other than a huge chunk of savings no longer excited me
BUILD A BUSINESS WHERE YOU ARE CREATING CONSISTENT CASH FLOW THAT ALLOWS YOU TO BUY BACK TIME AND CREATE LASTING WEALTH.....
This Business is your retirement plan!
the Freedom Fund is the method of which to pave the way to accomplish this first stage of life. In the future the next stage might be scaling the business itself, in this article however we are solely focused on getting the engines roaring.
As for my first business, it was a Tennis Coaching company I built as the head coach out of one club. I built a large team of coaches and reaped the rewards. However there's one problem... my Time is still attached to money.
"Your lifeforce should not be an expendable resource for wealth because it is composed of time. Your mortality makes time mathematically retarded for wealth creation." (MJ DeMarco The Millionaire Fastlane)
I had freedom in the form of other coaches supporting my program. But I didn't have enough where I could just pack up and leave whenever I wanted.
My income was also dependent on these coaches and the club continuing to work with me, a fragile system indeed.
Coaches, clients and the club I worked out of were still reliant on me. Not to mention the club itself if they had enough of me could end the contract within weeks.
"If someone can “flip a switch” and destroy your business, you’re playing roulette with your financial plan." (MJ DeMarco The Millionaire Fastlane)
I knew this from the beginning....
I have been able to automate it with some tweaks, allowing me freedom. I have used this business as a vehicle to create my first Freedom Fund.
This will allow me to travel and pursue my goal of becoming financially free and time free.
HOW MUCH SHOULD A FREEDOM FUND CONTAIN
Time for the Million $ Question
You need enough money to provide you with at least 1-3 years of living unpaid!
scary I know, but tell me does that idea excite you even a little?
1-3 years of precious, quality time, to pursue chasing what you actually want out of life. I say quality as each day you are uninterrupted.
- your boss is no longer hitting you up
- The demands of your current job are no longer weighing you down
- No more travelling in and out of the office
You have the clear mental space to GO ALL IN on what you desire!
A clear runway to take off!
they say the hardest part of the plane taking off is at the beginning of the runway.
Lets get the engines roaring.
for me 1-3 years of decent quality living equated to an amount of.......
$100,000 USD Liquid Cash
This amount is enough for me when I look at my bank account to give me the confidence to aim high and shoot for my goals. It takes you out of fear and reliance on your current situation and propels you into a whole new direction.
Life becomes your playground.
Now as a heads up for me I had $100,000 liquid cash as well as $50,000 in stocks and shares. (I had no intention on selling those shares)
Disclaimer, the business I spoke about earlier?
I still run overseas but as I mentioned the income has taken a hit and this is only going to last a year before I lose it. This extended my time to pursue and carve out a new piece of monetary Land.
The Freedom Fund amount is subject to you
during this time
- how high will your quality of living be?
- What country are you living out of? (Bali or London)
- How long are you wanting to give yourself?
- Do you have a family to support?
calculate your main living expenses, Rent, food, travel, entertainment ect.
make your own judgment call on the amount and your risk tolerance. It might be less than mine, it might be more, but it needs to buy you one years worth of time minimum!
How Do we Grow A freedom Fund?
One word Sacrifice.....
- Drinking Alcohol (weekends are also out)
- Smoking (in any form)
- Dates (if your a guy these really add up if your a gentleman and pay the bills)
- A premium Phone plan (you use to constantly scroll Social apps)
- subscriptions you don't need (Streaming services, apps, ect)
Notice how many of these sacrifices are actually vices holding you back anyway?
Drinking and Smoking is a toxin that has no benefit for health.
Dates in the form of looking for casual hook ups and one night stands. Lets be honest if you are looking to pursue a large goal this is a hue distraction. Enjoy the single life for now, it will provide you with the time and space needed to serve your means. (Controversy warning)
With SACRIFICE alone you have opened the doors to hold onto the money you earn. Most importantly it shapes you into the person you need to become. You are gaining the discipline and skills needed to reach the higher goal.
Finally you will be ready to leave the cuckoo nest and actually achieve it... Think of it as the pre warm up for the hunger games or something, you need to invest and prepare for the war you are about to wage.
This is the beginning of a relentless pursuit towards achieving your ambitious goal.
HOW TO SAVE
Before I go over the most effective saving habits. First of all, are you being paid enough?
if your getting paid $10 an hour all the saving in the world isn't going to help, ask your employer for a raise, take on more responsibility, work a little overtime or ask yourself if you can I earn more elsewhere!
Here are some quick tips
- Ditch the coffee (make it at home)
- Ditch takeaways (you can eat out with friends once in a while but takeouts are out!)
- Ditch your car for public transport or consider a fuel efficient vehicle. (I finally let go of my prized z4 BMW convertible that cost me an arm and leg on fuel and maintenance.)
- Ditch pointless Subscriptions. (keep a record of them and don't let any go unnoticed. Youtube premium is the best in my opinion as you get music and video in one and you can download at home to save costs on data.)
- Ditch the expensive grocers. Find your cheapest local supermarket and get meal prepping! (calculate the cost per meal and always try to beat it, however, do your best to never sacrifice on health, thats money well spent)
- Ditch being lazy, energy is money! (find a local gym and maximise their facilities (showers included, save on that hot water)
- Ditch Weekly or monthly plans. Negotiate annually, lock in at a better price. (gyms, car insurance and other necessities by signing up for a year or longer.)
- Ditch smoking and drinking, not only are they a financial expense but they are an expense on your energy. (if your in a group that gives you a hard time about it and you've stated your why to them... ditch them as well)
- Ditch being complacent with price. Most countries now have a set price on everything or so it appears. You can actually still get more off and other benefits by bargaining and negotiating. It never hurts to ask and your also training your skill in barter and negotiation. Noah Kagen (CEO of AppSumo) always made a point to ask for something. If its a free coffee, 10% off or a complimentary upgrade to business class. Worst that happens they say no F**k off. Train your rejection muscle as well as the courage to ask for what you want.
- Ditch the house and apartment and either find a flat (shared living) or go spend more time with mum.... yes go live at home. (this is a bitter pill to swallow for most but the payoff is huge and she won't mind as long as you do some chores)
"Getting rid of the BMW was no longer a sacrifice; instead, it became a conscious decision to spend his money elsewhere and start building a financially secure future." (Tony Robbins Money Master the Game)
Let me lay it out for you one more time
STEP 1: Sacrifice
STEP 2: Set a Amount to aim for and the timeframe to achieve it in.
Recommended Amount
$100,000
Timeframe 1-3 years
(take into account your personal factors such as income, family, living and tax.)
STEP 3 (Bonus Step)
Begin playing around with a new skill. learn the basics as you save and strive towards your freedom fund target.
- Read books
- Learn a new set of skills that will benefit your future self
- Go to the gym and develop a physique. (I found this kept me sane during this process)
REMEMBER this process is boring and repetitive. Enjoy the process, you are striving for a clear and simple goal. Track your progress Weekly and make corrections as you go. the skills you will learn will support you even at a later stage in your life as you know how to handle and resource money not to mention the self discipline you are cultivating throughout this process.
A freedom fund is not only meant to provide you with the monetary amount to leave your situation. It will teach you the habits and skills that will prepare you to better achieve this lofty ambition.
Noah Kagan the author of Million Dollar Weekend said
"focus above all else on being a starter, an experimenter, a learner." (Noah Kagan Million Dollar Weekend)
You have been given a quest.
You get to choose when and how.
You can decide where.
you, you, you.....
the power has always been in you.
you may feel stuck but remember this information is only impactful if you take action on it.
I'll say it one more time in case that wasn't clear.
you may feel stuck but remember this information is only impactful if you take action on it!
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let me know how your journey is going, would love to hear from you.