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Abstract

ad+original+book&pd_rd_r=f5ad014c-5572-4fa4-bafc-c2901091a672&pd_rd_w=yzjSq&pd_rd_wg=so61S&pf_rd_p=0ec05f25-9534-48fe-9c3e-40b89957230e&pf_rd_r=93S6906Q59CSZZJXYN0V&qid=1603644831&sr=8-8">ich Dad Poor Dad, by Robert Kiyosaki</a></li><li>Calculate your financial freedom number so that you are crystal clear on how much passive income you need to achieve financial freedom. Mine was 500- $1000 per book Source: <a href="https://self-publishingschool.com/much-cost-publish-book/">Self-Publishing School</a></li><li>Approximate cost to self-publish 12 Ebooks: $ 6000- $12,000</li></ul>Real Estate Investing<ul><li>Average Property Value:$ 225,000</li><li>Approximate cost to acquire each property (i.e. 5% down payment, closing costs, etc): $9,000</li><li>Total cost to acquire 4 properties: Approximately$ 36,000</li><li>Cost per year (since it took Skhai 12 years to purchase all properties): $3,000</li><li>Source: <a href="https://dqydj.com/historical-home-prices/">Median Home Values from 1950-2020</a></li></ul>Based on this example, Skhai needed to save$ 1000 per year to self-publish and $3000 per year towards her real estate investments. But let’s say that these estimates are a bit modest and we increase these estimates by 50%. Skhai would then have needed to save approximately$ 6000 per year for the last 12 years (and keep her living expenses low) to achieve financial freedom.With median income in the US over the course of the last 12 years being <a href="https://www.epi.org/blog/slowdown-in-household-income-growth-continues-in-2018/"> $50,000-$ 65,000</a> this is a savings rate of approximately 10%Key Take-awaysEven if all of the numbers and explanations above are annoying and you stopped reading after the first paragraph, please remember the following.You can become financially free on a median income if you:<ul><li>Find ways to increase your income (ex: Skhai wrote Ebooks in her free time!)</li><li>Save aggressively (i.e. 10–30% of your income; even more if possible)</li><li>Keep your expenses low (i.e. Don’t get the most expensive house or apartment that you can afford unless you are getting income from some of the rooms)</li><li>Learn and apply (ex: Skhai had to learn and develop a foundation in Real Estate investing to achieve her financial freedom goals)</li><li>Move to a less expensive location — if it’s too expensive to pull this off where you live!</li></ul>Don’t let the fear or misconception that financial freedom is out of reach prevent you from getting started. You don’t need to be a millionaire to achieve it. You don’t need to have a six-figure income to get there (though that helps!) and you most definitely don’t need a finance background.What you do need is a burning desire to live life on your own terms, discipline, a commitment to leveraging that burning desire into applied action, and dedication to keep going when the going gets tough.I was not a millionaire when I became financially free. And if you’ve read this far, then you’re clearly invested enough to get there too. Start from where you are, today.<h1 id="04f1">Misunderstanding #3</h1>Misunderstanding: Financial freedom is a goal for greedy and selfish people Truth: Everyone deserves and has the right to pursue financial freedom. Greedy people are financially free. Kind people are financially free. Giving people are financially free. For some people, the more they have, the more they want. For others, the more they have, the more they give. Which one are you? Danger: If I think financial freedom is only for greedy and selfish people then I let myself off the hook. And when I embrace a limiting belief in one area of my life, I leave room for limiting beliefs to take over all areas of my life. Nothing kills dreams faster than limiting beliefs.When you think about it — is it greedy to have a goal to figure out how to build a strong financial house? To design a life where you don’t need to work for money, but rather to work to contribute and make a difference?<a href="http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-According-to-New-CareerBuilder-Survey">What percentage of the population is going to work today simply because they want or need the money?</a> What would society look like if instead of working for money, the large majority of people were working because they wanted to, because it fulfilled a passion and purpose inside of them because their work was the ideal expression of their true talents, of their creativity?Think about this. If you didn’t need to work for money, how would you spend your time?<figure id="3488"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/0*hp7qYm1QmTEFrRR8"><figcaption>Photo by <a href="https://unsplash.com/@markadriane?utm_source=medium&utm_medium=referral">MARK ADRIANE</a> on <a href="https://unsplash.com?utm_source=medium&utm_medium=referral">Unsplash</a></figcaption></figure>The possibilities are endless:<ul><li>Spend more time with your kids, parents, close relatives, and friends</li><li>Exercise more</li><li>Eat better — because now we actually have time to food prep</li><li>Learn and explore the things that are of greatest interest to you</li><li>Travel to wherever, whenever</li><li>Give more — to whatever causes you believe in</li><li>Live more, love more, laugh more</li></ul>I know. The real world sometimes feels like the place where dreams go to die. So many of us no longer bother to dream, to set goals, to clarify, envision, and map out that which we truly desire.It could be that we are terrified of the disappointment of not getting there, so we hold on to beliefs that prevent us from ever having to try, and possibly fail or risk disappointment.I’m familiar with this kind of disappointment: eating garbage for months, setting zero weight loss goals, and then vehemently refusing to get on the scale.During those seasons, the reality of eating like I was still a 25 year old is too tough to bear, so I just choose to not face it. Until I realize that I can face the pain of discomfort today, or the pain of regret tomorrow. Sometimes this is enough to snap me out of it.The road less traveled often feels way too scary. But isn’t that reason enough to take it?We are conditioned to have negative beliefs about those who pursue financial freedom, so we never consider seeking it on our own.We want to be good people; not greedy people, not selfish people. But good righteous people who treat others the way we want to be treated. So we follow conventional beliefs about money and the kind of people who set financial freedom goals.It’s understandable why we do this. I’ve certainly been there too.As humans, we are tribal creatures. Thinking, believing, and or doing something different could cost us our tribe; our place of belonging. And with everything else that we’re grappling with

Options

on a daily basis, why take the risk?So we become blind to the danger and limitations of these beliefs.We crave social proof. We make sacrifices to keep up with the Joneses. We take the conventional path.There are greedy people who are financially free. And there are kind, giving people who are financially free. And probably a whole host of others in the middle.According to research by the <a href="https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf">Consumer Financial Protection Bureau</a> and the <a href="https://www.sciencedirect.com/science/article/abs/pii/S0092656616300836?dgcid=raven_sd_via_email">Journal of Research in Personality</a>, the most common traits of financially secure individuals are:<ul><li>strong internal frame of reference (i.e. judging their success by their own yardstick, not that of others)</li><li>perseverance</li><li>strong executive functioning skills (i.e. self-control, planning, focus)</li><li>sense of purpose</li></ul><blockquote id="5577">“The goal isn’t more money. The goal is living life on your terms.” –Chris Brogan</blockquote>I started making baby steps towards financial freedom during my first year as a teacher.My main habits were:<ul><li>obsessively consuming personal finance books</li><li>consistently saving</li><li>aggressively paying off my student loans (which I did in less than 2 years)</li><li>seeking ways to increase my income (by working during the summer)</li></ul>Greed and selfishness were never allowed in my car. Instead, a passion to live and give greatly was my driver, taking me to far places and serving as fuel during the rough patches.And maybe unconsciously, I was still trying to figure out how to answer my dad’s question…<h1 id="63fc">Misunderstanding #4</h1>Misunderstanding: As long as I work hard I can achieve financial freedom Truth: There are tons of extremely hard-working people who never achieve financial freedom Danger: If I think that hard work is all that matters on the path to financial freedom, I may not engage in the level of learning, mindset shifts, and habit building that financial freedom often requires.<figure id="6704"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/0*_jUqZ7uVkkEK2dHY"><figcaption>Photo by <a href="https://unsplash.com/@markusspiske?utm_source=medium&utm_medium=referral">Markus Spiske</a> on <a href="https://unsplash.com?utm_source=medium&utm_medium=referral">Unsplash</a></figcaption></figure>Working hard is critical for financial freedom. But it’s not enough.Here’s the financial freedom formula that I recommend:<ul><li>(Work and learn hard) + (apply, reflect and adjust hard) + a bit of luck= financial freedom</li></ul>Most of us only have one part of the equation. And it’s simply not enough.Here are a few statistics to prove my point:<ul><li>According to <a href="https://worldpopulationreview.com/country-rankings/hardest-working-countries">World Population Review</a>, The USA is the 10th hardest-working country in the world.</li><li>The US also has the <a href="https://en.wikipedia.org/wiki/Median_income">6th highest median income</a> in the world</li><li>Despite these findings, <a href="https://www.cbsnews.com/news/70-americans-are-struggling-financially/">7 in 10 Americans are struggling with at least one aspect of financial stability.</a></li></ul>These findings reveal the following:<ul><li>Hard work alone doesn’t guarantee financial freedom</li><li>High income alone doesn’t guarantee financial freedom</li></ul>As a matter of fact, there are tons of broke millionaires and financially free school teachers.If I make a million dollars per year but my expenses are 1.2 million dollars per year, I’m not financially free. Alternatively, if I make $60,000 per year but my expenses are$ 50,000 per year, I have $10K per year to dedicate towards my financial freedom goals.The bottom line is, you can work hard. Make a decent income. Contribute 10% to your retirement account each year and likely have a decent retirement post 65. Then you can live 10–15 years doing whatever you want, provided that mentally and physically things are still in tack.Many choose this path for a variety of reasons, and that’s totally ok. But if you’re reading this article, I’m guessing that you are looking for an alternate path.For those of us who would rather not wait until 65 or 70 to have a higher level of freedom, working hard is not enough.Instead, you need:<ul><li>To learn as much as possible about personal finance</li><li>Determine your financial freedom number</li><li>Get clear on your financial freedom goals and overall plan (income goals, savings goals, investing goals, etc)</li><li>Apply your learnings as quickly and consistently as possible</li></ul><blockquote id="b024">I remember saying to my mentor, ‘If I had more money, I would have a better plan.’ He quickly responded, ‘I would suggest that if you had a better plan, you would have more money.’ You see, it’s not the amount that counts; it’s the plan that counts.” — Jim Rohn</blockquote>Personally, I am no stranger to hard work. I worked 1–2 jobs on average during college. I worked 1–2 jobs after college. When I wasn’t working 1–2 jobs I was enrolled in school full time for my Masters and Doctorate degrees.But hard work hasn’t been the only component that has helped me on the path towards financial freedom. I’ve learned (via tons of personal finance books, articles, podcasts, videos, etc), I’ve planned and applied (via monthly, quarterly, and annual goal setting, real estate investing, index fund investing, etc,) and also experienced a bit of luck along the way.Work hard — but remember that that’s only 25% of the financial freedom formula.ClosingDear Dad, After twenty years I am finally able to answer your question.“Weh yuh mean teacha?” “So weh yuh go a Georgetown fah?”I went to Georgetown for the same reason many of us go to college. Because I was told that it was the best next step after high school. Because I had no other plan. Because I needed time to figure out what I wanted to do.I didn’t enter Georgetown to become a teacher. However, I spent the summer of my senior year teaching kids, who taught me way more than I taught them. There I recognized that many of them wouldn’t ever have the opportunities that I had had, simply by virtue of their geographical location, the quality of schools in that area, and other social factors.These kids looked like me, but would likely not have the level of access to quality education that I had experienced. I was outraged and motivated to change that. My purpose had found me.I learned along the way that financial freedom didn’t require a medical or law degree. I challenged myself to live my soul purpose while simultaneously vowing to become financially free.I was talking to kids about dreaming big, I wouldn’t make a liar out of myself by playing it small. I wouldn’t send the message that once you’ve chosen your career path, you can do nothing else but that one thing. That’s a dangerous, dream-sucking, hand-cuff peddling lie.I adopted a both/and philosophy, and it served me. It has allowed me to continue to contribute to urban education outside of the classroom in ways that are more conducive to my current lifestyle.There were tons of lessons, misunderstandings, and missteps along the way.I will re-share the four critical ones that I wish I had known at the very beginning of my journey.<ul><li>You don’t need to be debt-free to be financially free</li><li>You don’t need to be a millionaire (or have a six-figure income) to be financially free</li><li>You don’t need to be greedy or selfish to be financially free</li><li>You can’t just work hard to be financially free — you need the other 75% of the equation</li></ul>(Work and learn hard) + (apply, reflect and adjust hard) + a bit of luck= financial freedomYou can do all of this while pursuing your soul purpose along the way.Dad, your question has remained in my unconscious for decades. I’m sure by now you have absolutely no recollection of having posed it. Nonetheless, it helped me to seek answers along the way, even when I wasn’t aware that I was actively seeking. I thank you.And for those of you out there who are still seeking answers, my hope is that this may provide a starting point; a dose of hope, motivation, support as well as a few tangible resources.Do the work. Remove the shackles. Live life on your terms. And never look back.This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.</article></body>

Financial Management

4 Dangerous Misunderstandings about Financial Freedom

Truths, tools, and tactics to support your financial freedom goals

“Weh yuh mean teacha?” “So weh yuh go a Georgetown fah?”

I attempt to survive this intense, pointed questioning from my dad.

The trigger?

My not so lucrative post-graduate career choice.

May 2000. Bachelor’s Degree. Georgetown University.

Elementary School Teacher. (How could I?)

Dad’s voice again.

“Weh yuh mean teacha?” “So weh yuh go a Georgetown fah?”

Now I’m facing these doubts that (always ready and waiting on the sidelines) seem ready for yet another hostile takeover.

Maybe I was making a terrible mistake. Why hadn’t I gone to business school or chosen a more lucrative career? Had I been selfish in taking my career counselor’s advice to just follow my passion?

I again feel the intense impact of the double-edged sword that so many immigrants carry. Immense gratitude for these golden opportunities. And an unspoken fear of possibly squandering them.

But maybe it’s not an immigrant thing. Maybe it’s a natural pressure that we face when on paper we are old enough to be in charge of your lives but in reality, our 21-year-old brains aren’t ready. (And side note — who do we call when our 40-year-old brains aren’t ready for the real world either?)

So maybe you experienced that postgraduate “I desperately want to adult but please don’t force me to” fear too?

OK, so let’s go back to May 2000

I’m a college graduate now, ready to take on the world! But this unwelcome burst of fear keeps hitting me upside the head.

Desperate for relief, I do a mental checklist:

Georgetown degree ✔ Student loans ✔ Teaching contract ✔ Starting salary more than what I would’ve earned had I skipped college altogether ✖

OK, that didn’t help.

I start to hear my dad again, “So weh yuh go a Georgetown fah?”

I don’t know. I didn’t know. I’m hoping and praying for this question to remain rhetorical. After all, didn’t most of us go to college simply because we were told to?

Fortunately, time passes like it always does. And with time we question. With time we reflect. With time we learn, understand, and gain some wisdom.

Twenty years have passed. Twenty years to ponder this question.

Twenty years to finally say out loud what my under-developed brain seemed to intuitively understand even then:

you can choose any purpose or calling in life, and simultaneously choose a path towards financial freedom.
when given a choice of either/or, you can choose both/and

Twenty years to also acknowledge what my under-developed brain didn’t fully understand then:

On the path towards financial freedom:

there are dangerous misunderstandings
these misunderstandings could often rob us of one of our greatest levers on the path towards financial freedom: time

Below I outline four dangerous misunderstandings about financial freedom that I discovered while on the path.

Some of these took me years to learn. I share them with you to shorten your learning curve, save you time, and possibly accelerate your own financial freedom goals.

I became financially free shortly before the age of 40, an accomplishment that has had an incredibly positive impact on my life.

My hope is that with greater understanding and the financial shackles removed, you too can build a life and a legacy that allows you to freely live your purpose, on your own terms.

Misunderstanding #1

Misunderstanding: Being debt-free is the same as (and as critical as) being financially free Truth: Financial freedom trumps debt freedom Danger: If I think debt freedom and financial freedom are the same, I may never become financially free

Being debt-free is not the same as being financially free. You can be debt-free and still need to get up at 6 am to go to work every day. (Which is great if you love your job, and horrible if like most Americans, you don’t.)

Because even though you don’t have debt, you like all of us, still have monthly obligations. Though it varies from person to person, this may include rent, monthly recurring costs like cell phone and cable bills, utilities, etc — oh, and you probably need money to buy food. Everyone’s gotta eat.

You can be financially free without being debt-free. If you have passive income that provides adequate monthly recurring income without you having to go to work for it (i.e. trading time for money), it doesn’t always matter if you have debt or not.

Examples:

Example 1: Debt Free

Savannah spent the last ten years paying off her debts. Today she has no student loans, no car note, and no credit card bills. Savannah is debt-free!
Even though Savannah is debt-free, she needs enough income to pay $1000 for rent, $400 for food, $400 for entertainment, $300 for utilities, $300 for car insurance/gas each month, $300 for her retirement savings, and $200 for other miscellaneous items each month
Since Savannah has no passive income streams, Savannah needs to go to work and earn at least $2900 in monthly after-tax income in order to afford her monthly recurring expenses. And since Savannah hates her job, being debt-free hasn’t increased her happiness as much as she had hoped.

Example 2: Financially Free

Skhai spent the last 12 years working to become financially free. She has written 12 Ebooks in the last 12 years, using any off time that she has had after work. Each Ebook generates approximately $100 in passive income each month for a total of $1200 in monthly passive income.
Additionally, Skhai has purchased 4 real estate investment properties in the last 12 years. She has been able to make a downpayment of less than 5% on each property by living in each property, then moving approximately every 3 years and converting her previous home into an investment property.
Each property generates approximately $400 in passive income, for a total of $1600. Skhai now has a total of $2800 in passive income that comes in each month, whether she goes to work or not.
Skhai’s monthly expenses consist of $900 for rent (she’s now renting), $400 for food, $300 for entertainment, $300 for utilities, $200 for car insurance/gas each month, $150 for student loan payment (debt), $200 for her car note (debt), $150 for her retirement savings and $200 for other miscellaneous expenses. Her total monthly expenses total $2800
Even though Skhai is not debt-free. She is financially free. She has enough passive income to cover her monthly expenses (including debt) without having to go to work every day. Skhai may choose to keep her day job (because she loves it and it helps her fulfill her purpose) or quit her day job (because it’s her number one daily stressor and no longer worth the headache.) Now that she’s financially free, how she spends her time is entirely up to her!

To further distinguish between debt-free and financial freedom:

Learn and understand the difference between good debt and bad debt in making sound financial decisions. Resource: Good Debt vs Bad Debt

Learn about passive income and multiple income streams. Apply. Resource: Rich Dad Poor Dad, by Robert Kiyosaki
Calculate your financial freedom number so that you are crystal clear on how much passive income you need to achieve financial freedom. Mine was $4314 when I became financially free. What’s yours? Click here to access my financial freedom number template

“Real wealth is not about money. Real wealth is: not having to go to meetings, not having to spend time with jerks, not being locked into status games, not feeling like you have to say ‘yes,’ not worrying about others claiming your time and energy. Real wealth is about freedom.” –James Clear

When we don’t clearly understand the difference between debt-free and financially free we struggle to make the right financial decisions.

In the long term, this may mean that we never achieve financial freedom. We run out of time, we give up, we roll through life on defense, never getting a chance to get back in the driver’s seat.

On this path, we lament the past. We barely survive the present and we risk an endangered future. Life is way too short for all of that.

Misunderstanding #2

Misunderstanding: To be financially free you need to be a millionaire. Truth: You can be financially free without being a millionaire Danger: If I think it takes millionaire status for me to become financially free, I may not even want to try. That bar is way too high so why even bother?

In the previous example, Skhai is financially free however, this does not mean that she’s a millionaire.

Here’s how Skhai could be financially free without being a millionaire:

Ebook Publishing

Ebook publishing cost: $500-$1000 per book Source: Self-Publishing School
Approximate cost to self-publish 12 Ebooks: $6000-$12,000

Real Estate Investing

Average Property Value: $225,000
Approximate cost to acquire each property (i.e. 5% down payment, closing costs, etc): $9,000
Total cost to acquire 4 properties: Approximately $36,000
Cost per year (since it took Skhai 12 years to purchase all properties): $3,000
Source: Median Home Values from 1950–2020

Based on this example, Skhai needed to save $1000 per year to self-publish and $3000 per year towards her real estate investments. But let’s say that these estimates are a bit modest and we increase these estimates by 50%. Skhai would then have needed to save approximately $6000 per year for the last 12 years (and keep her living expenses low) to achieve financial freedom.

With median income in the US over the course of the last 12 years being $50,000-$65,000 this is a savings rate of approximately 10%

Key Take-aways

Even if all of the numbers and explanations above are annoying and you stopped reading after the first paragraph, please remember the following.

You can become financially free on a median income if you:

Find ways to increase your income (ex: Skhai wrote Ebooks in her free time!)
Save aggressively (i.e. 10–30% of your income; even more if possible)
Keep your expenses low (i.e. Don’t get the most expensive house or apartment that you can afford unless you are getting income from some of the rooms)
Learn and apply (ex: Skhai had to learn and develop a foundation in Real Estate investing to achieve her financial freedom goals)
Move to a less expensive location — if it’s too expensive to pull this off where you live!

Don’t let the fear or misconception that financial freedom is out of reach prevent you from getting started. You don’t need to be a millionaire to achieve it. You don’t need to have a six-figure income to get there (though that helps!) and you most definitely don’t need a finance background.

What you do need is a burning desire to live life on your own terms, discipline, a commitment to leveraging that burning desire into applied action, and dedication to keep going when the going gets tough.

I was not a millionaire when I became financially free. And if you’ve read this far, then you’re clearly invested enough to get there too. Start from where you are, today.

Misunderstanding #3

Misunderstanding: Financial freedom is a goal for greedy and selfish people Truth: Everyone deserves and has the right to pursue financial freedom. Greedy people are financially free. Kind people are financially free. Giving people are financially free. For some people, the more they have, the more they want. For others, the more they have, the more they give. Which one are you? Danger: If I think financial freedom is only for greedy and selfish people then I let myself off the hook. And when I embrace a limiting belief in one area of my life, I leave room for limiting beliefs to take over all areas of my life. Nothing kills dreams faster than limiting beliefs.

When you think about it — is it greedy to have a goal to figure out how to build a strong financial house? To design a life where you don’t need to work for money, but rather to work to contribute and make a difference?

What percentage of the population is going to work today simply because they want or need the money? What would society look like if instead of working for money, the large majority of people were working because they wanted to, because it fulfilled a passion and purpose inside of them because their work was the ideal expression of their true talents, of their creativity?

Think about this. If you didn’t need to work for money, how would you spend your time?

The possibilities are endless:

Spend more time with your kids, parents, close relatives, and friends
Exercise more
Eat better — because now we actually have time to food prep
Learn and explore the things that are of greatest interest to you
Travel to wherever, whenever
Give more — to whatever causes you believe in
Live more, love more, laugh more

I know. The real world sometimes feels like the place where dreams go to die. So many of us no longer bother to dream, to set goals, to clarify, envision, and map out that which we truly desire.

It could be that we are terrified of the disappointment of not getting there, so we hold on to beliefs that prevent us from ever having to try, and possibly fail or risk disappointment.

I’m familiar with this kind of disappointment: eating garbage for months, setting zero weight loss goals, and then vehemently refusing to get on the scale.

During those seasons, the reality of eating like I was still a 25 year old is too tough to bear, so I just choose to not face it. Until I realize that I can face the pain of discomfort today, or the pain of regret tomorrow. Sometimes this is enough to snap me out of it.

The road less traveled often feels way too scary. But isn’t that reason enough to take it?

We are conditioned to have negative beliefs about those who pursue financial freedom, so we never consider seeking it on our own.

We want to be good people; not greedy people, not selfish people. But good righteous people who treat others the way we want to be treated. So we follow conventional beliefs about money and the kind of people who set financial freedom goals.

It’s understandable why we do this. I’ve certainly been there too.

As humans, we are tribal creatures. Thinking, believing, and or doing something different could cost us our tribe; our place of belonging. And with everything else that we’re grappling with on a daily basis, why take the risk?

So we become blind to the danger and limitations of these beliefs.

We crave social proof. We make sacrifices to keep up with the Joneses. We take the conventional path.

There are greedy people who are financially free. And there are kind, giving people who are financially free. And probably a whole host of others in the middle.

According to research by the Consumer Financial Protection Bureau and the Journal of Research in Personality, the most common traits of financially secure individuals are:

strong internal frame of reference (i.e. judging their success by their own yardstick, not that of others)
perseverance
strong executive functioning skills (i.e. self-control, planning, focus)
sense of purpose

“The goal isn’t more money. The goal is living life on your terms.” –Chris Brogan

I started making baby steps towards financial freedom during my first year as a teacher.

My main habits were:

obsessively consuming personal finance books
consistently saving
aggressively paying off my student loans (which I did in less than 2 years)
seeking ways to increase my income (by working during the summer)

Greed and selfishness were never allowed in my car. Instead, a passion to live and give greatly was my driver, taking me to far places and serving as fuel during the rough patches.

And maybe unconsciously, I was still trying to figure out how to answer my dad’s question…

Misunderstanding #4

Misunderstanding: As long as I work hard I can achieve financial freedom Truth: There are tons of extremely hard-working people who never achieve financial freedom Danger: If I think that hard work is all that matters on the path to financial freedom, I may not engage in the level of learning, mindset shifts, and habit building that financial freedom often requires.

Working hard is critical for financial freedom. But it’s not enough.

Here’s the financial freedom formula that I recommend:

(Work and learn hard) + (apply, reflect and adjust hard) + a bit of luck= financial freedom

Most of us only have one part of the equation. And it’s simply not enough.

Here are a few statistics to prove my point:

According to World Population Review, The USA is the 10th hardest-working country in the world.
The US also has the 6th highest median income in the world
Despite these findings, 7 in 10 Americans are struggling with at least one aspect of financial stability.

These findings reveal the following:

Hard work alone doesn’t guarantee financial freedom
High income alone doesn’t guarantee financial freedom

As a matter of fact, there are tons of broke millionaires and financially free school teachers.

If I make a million dollars per year but my expenses are 1.2 million dollars per year, I’m not financially free. Alternatively, if I make $60,000 per year but my expenses are $50,000 per year, I have $10K per year to dedicate towards my financial freedom goals.

The bottom line is, you can work hard. Make a decent income. Contribute 10% to your retirement account each year and likely have a decent retirement post 65. Then you can live 10–15 years doing whatever you want, provided that mentally and physically things are still in tack.

Many choose this path for a variety of reasons, and that’s totally ok. But if you’re reading this article, I’m guessing that you are looking for an alternate path.

For those of us who would rather not wait until 65 or 70 to have a higher level of freedom, working hard is not enough.

Instead, you need:

To learn as much as possible about personal finance
Determine your financial freedom number
Get clear on your financial freedom goals and overall plan (income goals, savings goals, investing goals, etc)
Apply your learnings as quickly and consistently as possible

I remember saying to my mentor, ‘If I had more money, I would have a better plan.’ He quickly responded, ‘I would suggest that if you had a better plan, you would have more money.’ You see, it’s not the amount that counts; it’s the plan that counts.” — Jim Rohn

Personally, I am no stranger to hard work. I worked 1–2 jobs on average during college. I worked 1–2 jobs after college. When I wasn’t working 1–2 jobs I was enrolled in school full time for my Masters and Doctorate degrees.

But hard work hasn’t been the only component that has helped me on the path towards financial freedom. I’ve learned (via tons of personal finance books, articles, podcasts, videos, etc), I’ve planned and applied (via monthly, quarterly, and annual goal setting, real estate investing, index fund investing, etc,) and also experienced a bit of luck along the way.

Work hard — but remember that that’s only 25% of the financial freedom formula.

Closing

Dear Dad, After twenty years I am finally able to answer your question.

“Weh yuh mean teacha?” “So weh yuh go a Georgetown fah?”

I went to Georgetown for the same reason many of us go to college. Because I was told that it was the best next step after high school. Because I had no other plan. Because I needed time to figure out what I wanted to do.

I didn’t enter Georgetown to become a teacher. However, I spent the summer of my senior year teaching kids, who taught me way more than I taught them. There I recognized that many of them wouldn’t ever have the opportunities that I had had, simply by virtue of their geographical location, the quality of schools in that area, and other social factors.

These kids looked like me, but would likely not have the level of access to quality education that I had experienced. I was outraged and motivated to change that. My purpose had found me.

I learned along the way that financial freedom didn’t require a medical or law degree. I challenged myself to live my soul purpose while simultaneously vowing to become financially free.

I was talking to kids about dreaming big, I wouldn’t make a liar out of myself by playing it small. I wouldn’t send the message that once you’ve chosen your career path, you can do nothing else but that one thing. That’s a dangerous, dream-sucking, hand-cuff peddling lie.

I adopted a both/and philosophy, and it served me. It has allowed me to continue to contribute to urban education outside of the classroom in ways that are more conducive to my current lifestyle.

There were tons of lessons, misunderstandings, and missteps along the way.

I will re-share the four critical ones that I wish I had known at the very beginning of my journey.

You don’t need to be debt-free to be financially free
You don’t need to be a millionaire (or have a six-figure income) to be financially free
You don’t need to be greedy or selfish to be financially free
You can’t just work hard to be financially free — you need the other 75% of the equation

(Work and learn hard) + (apply, reflect and adjust hard) + a bit of luck= financial freedom

You can do all of this while pursuing your soul purpose along the way.

Dad, your question has remained in my unconscious for decades. I’m sure by now you have absolutely no recollection of having posed it. Nonetheless, it helped me to seek answers along the way, even when I wasn’t aware that I was actively seeking. I thank you.

And for those of you out there who are still seeking answers, my hope is that this may provide a starting point; a dose of hope, motivation, support as well as a few tangible resources.

Do the work. Remove the shackles. Live life on your terms. And never look back.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.