Sunday, August 27, 2006

Financial Freedom

Financial Freedom

We are back from our fabulous holiday - re-visiting an Island we went to 35 years ago! You have had time to digest the the two sides of the Freedom triangle. To-day let us look at the all important third side that will for sure help make the other two sides possible.

Financial Freedom:

This term means different things to different people. I will give you my definition of it. “It is having enough regular income to live a comfortable lifestyle of your choice without the constant pressure of funds shortage”. “It is also not having to depend solely on the exchange of your time for money”. Some other indications of one who has Finacial Freedom - "order from a menu in any restuarant by just looking at the left column without first looking at the right column!", "write a cheque without first checking the balance!"

Some examples to make this clear.

•Unemployed people of course. They have no income and where is the question of Financial Freedom.

•Most employees do not have Financial Freedom or even a chance of achieving one. It does not matter how big their paycheque is. Their income depends on their efforts and they trade their time and talents for money. If they are sick or cannot work for whatever reasons, the money stops. A 40% pension after 40 years of working for 40 hours a week is about all they can hope for – the pension.

•It is true of Self employed people (small business people are included in this category) Again their income is dependent on their effort and they are dependent on trading their time for money. These people do not even have pension as security unless they take care to save enough and invest for their old age.

Then who has financial Freedom? How does one get it?

The people who are born wealthy and inherit lots of money have Financial Freedom.

Big business owners have Financial Freedom. They take leverage of other peoples time and effort. They help a number of people earn an income from the business they built with their capital and sweat and in turn they keep a small percent of their income for themselves. They know the secret “one percent of 100 peoples’ effort is better than 100 percent of one person’s effort”. They depend on a network of people for their Income.

Please do not misinterpret Financial Freedom, as just having lots of money but it is more of how you earn it.

Now you have it. The three freedoms defined and explained. Those of you who have followed this now understand why Financial Freedom is needed first before one can expect to have Personal Freedom and Time Freedom.

So typical employees, who have none of the three freedoms have the following choices.

They can become self-employed and obtain some form of Personal Freedom. In order to get Financial Freedom, they have to expand their self-employment or small business into a big business by investing capital, taking risks and by putting lot of initial sweat into it. Once the income starts coming, they can invest it and establish a Residual Income for themselves.

How many unemployed people, how many employees, how many self-employed or small business owners can do this in order to get all three of these Freedoms?

Not too many, right? My husband and I have been fortunate enough to do it. We have Personal Freedom, we have Financial Freedom and we have Time Freedom. Now we want to help others get the same. That is if they want it and want it badly!

Yes there are options and I will show you all of them one by one if you are ready. You make the decision as to which option you want to choose.

In the mean time let us see what life can be when one has established a residual income and has achieved the personal freedom and time freedom.

Imagine this...

We live in a comfortable home on a two acre lot on a lake 40km away from nearest town. We work when we want to and play when we want to. We live six months here and six months in India. Coffee break time is any time we want it! Monday to Sunday is one long weekend if we so chose it or work 24/7 if that is what we want!

So what is your wish? How and where would you like to live? What would you like to do and when?

Think about it and get ready to make them happen. Write to me. I will be there to help you along.

Sunday, August 20, 2006

Time Freedom

Hope you all had a great weekend. I did. My husband and I decided we are going to enjoy the weekend and the week doing nothing in particulr - just relaxing and enjoying our 35th wedding anniversary.

That is something one can do when they are free to decide what they want to do!

Now that you know all about Personal Freedom, one side of the Freedom triangle, let us take a look at the other side to day.

TIME FREEDOM

A simple definition would be: “You are free to set your own schedule and are not under any time pressure” or another way to look at it is “the amount of your income does not depend on the amount of time you spend on earning it”.

Another form of Time Freedom is when one can increase their income while spending the same amount of time or even reduce the time and still increase the income.

Some examples:

•Most employees do not have Time Freedom. They have to follow the time schedules set by the company.

•Even the small business owners do not have Time Freedom. They are bound by the timings of their business and their customers. At least they have some sort of Personal Freedom as they do not have to answer to a Boss. They are their own boss.

•Big Business owners have flexible schedule but not total Time Freedom.

•In Network Marketing you can get this kind of Time Freedom by taking advantage of what is known as Leverage. Only big business people had this advantage until Network Marketing came along and offered every one this very valuable advantage.

Then who does have Time Freedom? How does one get it? Those who have established a sufficient and steady life long RESIDUAL INCOME. Their Income keeps coming regularly and they don’t have to worry about trading their time for income. Either their money is working for them or they are getting paid for the efforts they put in before.

Pension is a form of Residual Income and retired people have time freedom.

Unfortunately, for most the pension is usually not enough to live on. These people are so used to a time schedule all their life; they find it difficult to adjust to the newfound Time Freedom. Unless one plans their retirement activities and has some hobbies or other interests, the Time Freedom becomes more of hindrance than pleasure.

People who have saved enough money and invested it wisely can also have Residual Income and Time Freedom. Successful Authors, Actors/Actresses, Singers and fourth generation entrepreneur** can all establish a Residual Income and have Time Freedom.

This type of Residual Income and hence Time Freedom differs from the Pension and the Time Freedom of Retirees in two ways.

One, they don’t have to wait until they are 60 years old. Depending on how they achieve their Residual Income, it can start as early as 25.

Second, they have to stay active in their line of work in order to ensure continued supply of income.

Example, the investor has to monitor his investments. The authors may have to make book signing appearances or radio and television interviews to keep the public interested in their books. Similarly the actors and actresses have to keep up their public appearances and promote themselves.

Why is this Time Freedom important? Because there are so many things our world has to offer one these days and without this Time freedom, one will be stuck to their office and their desk, their bus schedule and so on and has very little time left to enjoy the good things in life. A quite walk in the woods, playing with grandchildren, traveling, reading books, listening to music, learning new skills, meeting new people and so on.

Please do not misinterpret Time Freedom, as having nothing to do and just sitting around. Time Freedom combined with Personal Freedom is more of doing what you want to do, when you want to do, wherever you want and with whom ever you want.

** We will get into what a fourth generation entrepreneur is all about in the future blogs.

Stay curious for now.

Tuesday, August 15, 2006

Freedom

I am posting the first blog today - 15th of August - India's Independence day!

Very appropriate that we start the blog with a clear understanding of what Independence or Freedom is all about and what we need to do to deserve it and to preserve it.

Freedom is not FREE! We have to work for it, pay for it and accept the responsibilities that comes with it.

I would gladly do all that and more to have my freedom any day. Won't you?

Let us start.

Freedom Defined ....

Before we can embark on our journey to Freedom, we need to define what we mean by Freedom. Countries become independent and have Freedom (July 1st marked such a day for my Canadian readers, July 4th to U.S. readers and Aug 15th Independence day is today for all my Indian readers!). But do you? Really?

What we are talking about here is the individual freedom. Individual freedom can be catogorised into three types.

Personal Freedom
Financial Freedom
Time Freedom

If we have to put these three types of Freedom in order of their importance, I will have to put Financial Freedom first and then the Personal Freedom and then Time Freedom. Without Financial Freedom one cannot expect to ever have the other two. But for our discussions here I like to go in a different order Personal Freedom, Time Freedom and then Financial Freedom. The reason for my choosing this order will become clear to you as you go along with me through the next few blogs.

I will cover the Personal Freedom in today's Blog.

Personal Freedom:

Simple definition would be: you have Personal Freedom “When you do things because you WANT to and not because you HAVE to”.

Some examples can illustrate this.

• Most Employees do not have personal freedom. They go to work because they have to and not because they want to. Yes, some may enjoy their work, like the work place and the environment, like their boss, their staff and fellow employees etc. But ask them if they would go to work tomorrow if the boss decided not to pay them anymore! If they say no way, then they are happy with their job but do not have Personal Freedom. Ask them if they have to do what the boss says even though they totally disagree and hate to do it. If they say yes, then they do not have Personal Freedom.

• Most children, boys and girls living with their parents and dependent on them for their food, shelter and education do not have Personal Freedom.

• In general most people do not have Personal Freedom as long they feel that they have to conform to what the society dictates. They have to wear certain clothes whether they like it or not. They have to celebrate certain functions whether they can afford to or not. As long as one is afraid of “what the neighbours will say” they do not have Personal Freedom.

Then who does? Who has Personal Freedom? Self-employed people have some Personal Freedom. They are their own Boss and they decide how much they get paid for how much work they do. Those who have already achieved Financial Freedom and are not dependent on anyone – boss, parents or neighbours opinion. Just think about all the people who do exactly what they want around you. Are they all Financially Free in their own right? If not they are radicals of some sort and their behaviour is usually short lived or they are great men like Mahathma Gandhi.

Why is this Personal Freedom so important? Should everyone must have it? Not at all. It is a personal choice. However, a person with this Freedom is more self reliant, self-confident and has more self worth. Usually exhibits better leadership qualities. Leads a much happier life just because the choices they make in life are theirs and they don’t spend their life blaming others for their misery and misfortune etc.

The Personal Freedom does not have to be absolute. There can be various degrees of Freedom. For example, you may decide to work for some one and give up your freedom in this area as the financial gains from this gives you freedom in other areas of importance in your life. That is ok. That is a compromise or a choice you make.

But please do not misinterpret Personal Freedom, as your right to do whatever you want. One must still obey the laws of the land and follow some rules of society that is meant for an orderly co-existence of people.

Wait for the next blog for Time Freedom.

Thursday, August 10, 2006

Special Blog for all Eaglets!

Welocme!

A new blog dedicated to all my Eaglets.

Watch for lot of news, tips, training and just fun in the coming weeks.