How often do you think about your finances?
“How long am I going to live?”
“How much money will I need to live?”
Have you ever sat down and really calculated how much wealth you need to accumulate to live a financially free life?
Doug and I recently attended yet another AMAZING Tony Robbins event. The event was five days of immersion on finances… Did I lose you … anyone? … Okay good ☺
We started by doing an exercise to define the exact amount of income to become “financially free”. And by financially free”, I mean the following categories:
- Financial Protection: This is when you have enough cash to keep things together. Your critical obligations include mortgage, utilities, transportation, food and insurance. This is basically 6-12 months of saved cash.
- Financial Security: This is enough cash to pay for the above items without having to ever work again.
- Financial Vitality: This is when you are earning enough from your investments to pay for your basic needs, mortgage, utilities, transportation, food, insurance AND three additional expenses like: basic entertainment, clothing or luxury items and children’s education.
- Financial Independence: This is when your investments produce income equal to your “work” income. You only work if you want to.
- Financial Freedom: This is your annual income “without having to work” plus additional luxuries like name brand clothes, jewelry, vacations, boats, cars and any other toys.
- Absolute Financial Freedom: This is when your income through investments allows you to do with certainty, whatever you want, with whomever you want, whenever you want. Without ever working again!
Do you know what category you’re in?
Honestly, I never even thought about categories for financial freedom – I thought you were either free or you weren’t.
What category do you WANT to be in?
You see, most of us go about our lives working, spending and maybe even saving without really knowing what the END game is.
By starting with this simple exercise – even just identifying the category in which we fell into and where we wanted to move from there – we got to the exact dollar amount we needed to reach our goals…
We now have direction and certainty! Let me tell you – That feels really, really good.
And the odd thing is … the amount or “figure” we thought we needed wasn’t it all!
You may just surprise yourself ☺