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What’s Your Financial Freedom Plan?

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Last month I reviewed Martin of Studenomics' book. Failure To Launch No More (read the review). My conclusion was that while the book will not win a Pulitzer, it is well worth the very small investment in your time and money to read it.)

Martin has another book out: Next Round's On Me: How-to Achieve Financial Freedom in Your 20s. This time, he's graciously provided a guest post, which will give you a flavor for the book and his writing style. I've got a few words to say about the book at the end, which will include an offer that you shouldn't refuse.

“Financial freedom sounds like a scam.”

I totally get that. I would be skeptical as well because this initially sounds like something you would hear on a late night infomercial. Promoting financial freedom in your 20s isn't easy in the era of online scams.

I don’t get offended when someone puts down financial freedom. I am however amused sometimes. It always surprises me how those who have no clue about money management, are in huge amounts of debt, or can’t get ahead are first to put down my ideas. On the other hand, my successful friends are always curious and open to a discussion.

Financial freedom is about being free and feeling free. I'm not promising you millions of dollars and beautiful girls as you sleep 12 hours a day.

What's financial freedom all about?

There are different levels of financial freedom ranging from:

  • Paying off your student loans.
  • Getting rid of credit card debt.
  • Being able to eat out often (daily for me).
  • Paying back your parents for college.
  • Joining that expensive gym.
  • Quitting your job.
  • Going on a trip for the first time.
  • Saving up enough money to live comfortably.

Freedom depends on what you want out of life and where you want to be.

  • If you enjoy your job, then keep it.
  • If you don’t want to travel full-time, you don’t have to.
  • If you want to eat out religiously, then you can.
  • If you want to kill your debt, then it’s possible.
  • If you want to buy the next round of drinks for your buddies, you better invite me.

Freedom depends on where you are and where you want to be. You see, there's a huge difference between where you are right now and where you want to be. I'm here to help you close that gap.

What’s your financial freedom plan?

Let's create a plan together so that you don't keep on keeping on forever.

Step #1: Decide on your goal.

What’s your goal? I’m not talking about dreams here. This has to be a goal with a tangible result and a deadline.

Do you want to pay off your student loans? Do you want to quit your job?

Only you know what you want. Your freedom will depend on this. Paying off your student loans will give you freedom because you no longer have to stress about owing money. You could now take some risks with your time and finances.

Step #2: Calculate the numbers.

What are the numbers like?

If you have debt, then you need to see how much you owe.

If you want to quit your job, you need to save up to cover your expenses.

If you want to work for yourself, you need to determine how much you could live off of and what you need to pay the bills.

For example, when my friend Bo wanted to quit his job, I had him write down his expenses. To quit his job he had to save up enough money to cover his expenses for 6 months. Why 6 months? This was the amount of time that he was willing to give himself before he went back to work as he grew his business.

What do your numbers look like? If you're not happy with how high your expenses are, then it might be time to make some phone calls to cut some of these expenses. I did this last year when I cancelled a subscription and lowered the features on my cell phone.

The numbers don't lie. It may be a bit intimidating at first when you see how much you owe or how much you need to quit a job. Don't worry. You can get there if you break this figure down.

Step #3: Figure out how long it’s going to take you.

How long will it take you?

I hate it when a friend gives me a vague timeline. We all know that “next winter” just isn’t concrete enough.

The math here is simple. Add the numbers up to see what your number is.

Do you have $20k worth of student debt? $5k worth of debt? Do you need to save $6k before you can quit your job?

How long will these goals take to reach? With a financial target in mind and a clear timeline, there's no stopping you.

Step #4: Give yourself some shortcuts.

You need to make things easy for yourself. This is why I believe in small wins and celebrating.

You save $100? Perfect, treat yourself to dessert.

You increase your income? Treat yourself with a drink of your choice.

Life gets tough. I don't want you to be bored out of your mind as you work towards your financial freedom plan. You need to have some fun. Celebrate the small wins and enjoy the ride. Before you know it, that debt will be paid off or you're going to be in Thailand.

Do you need a plan?

Yes.

You need a destination in mind. You can’t just have wild dreams in your mind that you never follow up on. When you have a plan you now have focus. You won't let useless distractions get in the way because you know exactly where you want to be.

If you ever get lonely, bored, or confused, please refer to this quote.

"Lacking an external focus, the mind turns inward on itself and creates problems to solve, even if the problems are undefined or unimportant. If you find a focus, an ambitious goal that seems impossible and forces you to grow, these doubts disappear.” - Tim Ferriss

Good luck to you!

Editor's Note: Martin also provided me with a copy of the book, Next Round's On Me: How-to Achieve Financial Freedom in Your 20s. Once again it is well worth your time. Right now, the price of the book is "just a damn buck" (one of my favorite Martin quotes). I don't know why he's pricing it so cheaply, but I'd take this opportunity to spread the word. How can it not be one of the best dollars you've ever spent?

Posted on May 13, 2015.

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