We mentioned here what the meaning of wealth is. There is a big difference between being wealthy and being financially independent. While financial independence is based on a number, wealth is a mindset and no amount of money will ever make you wealthy!
Once you have the SMART Mindset and Psychology of Wealth, it is much easier to achieve financial independence and overcome any obstacle that you may face. Financial Independence involves implementing the SMART Financial Strategies and investing in SMART Investment products.
What does financial independence mean to you? Here are some definitions that I use:
- Financial Security – This is the amount of money you make and earn that covers your financial NEEDS but not necessarily your WANTS. So you have enough to cover your rent or mortgage, necessary food, clothing, cars, (this is not filet mignon, Gucci, or a Masarati!), and basic entertainment expenses.
- Financial Independence – This is where you have your NEEDS covered but you don’t have to work at all. Your income from investments or passive income from additional sources of income or businesses cover your needs so that you have the time to do what you WANT to do.
- Financial Freedom – This is the stage where you don’t have to work at all and your NEEDS and all your WANTS are covered. At this stage the income from your investments and/or businesses give you complete freedom to do and buy everything you want.
If you are truly wealthy (intangible aspects of life – Balanced Inner and Outer Stable Table) and are financially independent, you will be at a point where you fell as though you are living out your true purpose in life. You cannot become financially independent by just your income or earnings. Many feel as though they need to work more, get a raise or promotion, or find a new job to become financially independent.
The problem with this line of thought is that you are trading time for money. We only have 24 hours in a day, so there is a limit to doing this. Instead, you want to trade your money for even more money. This is called leverage. You will have to create The SMART Money System where your investments and businesses work for you 24/7. You want to invest not only for growth, but most importantly for income.
The goal is that your investments grow enough where the income from them is enough to make you financially secure, financially independent, and hopefully financially free!
Follow the next three steps to get you on the path to financial independence and freedom.