I want to go over one question I get here a lot, and rightfully so, because my brand is all about financial independence. So, what is financial independence? Financial independence is just when your passive income exceeds your expenses, which means you don’t have to trade your time or your space. So, you don’t have to be in a specific environment to create income to have income rolling in. Right when that passive income exceeds your expenses, that’s when you’re financially independent. That’s when you can do whatever you want with your time, which I think is what everyone is after in life – more freedom, options, and choices. So, what’s an example? You put $1 million into a dividend-returning stock that returns 5% a year. That’s $50,000 in passive income. So, you would have that passive income, and as long as your expenses are less than $50,000, then you are financially independent.
The second part of this question is, how do I become financially independent? I’m in a 9–5 job. I know that I need to do something to get out of that job. I know that I need more passive income. I know that I need, you know, a lot of different things financially. So, what do you do? First things first: you never want to get rid of your current income source. So, while you’re in that job, start being aware of what’s going on around you. What’s going on in your environment? What’s going on? What problems are your peers facing? What problems are other departments facing? What problems are your customers facing? How can you make your boss’s life easier? Start brainstorming. Write that down every single night. Go home, write down, okay, what are the problems I’m seeing in the marketplace? What problems am I seeing in that job? Is it just in daily life? And then every single night, you write down a problem and then you write down three solutions. And then you create those solutions and you make those into a product or service and you serve it to those people that are having those issues.
So, the second income stream you always want to start is one that feeds off of the first income stream. Because if one can help build up another one, that’s awesome. And then, once you are, once the time that you’re spending at work – if you are in a job and the time you’re spending in work is limiting your growth in your second income stream, then that’s when you kick that one out of there and start focusing on that second one.
And then, what you need to do with that income is you need to invest all of that money into yourself. You actually need to be doing that right now. So, what I teach and what I do, everything I teach I do myself. I invest at least ten percent of my income into knowledge. Knowledge is what changes. Knowledge is the catalyst to change. Once you have new knowledge, all you have to do is take action on that knowledge and you can create whatever lifestyle you want. So, I pay for knowledge, I pay for networks, I pay for mentoring, I pay for books, courses, and masterminds. Whatever it is, I spend about right around 10% of my income. That doesn’t mean every single month I’m spending that money, but that does mean at the end of the year, I have spent 10% of my income, which is quite a lot. Now, if you’re not doing that, if you don’t see growth, you need to start spending 10% of your income.
Another thing you need to be doing is investing 10% of your income into a long-term wealth building strategy. A perfect example of this is just going to CharlesSchwab.com. This is something that I teach as well. Go to CharlesSchwab.com, you set up a brokerage account. That account automatically gets pulled from your bank account into the investment account, and that account buys the S&P 500, which is the 500 biggest companies in the United States. It’s always the 500 biggest, most profitable companies in the United States. I am buying that consistently bi weekly. I’m investing over 50% of my income, and that’s what you want to be doing. You want to start out with 10% of your income in knowledge, 10% of your income into a long-term wealth building strategy. And you increase that ten percent every three months. You increase that another 10%, and you need to get that investing ratio up to 50% of your income. Once you start hitting 50% of your income, you are going to become financially independent way quicker than you think. So, okay, that’s 20% of your income, 10% into knowledge, 10% into a long-term wealth building strategy.
I like to speculate with at least 5% of my income. It really depends on what my income sources are, but I like to do speculation. So, a great example would be cryptocurrency. Start taking more risks with things. It’s okay to take risks. You have to be willing. Scared money doesn’t make money. If you’ve ever heard that, that’s the truth. Obviously, you want to invest methodically, but start taking a bit more risk. You can’t be scared to take risks. So, that’s 25% of your income right there. Okay, what do you do with the rest of it? You invest the rest of it into yourself and your brand, so into your brand and your business. Just keep investing.
I am hiring a new employee every single week, so I’m trying to scale my current businesses. And what I’m going to do here is I’m focusing on one or two businesses. I’m putting a lot of energy into those businesses, I’m creating systems and processes, and I’m leveraging my employees so that they can run that business, and I can go focus on another stream of income and get that one automated. Focus on another stream of income, get that one automated, and then focus on another stream of income. And while I’m doing that, I’m also investing into other passive income streams on the eCommerce side, taking automation and a lot of stuff. So, that’s what you need to be doing.
So many people don’t get to that level because they’re not building one income stream off of another one. Almost all of my income streams feed off and grow each other. That’s how you grow true wealth, when you have one income stream that builds up another income stream. They’re different businesses, but they’re helping each other grow. That’s how you can become super super wealthy. That’s what the wealthiest people in the world do, and that’s how you become financially independent from Ground Zero. But it all starts with investing in yourself. I’m serious, and I’m not just saying that because one of my businesses sells knowledge. I’m saying that because of where I’ve gotten in such a short amount of time, and all the people that I see that are constantly leveling up. They are leveling up because they are constantly investing into themselves, their brand, and then they’re also investing.
I hope they’re investing. A lot of people don’t, but they should be investing into a long-term wealth building strategy.
There are two rules to money that Warren Buffett talks about: the first rule is, “don’t lose what you already have.” And the second rule is, “don’t forget the first rule.”
So that’s why we put our money when we’re investing our money into something into a different asset that we don’t control. We make sure that it’s first going into something safe that’s proven to work over time. And then you can start speculating on other stuff. You don’t want to lose that money. If you keep losing money, you’re never going to level up. So that’s why we go into something long-term that’s proven to work, like the S&P 500. I can’t stress that enough: invest 10% of your income into knowledge, 10% of your income into a long-term wealth building strategy, and invest all of your excess money into yourself, your brand, and your businesses. Start hiring more people, start scaling your current income streams, and you will get there a lot quicker than you think.
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