A Full Guide to Financial Freedom | Passive income

Financial freedom is one of the most important things, it means you don’t have to worry about money.

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1. Debt Freedom: Save a $1000, Build habits and get of debt fast | Side Hustles and frugal living

Step By step
– You have to Save $1000 for emergencies plus 1% of income every Paycheck ( Murphies Law: it’s whatever can go wrong will go wrong, so I want to make sure that you have cash on hand for emergencies first ) – keep money separate, I recommend wealth front

– Invest 1% of your Income automatically: Roth Ira, 401k, or normal taxable account ( set up automatically, I have full videos on how I invest) – I have this set up with m1 finance

– Paying off Debt 26-46% of all of your money: eliminate all debt except mortgage if you have one ( credit card yes, student loans yes, personal loans yes and business debt yes, car note ) – using the avalanche method ( this took me 6-12 months: because I caught early, but this could take you up to 7 years, so sometimes you just want to sell your car, and sell things you don’t need to pay it off a lot faster)

– Expenses 50-70%: this is frugal living, everything you don’t need, needs to be cut out ( bare necessities )

– Fun 1%: Use this money to build the habit of a budget just for fun, eventually it’ll go from this.

– Charity 1%: Share the meal is my favorite Charity, and its an app and it allows you to donate automatically whatever you want

Tip: if you invest instead of paying debt, the interest on the debt, minus the taxes and fees on your investment average out, so you are not building any wealth at all. ( if you have to use 1k for emergencies, pause everything and rebuild it up )

2. Wealth Building section: Fully funded Emergency fund, More investing, More fun

Step by Step

Emergencies: $1000+ 10- 20% of your income in building a 3-6 month emergency fund ( however you feel best, I have a 12-month one currently, but I highly recommend a 6 month one ) –

Investment: Investing 10-20% ( max out Roth ira, contribution match with the employer and the rest into a taxable account )

Debt Payment is 0%: at this current point

Expenses: 50-70% ( don’t increase them because you’re debt-free yet )

Fun: raised to 5% ( this now means eating out, buying stuff on amazon, and having a little fun )

Charity: 1%

Tip: you’re are done with this section once you have fully built an emergency account of 6 months. ( might take 6 Month-12 months to build )

3. Freedom Section: Where we Pay our house off or buy one, Save for kids College and keep Investing

Emergencies: 0% ( you have a fully funded account in Wealthfront for 6 months)

Investment: Increase to 20% you and 5% kids ( total of 25% ): I recommend getting a 529 investment account for kids if you plan on having them

Debt: 15% goes towards your mortgage extra money ( or down payment )

Expenses: 54-59% ( you have to be more frugal)

Fun 5% ( stays at 5%)

Charity: 1%

Tip: you’re done here when you’re house is fully paid off, and by putting in that 15% extra that means in 7-10 years you will be done.

4. Auto Pilot
– Emergencies: 0%
– Investment: 20% you and 5% kids
– Debt: 0% ( you own your home)
– Expenses: Can be 64% or 54% ( but remember you have no mortgage so it’s a lot of money) – remodel a kitchen, get that new car you want for cash obviously
– Fun Increase 10% ( big baller club)
– Charity: 1 or 10%

Tip: now it’s obvious that by yourself this plan takes a lot of time, unless you have a massive income. But if you married and combined income ( you could be done 7 years flat ) imagine being 30 and being 37 and fully free.

Video on Investing: https://www.youtube.com/watch?v=kWwhJ0Oos2c
Video on Avalanche: https://www.youtube.com/watch?v=IexrSHRSl6I

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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