The 3 Types Of Financial Freedom

You know how everything these days has tears, you know different levels. Like how you can Netflix can go from $7, $15 all the way up to $20 and there are different benefits obviously.

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1. Baseline Freedom
– In one of my videos I spoke about the Bare Bone Budget
– Its basically is a budget to cover your absolute necessities
– And they are a total of 4 main ones

Necessities :
– Shelter: no More than 33% of your income
– Utilities: Light, water, Gas, Internet and phone bill
– Groceries: $200 per Person except kids because they eat what the parents eats
– Transportation: Paid off car, so just gas, maintenance, and insurance

The goal is simple:
– Make enough from passive income to cover these absolute necessities
– Now you don’t have to live on this budget, but you have to know the numbers
– In case one day you need to tighten things up around the house

For me my baseline currently is about $900 give or take
– That’s $10,800 a year
– My investments make 10-12% profit, I’ll only take 4% so I don’t run out of cash for at least 33 years
– So $10,800/.04 says I need $270,000 I my investment account

Ps. That’s less than the standard deduction so I don’t have to worry about taxes.
2. Surplus Freedom
– All the necessities stay the same but then you add an extra 50% for life enjoyment
– Here one important piece of info, that 50% extra is not going to go towards a more expensive house or things like that, because that’s going to affect our baseline
– So this money can be used for travel, saving up to buy things and so on

Obviously:
– You could save up to buy more house but in a way that doesn’t increase expenses by that much )

SO for me
– $900 plus 50% is about 1,350 total
– That means I need to get $405k in total
– Now that 450 extra is about $5,400 that’s money for vacation, new car savings, and stuff like that

Ps. Keep in mind, this doesn’t need to be your only income, it can just be more. So I can still keep working part time and earn 20k a year for example, and get this extra money I can use it for whatever I want

3. Thriving Freedom
– This is not just about having more money for spending
– But it also having more money for safety
– And having more money for taxes
– So this require 3x your bare bone budget

Why
– Why so much, if you have 3 times more than the money you need in your investment account or with your passive income ideas
– You would have to lose over 200% of your money to make a difference

So in this case
– If I need $900 x3 that’s $2,700
– That’s 32,400 a year and I need an account with $810k
– For me personally if never invest again I would take roughly 13 years to reach this goal
– But I will continue to invest and in the next 5 years God willing I will be able to make $2,682.50 per month not yet $2,700 but close

4. There is a faster way to get to these goals
– Its to basically invest in opportunities that are safe and have a higher return

For example:
– The stock market will easily stick at 4% withdrawal rate so I would need 810k
– But if I did it with real estate and earn 6% then I would need $540k
– Yes 2% is a big difference in the investment world

My plan is to have
– The stock market give me some
– But have the real estate market give me some too
– Plus that creates more diversification

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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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