Achieving Financial Freedom

Achieving financial freedom does not necessarily mean being debt free, although that is a great goal.

It means that you have enough money coming in from multiple sources to completely cover your monthly expenses, including paying yourself (savings) while maintaining the lifestyle that you desire.

Most people can achieve financial freedom by creating and building multiple streams of income for themselves.

Multiple Streams of Income

They are referring to a variety of ways in which people generate new money and work towards achieving financial freedom.

Multiple streams of income could consist of any or all of the following:

• active or earned income
• investment income
• residual income
• leveraged income

Active or Earned Income

This includes income from an employer - salaries, wages, tips, sales commissions. It also includes consulting fees where you may contract out your services to other businesses, and income from owning a small business that you specifically operate on a regular basis.

Some people rely on their active stream of income as their sole stream of income.

It gives them a sense of financial security because they view it as a guaranteed source of income.

This means that as long as they go to work each week their employer will continue to pay them each week.

But what happens to their active stream of income if something happens to their employer? Or, what happens to their active income, if something happens to them?

While an active stream of income is very important, it shouldn’t be a person’s only stream of income.

Investment Income

This is income from your investments, including interest, dividends and capital gains.

Residual Income

Residual Income is income that you earn whether you work or not. It is income that continues to flow 24x7, while you sleep or lie on the beach or work in your office. An ideal scenario is having residual income that you can continue to generate even in your retirement years.

Residual income is income you receive for something you once did, and you continue to receive additional income long after completion.

There are many ways to generate residual income.

Some excellent examples are:

Writing A Book

You write a book. The publisher pays you upfront for your book. Then as your book becomes a best seller you receive ongoing income from the royalties of the book. This is an idea that many people overlook because they think that they are not capable of writing a book.

But you know what? Everyone has at least one book within them! It may be your life story, it may be a children's book, or it may be a fictional novel.

A great way to get inspired and to help you get started, is to go to your local bookstore and take a look through the books that people have already written. I bet you will find lots and lots of ideas on what to write about.

Internet Business

You can create and build your own website or blog or Lens. In the beginning you will need to work hard to setup your internet business, but once it is up and generating lots of incoming traffic and money, you may not need to work on it on a daily basis.

That is when the income that it generates will become residual income.

A New Business Venture

Purchase several small businesses (including franchises) that do not require your direct involvement on a regular basis. In many instances people own several businesses and hire employees to operate and manage them on a daily basis.

A short list of examples includes a house cleaning business, dry cleaning business, florist, bakery, coffee shop, fast food chains, etc.

Commercial or Residential Rental Properties

Purchase properties that you can rent to others. Typically a person will purchase a commercial building and use a small portion of it for their own business and rent the rest of the space to other businesses. This may generate a nice residual monthly income.

Network Marketing

You become a Distributor in a network marketing business that sells consumable products.

Initially you will be involved in setting up your business and selling the products to clients.

However, once your clients use and like the products, they will continue to purchase them on a regular basis and you will receive residual income for as long as they continue to buy them.

Leveraged Income

Leveraged income is power. It is the power that people use to become wealthy.

Why is it power? It is power because leveraged income is when you leverage the work of other people to create income for yourself.

A CEO of a corporation is a great example of this. They leverage the work of all of their employees to generate an income for themselves.

The key is that you are making money off of other people's labor, as well as your own.

Another great example is the income derived from a network marketing\direct selling business that sells consumable products.

Consumable products encourage repeat sales with little to no work on your part.

By adding other distributors to your team that also sell the products, you create leveraged income that will eventually also become residual income, because your clients and the clients of your distributors will continue to buy the products.

He understood this concept of leverage.

Use any of the above ideas to begin creating and building multiple streams of income for yourself so that you can be well on your way to achieving financial freedom.