Financial freedom is the hidden want of every person on earth. Poverty is not as bad as death but I would prefer to die than to remain poor for the rest of my life. This is because I grew up in absolute poverty.
The first level of poverty
While we could afford to eat three meals almost every day, I can remember days when we slept without eating. We could not afford decent clothes and shoes.
I grew up with a big gap between my front teeth and I hated myself for it. I was victimized by my high school mates.
This is how I lost confidence and my sense of humanity. I lived for years with just one shirt and one pair of trousers. All this is because we were poor. This is the first level of poverty. Financial freedom is very far from this level.
This is why I hate poverty. I have tasted its fruits for many years and I can attest that they are not sweet at all. For this, I made a decision that I will never be poor in life. I will be rich or I will die trying. For everything my parents and I had gone through, I could not live in the same house with poverty.
Unfortunately, many people are comfortable living in poverty. They are never tired of being sick and tired. They have made peace with what they are supposed to resist forcefully and eject from their lives.
Instead of working to change the situation, they give themselves excuses. Excuses and poverty are close relatives. They love each other. If you love excuses, you do not have to love poverty; it will come automatically.
The second level of poverty
Although your situation may not be as bad as mine was, you are still missing much from life if you are poor. Money gives people options. Poverty makes people slaves of circumstances.
You cannot eat what you want, drive what you want, or even travel to your favorite holiday destination when you are poor. You have to consume what is available other than what you want.
Many people are only able to afford basic needs and that’s all. They can put food on the table, pay their rent, and dress well. After they have sorted these basic needs, they ran out of cash.
This is called the rat race. It is a situation where your income is equal or less than your expenses. In this situation, you work to pay bills. This is also a glorified form of poverty. It is the second level of poverty.
The third level of poverty
Other people have a good house and a nice car but that is all they have. They have a big job that they use to pay for their mortgage, educate children, fuel the car, and go on holiday once in a while.
They have no assets or another source of income. If they lose their job, they can no longer meet their immediate needs. Their house and car will be auctioned.
The wife will run away and the kids will have to go to a free public school. This is the poverty that is with the middle class. It is the third level of poverty.
On the third level, people appear to have financial freedom though they are poor. It is very dangerous because everybody (Including them) thinks that they are rich.
They have a bloated ego and they think that they are doing well in life. When they are retrenched and they lose their job, they get into depression because they can no longer sustain their lifestyle.
No matter which level of poverty a person is in, it is still poverty. The common factor is that you are not financially free.
Wealth is not measured by your ability to meet your basic needs or by where you live but by the number of valuable income-generating assets that you have. This is crucial.
There are only 3 reasons why people remain poor_ just three of them. If you can avoid these three reasons, you can definitely kiss poverty goodbye.
- Not making enough money
- Spending more than they should
- Poor or no investment
We can mitigate these factors by doing just the opposite
Step 1. Make more money
Many people do not make enough every month to make them financial freedom. For you to get a level of financial freedom, you have to make enough money and use it as seed capital to financial abundance.
Many employees are underpaid. Unfortunately, they are paid just enough to keep them alive. This is why no one gets financial freedom as an employee. Needless to say, employers pay employees just enough not to resign.
Even if you may not quit your job, you can start a side hustle and have extra income. You can subsidize the inadequacy of your salary by getting another source of income.
Financial freedom requires one to have multiple sources of income (MSIs). After you have developed your MSIs to a certain level, you can confidently quit your job and focus on growing your income without having to depend on a job.
Step 2. Check your expenses
People who get financial freedom are frugal. They know how to delay gratification. Such people live below their means. They do not make money and then use it to entertain themselves or show off. This is the character of poor people.
Make sure that you spend less than 30% of your income if not less. This will leave 70% as savings to invest. Therefore, never save to save, always save to invest.
If your expenses are high, trim them and start walking into financial freedom. What is the logic in eating everything today and having to work all your life?
Why not sacrifice for a few years and live the rest of the years in abundance? (Read our article on prudent expenditure for financial growth to learn more).
Step 3. Invest
This is surely a critical step. This is what people who never get financial freedom don’t do. They just save for retirement instead of investing.
After many years of saving, inflation has eaten away most of their savings making them even poorer.
After you have made more money and reduced your expenditure, this is the last step. Keep investing in good projects. These projects will bring you financial freedom.
The secret is to keep getting assets. These assets have to be income-generating assets and not liabilities in the name of assets.
However, If the assets do not bring you cash every month, they should appreciate in value. To learn more, visit our personal finance category and learn more.
If you follow these three simple steps, you will accumulate more than you can ever think of. Financial freedom will become your portion.
Do not live in poverty again, you are more than that. There is a life of abundance waiting for you. If you have any problem on your financial journey, contact us and we will gladly help you freely. After all, this is why we are here.
Founder/ C.E.O- Wealthy Wolves Consulting & Giimark Ltd/ Best-selling Author/ Speaker.