Financial freedom or wealth building is really not about earning a huge salary. It has very little to do with the position you occupy in your organization…….whether you are a janitor, driver, or CEO.
To be honest with you, it has nothing to do with what stuff you possess or how large you live. Living in an upscale area of the city, wearing designer clothes, and driving exotic cars are not what make for financial freedom or wealth building.
How Do I Achieve Financial Freedom?
When most people think of creating wealth, they think of earning more income by working more hours or changing jobs. As awesome and commendable as this step might be, it is good to know that salary is not wealth. And earning a huge salary might not necessarily culminate in wealth accumulation or financial freedom.
The reason is that as an employee, your salary or take-home pay is classified as earned income or active income. Unfortunately, this class of income lacks the tool of leverage, which is a vital key in the process of wealth building.
This lack of leverage is a major drawdown to every attempt at building wealth with earned income. This is because your ability to generate income is tied to your personal time and effort.
This means if you want more money, you have to put in more hours of labor. Unfortunately, there is only so much you can do in 24 hours. And in a case where you couldn’t show up for work as a result of sickness, accident or what have you, you don’t earn.
The good news is there is hope for every employee who desires to build wealth and live in financial freedom if he or she understands what I’m sharing in this article.
Converting Earned Income To Passive Income
As an employee, one critical truth you must know and embrace is that your salary is not an end, but a means to an end. It is not wealth, but a means or tool with which you can build your wealth.
You can indeed leverage your salary to build wealth. But to do this effectively and profitably, you must learn to convert your Earned Income to Passive Income.
This is the one crucial thing you MUST as a matter of necessity do to create wealth and live in financial freedom as an employee.
Earned income is any income that is generated by actively working a job. This class of income requires you to actively perform or take part in work before you earn.
While Passive Income is money, you generate on a regular basis from your assets. It is an income stream that is earned passively, with little or no ongoing effort from the recipient of the income. It is primarily generated from your investment of money or effort in income-generating assets.
A great part of financial intelligence that unfortunately is missing in the wealth-building strategies of many people is the ability to convert earned income to passive income through the purchase of income-generating assets.
King Solomon, one of the wisest and richest kings that ever lived, said, “The slothful man roasteth not that which he took in hunting: but the substance of a diligent man is precious.”
Many people are good at generating earned income, which is a product of their personal effort; sadly, that is where it all ends. They lack the necessary skills and strategies to convert earned income to passive income.
Please understand this, every employee can indeed leverage their salary to create wealth and live in financial freedom. And this is what you must do to live in financial freedom.
But first, you need to know that your financial freedom is in your ability to convert your earned income to passive income.
It is therefore imperative for you to learn how to process or convert your earned income to passive income through the acquisition of assets that generate income.
Please know this: wealth acquisition is ALL about assets acquisition.
And an asset is simply anything that puts money into your pocket. While the antonym of it is a liability, that is anything that takes money away from you.
Generally, assets can either be bought or created. Entrepreneurs basically create assets in form of businesses.
But as an employee, your goal should be to discipline yourself to save a part of your salary for the purchase of income-generating assets.
To create wealth and be financially free, this is the one thing you must do: you must direct all your efforts and energy to acquiring assets that will generate enough passive income for you to live in financial freedom.
Wealth building is all about building a fortress of income-generating assets. You should build your portfolio of assets to the point where the passive income it generates for you is enough to cover your living expenses.
It is at such a point when the passive income from your assets is equal to or greater than your living expenses that you are financially free.
Financial freedom is the goal and task before you. And building a fortress of assets is your guaranteed access to it…..the one thing you MUST do.
It’s your turn to enjoy financial freedom.
To Your Prosperity
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