What is Financial Freedom
Welcome to REITV. Today we’re gonna be talking about what it actually means to become financially independent. Like, what’s the definition? And how do you do it? and can you get there faster?
So, what is financial freedom? Well I’ve traveled all across the country. I’ve asked tens of thousands of people. You know what they always say? “Well Kris is to buy what you want, and when you want, and how you want.” And you know what? That’s the fluffy answer.
Financial Freedom and Residual Income
So, let’s leverage a more sophisticated and technical definition on what residual income actually is so that you know what the goal is. Financial freedom is a residual income which exceeds your expenses, pretty simple right? If your number is $6,000 a month or $8,000 a month or $3,000 a month. Well you know exactly how much residual income you need to create, to be able to cover whatever your monthly expenses are.
So let me give you an idea of how you can create a residual income for example, through real estate so we could make this pretty concrete. Let me kind of pull up here. On this website, there are some recent deals that I’ve transacted. So, for example, if you take a look at this house in Indianapolis, that’s one of my cash flow markets, and you’ll see there’s an $89,000 house. It rents for $950.00 a month, the payment, interest, the taxes, the insurance are $465.00 which means there’s a monthly cash flow. A net cash flow $379.00 a month, that rate there that is a rocking cash flow. And that’s also pretty standard for what I do. Now, I have other markets that I go into that I talk about and they’re my growth markets, my equity growth markets. So, for example, Orlando, Las Vegas, on these houses they have $199 cash flow, $133 cash flow. When I go into these markets, it’s really for growth, but I still need that positive net cash flow so that I’m getting that HUGE, HUGE potential upside, but I’m still cash-flowing along the way.
Let’s talk about how most Americans actually approach, financial freedom. We get into this fear of debt mode, scarcity; I need to have things paid off. Well, it sounds like a good idea. I have a car payment, if I paid off that $20,000 loan, I would save a $450 month payment. Seems, to make sense, well the $20,000 you put there, I suggest, put it into an asset versus on a liability. What is real estate gonna do for you? Real estate can produce a cash flow that can eventually, not only just address the liability’s monthly payment, but it can actually paid off, and actually leave you an access.
My approach for retirement, eliminating debt, and the reason why I leverage real estate when it comes to financial freedom is that if I am gonna trade dollars for hours initially and work hard and save hard, for heaven’s sakes, don’t throw at your debt. Throw it at assets which can eliminate your debts and actually leave you a surplus to continue investing. And that’s how you get financially free.
From what I’ve just shared with you, I hope maybe now you think financial freedom might be more than living in some penthouse, travelling all across the world, being a multi-millionaire, winning the lotto. Financial freedom really is very simple. It’s about having assets that outweigh the liabilities. It’s where your residuals equal or exceed your expenses. And that’s reality, that’s realistic. That’s something you can do if you have the proper plan and especially, if you have a real estate.