What is financial freedom?

I’m sure there are as many definitions as there are people, but here’s mine.

“I will be financially free when I don’t have to rely on anyone else for money.”

Keep in mind, that includes a JOB. That is the ultimate tight rope walk. Making sure that you keep the boss happy so he keeps paying you. Now don’t get me wrong, there are many people who love their jobs and are quite content with trading their time for a paycheck. More than likely none of them are reading this right now.

Also factored into the equation is the difference between bills and expenses. I define bills as an amount owed, with a balance, that will someday be paid. A bill would be a car payment, mortgage payment, student loan, or anything with a payment schedule. You could also refer to these as debts, but that sounds so depressing.

Now an expense is an ongoing cost with no balance like utilities, phone, groceries, etc. Expenses can change their source but they are simply the cost of living.

So how do we become financially free? Well there are at least two methods. First of all, to be truly free we have to get to the point where we owe no one a balance. Everything is paid off and we are debt free. Then we could work to amass enough money so that without touching the principal it could meet our ongoing expenses.

Let’s take a closer look at this method. Let’s assume that all of our debts/bills are paid and we are left with our monthly expenses. This includes travel, and gadgets, and clothes, and everything we do on a monthly basis to live but without incurring any new debt.

Let’s pick a number, say…$5,000 a month. It could be a lot less or a lot more, we’re just making a point.

Now let’s pick a rate of interest, say 5%.

Okay, $5,000 a month x’s 12 months is $60,000/year. So how much money would we have invested to generate the 60 grand?

1.2 Million Dollars

That’s right….that’s a ton of money. So how much do you have set back? Yeah, that’s the way it is with most of America and most of the world.

I’m not going to try and bore you with a lot of statistics, or horror stories, because you know better than I do how your own personal economy is. So how are we going to amass this mountain of money? Let’s see…spread over 10 years that’s $10,000 a month. 20 years it’s $5,000 a month… Can you afford to set back $5,000 a month for the next 20 years?

Now there are things such as compounding interest and letting your money work for you, but recent events in the stock market show that it may not always work.

So what’s another approach? We can build a money machine. There are several ways to do that. We can open a business, and fill the building with inventory, hire employees, spend money on advertising…in other words put our money at risk in the hope that we will build a money generator. That’s what a business is after all…a means to generate money.

A franchise will give us a better chance of survival, but generally speaking we have to put more money at risk. In fact that’s one of the reasons franchises have a higher survival rate. Most new business owners don’t go in with enough capital to last long enough to achieve success.

So where am I going with this?

Right. Network marketing. I know, it’s not for everyone. In fact just like tradtional business, most people will fail at network marketing. Why? Well, a number of reasons, that I won’t get into here, but suffice it to say, generally it’s because they don’t have the necessary skills to succeed.

So let’s do some more math. Let’s say we get going with a solid MLM/Network Marketing company and after a year we’re earning $500 a month. That’s $6,000 a year…or like having $120,000 invested earning 5% interest. Hmmm

Okay, fast forward another year. We’re making $1,000 a month…still keeping our JOB, but now we’re up to $12,000 a year…or like having $240,000 invested….okay you know the drill.

We can’t look at this like we would a job. With a job we’re trading time for money. With a business we’re building a network of people or a distribution network that will generate perpetual cash flow. That’s powerful.

Now it’s five years in the future and we’re earning $5,000 a month…$60,000 a year….like having 1.2 million dollars in the bank earning 5% interest.

Which is more doable? Amassing 1.2 million dollars over the next 5 years or learning the skills to build a business that will earn you the financial equivalent.

Let me state this for the record. If you’re earning $5,000 or more a month from a business, be it MLM or traditional, you’re in essence a millionaire.

So how do you succeed in network marketing?

1) Acknowledge that it’s not easy. It’s work, and it requires skill.

2) Determine your personal criteria for what type of product you could get excited about, but also stay committed to for the long haul. Recognize that to build residual income your product MUST be consumable. Don’t let someone convince you otherwise.

3) Use the product…like the product…love the product…tell everyone you know about it. (wrong)

4) To be successful in todays market the trend is toward what’s being called “attraction marketing”. It’s putting yourself and your product out there in such a way that people will be coming to you and wanting to be a part of what you’re doing. In fact, it’s always been that way. Only talk to the people that want to listen.

So let’s wrap up.

You have some choices to make. Keep on doing what you’ve been doing, and you’ll keep on getting what you’ve been getting. If you’ve amassed your retirement nest egg…more power to you. If not…what’s your plan? Will Social Security and your pension be enough? Should you roll the dice and take what you’ve got set back and start up a tradtional business? Should you take the plunge and give network marketing a try for the first time…or the 20th time?

Only you can decide.