Freedom Financial Roadmap: The Final Destination 2 Hidden ...

Financial Freedom is thought of as the coveted holy grail of financial well-being and rightly Sun Who would not want to be in a position to exercise the choice of being financially free enough to never have to work again to earn money? Sounds good to me anyway!

Now, if I asked you to quickly write down on the back of a napkin how much money you?d figure you?d need to be totally financially free, it would be fascinating to see what number you?d come up with. It?s actually a pretty tough exercise for most people to do with any level of accuracy. Not to worry, help is at hand with this 5 minute formula

In a previous article, we used this 5 minute formula to work out the exact sum of money you?d need to reach the first three destinations on the road to wealth creation first Financial Protection, 2nd Financial Security and; 3 Financial Independence). Here we?re going work out exactly how much money you?d need to reach the final destination 2: Financial Freedom and then just for the hell of it, Absolute Financial Freedom. Here goes, hang on to your hat!

1 Financial Freedom

You will have achieved it when you have accumulated a sufficient critical mass of capital to provide enough income for you to live the lifestyle you desire (accounting for inflation) without ever having to work again for the rest of your life. The keyword here is ?desire?. This is what differentiates being financially free from being financially independent, Which is defined more by what you ?require? to live reasonably comfortably.

In essence, this would include having and enjoying all the luxuries in life as seeking :
Second Home in the Sun ($ 700,000) ? $ 3, 500/month
35 Foot Boat ($ 150,000) ? $ 1,500 / month
Mercedes Benz ($ 100,000) ? $ 1,000 / month
1 Luxury Holiday ($ 12,000) ? $ 1,000 / month
Harley Davidson ($ 20,000) ? $ 400/month unearned monthly income

The additional needed for these luxuries comes to $ 7.400 / month ie $ 88.800 / annum. Therefore the total cost of being financially free is the $ 51 figure 600/annum needed to Achieve Financial Independence (which we worked out in a previous article) PLUS additional $ 88.800 / $ 140.400 = annum / annum

Again, using the benchmark of an annual 8% return on investment would mean you?d need a critical mass of Therefore capital amounting to $ 1 755 000 in order to be financially free. So, as you can see it?s a decent sum of money but I believe within the realms of possibility for anyone who sets about Achieving it and re-thinking their approach to income generation and financial planning.

second Absolute Financial Freedom

When you think absolute financial freedom, think totally rock star lifestyle! You can pretty much remove any financial limitations and pick up your air guitar for this one!

You will have achieved this level finance when you can pretty much do whatever you want, with whomever you want, as much as you want -. without ever having to worry about money or work again

So, assuming we?d like to keep quiet everything we have / do from our list, we now add all the new items we dream capital ?d love to have that are not in our previous list. For example:

35 Yacht ($ 500,000) ? $ 5, 000/month
Ferrari Testa Rossa ($ 250,000) ? $ 2, 500/month
Piper Cherokee 140 or 172 Cesna private plans ($ 30,000) ? $ 3000/month
Own desert Iceland ($ 7,000,000) ? $ 14,000 / month unearned income monthly

Additional needed for these sweets dream comes to $ 21.800 / month ie $ 261.600 / annum. Therefore the total cost of absolute financial freedom is the $ 140, 400/annum needed to Achieve Financial Freedom at PLUS additional $ 261.600 / annum = $ 402,000 / annum

Again using, at 8% annual return on investment would mean you?d need a critical mass of capital amounting to $ 5, 025 000. So, by today?s standards it?s a very significant sum of money / capital. In order to have built up this level of personal wealth, you most likely will have become a business owner noteworthy and quite a sophisticated investor ie you?ll be a total money mastercard

Conclusion

So, there you have it! Absolute Financial Freedom Financial Freedom and defined in terms of an absolute sum of money required each year. So now you know EXACTLY what it?s gonna take for you to eventually quit working for money and finally have money working for you, to escape the daily grind and retire to Margaritaville ? should you want to! Check out my other articles on Personal Finance, Business and Wealth Creation tips to help you reach the finish line financial freedom ? almost!

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Source: http://www.lovefinanceinfo.com/2012/03/freedom-financial-roadmap-the-final-destination-2-hidden-revealed-5-minute-formula/?utm_source=rss&utm_medium=rss&utm_campaign=freedom-financial-roadmap-the-final-destination-2-hidden-revealed-5-minute-formula

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