What is financial freedom and how to achieve it?

Having money and free time to spend on what we like, or simply to live quietly, seems to be something that is not very well related, and there are a few who have the privilege of enjoying that liberty. What if we told you that it's not something unattainable? Who hasn't ever heard of the financial freedom? A term that gained great popularity in the late 90s as a result of the famous book”Rich dad, poor dad“by Robert Kiyosaki, which we highly recommend that you read.

In case you haven't heard about this concept or it hasn't been clear to you, let's see what financial freedom is.

What is financial freedom?

La financial freedom It does not have a single definition, but all of them agree that it is the ability of a person to meet their economic needs without carrying out any type of work activity. In other words, that income that does not depend on your work activity, also called passive income, are sufficient to cover all your expenses.

Los passive income are those that do not require an activity to receive them from the beneficiary. That is, the income you receive without sacrificing your time to get it.

From what you may have deduced, the financial freedom It is not so related to a high level of income, but rather it is based on wealth over time.

Foundations of Financial Freedom

As you can understand, the financial freedom It is not a state that can be reached overnight, you have to build it over time, but the sooner you start the sooner you will achieve your goal. That objective should be stop relying on active income to maintain your standard of living.

In addition to the passive income It is also necessary to have a savings base, in fact, this would be the formula for simplified financial freedom:

Savings + Income > Fixed expenses needed to live

Types of Financial Freedom

As we have mentioned, the state of financial freedom It is one that is reached over time, and until we reach that dream we go through other stages that bring us closer to that goal. At some of these stages you are very likely to already find yourself, so you are getting closer to being financially free.

• Financial security: Reaching this phase means overcoming the uncertainty of making ends meet and, in addition, achieving a “cushion” of security savings. At this stage, the person is able to cover basic expenses with their funds, but without allowing them to leave work.
• Financial independence: At this stage, both stable income and savings grow, thanks to this, the person will be able to allocate part of that capital to something beyond financial survival, for example, going out to dinner, buying a whim, etc.
• Financial Freedom: This is the icing on the cake. This stage involves having a level of savings and passive income that covers fixed and extraordinary expenses.

Although we have drawn some limits for the different stages of financial freedom, it is true that since it is a concept of free interpretation, it may be that for some people the financial freedom, and not for others, even being the same situation.

Don't give me problems, give me solutions

This is all very good, but what's the point of explaining all this to you if we don't help you in the process? As you already know since Reental we always love to accompany you in the processes towards your financial freedom.

The truth is that throughout this article we have already given you some clues on how to achieve financial freedom, that's right, we're talking about the passive income. Earning passive income is necessary to achieve financial freedom, and the truth is that there are many sources through which you could obtain this type of income.

As you might be imagining, we refer to How to earn passive income by investing in real estate. Although you may think that for invest in real estate and live for rent is available to very few, the truth is that thanks to Reental You can invest in the real estate sector on your own 100€.

The good thing about this investment is that you're investing in real estate, that is, in a safe haven asset. In addition to that, the investor perceives monthly returns, What does it mean that you would be Entering money every month, as if it were a salary, of course, Without working. And finally, Reental It takes the whole tedious process inside the real estate sector, so you just have to invest and enjoy your time.

What are you waiting for?

In order not to miss any of the opportunities we present, we recommend that you join our group of Discord or Telegram To get to know others Reentels and the whole team. Of course we invite you to take a look at our articles on the blog to continue informing you.

Welcome to the new way of doing finance, welcome to Reental.