Cover The Rice Beans Operation or Financial Security And Then Achieve Your Independence
Security , independence and financial freedom are closely related because financial security is the first step and financial independence is the second to which you should aspire as flying goals on your path to financial freedom.
If you are on the path, it is very important to know the phases and in a certain way it is a peace of mind to know that you can achieve it in “steps”, conquering one goal at a time.
In this blog post we want to clarify the difference between financial security and financial independence and show you the importance of each of these two phases, so let's start by answering some key questions.
What is financial independence?
It is achieved when a person's passive income covers their current lifestyle.
Now, in what was described above it is important to describe a couple of concepts:
Passive income: these are amounts that are received without having to work or exchanging your time for money . Compensations received when working as salary or professional services are commonly known as active income.
Current lifestyle: Here we refer to monthly expenses, annual expenses, other expenses and savings to invest and spend as usual. If when you achieve financial independence you decide to buy a yacht and a helicopter that you previously did not have, it is very likely that you will have to go back to work until you build new passive income that covers the new costs of your new standard of living.
It should be noted that several of the passive incomes began and for a time were active incomes until a system was created and they transformed them into passive ones with the great advantage that you can have several without having to work more hours.
Some examples of passive income are:
1. Create a business: a person creates a business , hires another person or people to manage it and receives profits from it without being the one to do the work.
2. Receive commissions: annuity payment renewals, medical and life insurance.
3. Income from subscriptions: receive monthly income from products or services.
4. Network Marketing Development: Receive a percentage of sales from people below your line.
5. Receive returns: interest on investments (for example, on private money loans secured by a first degree mortgage).
6. Rental income : monthly amount for something that is yours and that generates value for another person while they use it (as long as it is systematized or managed by someone else).
And what is financial security?
Financial security is achieved when your passive income covers your most basic lifestyle…. The day-to-day “rice-beans operation.”
Monthly passive income is a much lower number than financial independence and therefore, it should always be your first goal to achieve since it only takes into account 4 categories:
Housing: refers to the rent or mortgage of where you live, in addition to the condominium fee if applicable and basic public services such as water, electricity and internet.
Transportation: bus tickets or monthly Uber expenses, taxis or car gasoline and payment of the loan in addition to the seal and RTV depending on the way the person transports themselves.
Food: only the supermarket and farmer's fair.
Basic entertainment: Netflix.
Typically financial security represents between one-third to 50% of the financial independence number.
This makes it highly achievable and gives a lot of peace of mind to the person who manages to achieve it.
Is it important for people to achieve financial security as soon as possible?
Yes, it is essential! We explain a little here; In our experience with hundreds of students, we have seen it all. The truth is that life happens, and so do surprises and unexpected situations, no one imagines being in a situation until they are in it.
If a difficult situation arises, if your finances are in order you don't even have to think about money , and that is a great relief.
It is no secret to anyone that during the last year and a half many people had their income affected due to dismissal, suspension of the employment contract, reduction of working hours, less or zero sales in their business, even bankruptcy of their business...
In situations like the above, there is a huge difference for the person and the family if the expenses for housing, food, transportation and basic entertainment are covered indefinitely.
For example, some of our students tell us that in 2020, the main provider for the family or the only person who brings in money had to stop working for a long time...
2020 is now a good example (although not the only one because there are many reasons that could make it impossible for someone to bring active income into their home), but 5 years ago when these Liber graduates began to take action to make their “rice operation” -beans” from day to day were covered by passive income independent of their employment, 2020 was something very difficult to imagine.
In fact, many of our graduates wrote to us at the beginning of the pandemic, thanking us for the education because by putting it into action, several had their financial security already covered and having seen themselves without generating income for several months, they did not fall below zero, they were already prepared!!
Clearly it is not ideal to live in “ financial security ” mode but once you achieve this; You already have the most important thing covered!!!
Where to start?
Our proposal; educating yourself more and more!
Well, we are delighted that you are here, and we want to share with you more of the proven tools we know so that you can achieve that security and live a much calmer life.
In fact, that's why we created the Financultura Masterkit Financial Freedom program that guides you through the 7 steps to achieve financial freedom and, of course, covers the process so that you achieve financial security and independence along the way.
Our goal is that you can eventually stop exchanging time for money, be the tool to shorten that learning curve and achieve your goals in less time.
And that is why we invite you to apply for the Masterkit program.
How do you apply?
By clicking on the button below you will be able to schedule a call with our team whose intention is for you to clarify any questions you may have regarding the program, get to know you better and recommend what is most beneficial for you at this moment in your life.
