Two Ways to Achieve Financial Freedom

Today, I will tackle about the two ways to achieve financial freedom. Achieving financial freedom is one of the goals that a lot of people want. Who else does not want to enjoy their lives to the fullest without having to worry where to get their day to day meals? Who else does not want to spend their time with their loved ones without the stress that work brings?

In my journey towards financial freedom, I learned two ways on how to achieve it. I am not saying that I already achieved financial freedom but here are the two lessons I learned on how to move out from the rat race to the fast track that Robert Kiyosaki discussed in his famous book Rich Dad Poor Dad.

Generate passive income. Probably the most important but the hardest way to achieve financial freedom is to build assets that will generate passive income. In one of my articles before, I discussed several sources of passive income. It can be from a real estate investment; the royalty fees from a franchise, a music album, and other intellectual properties; stock dividends, interests income from simple investments, etc.

For you to move out from the rat race, you must build assets that will work for you to put money inside your pocket. As Kiyosaki said, assets are anything of value that puts money into our pocket. In contrast, liabilities are anything that drains money from our pocket. Some of us buy liabilities we thought are assets. You must be careful though in determining which are assets and which are liabilities among the things you buy.

However, this is not to say that you should deprive yourself with some of your wants. The very idea of building assets is to generate passive income enough to buy both your wants and needs. As soon as you built enough income generating assets, then you can enjoy the rest of your life with vacations, leisure, and some other forms of luxury and enjoyment. Be careful though not to spend too much to the point of disposing those passive income generating assets to fund your wants. In order to successfully do this, you must learn about financial intelligence.

Earn more and desire less. You may have probably heard this phrase since I already tackled it before. “Earn more and desire less” is the ultimate heart of frugality. In Filipino, “Ubus ubos biyaya, bukas ay nakatunganga.” No matter how much you’re earning, if you’re not spending it wisely to buy assets that will generate passive income, then your expenses are not worthwhile. Unless you’re one of the richest persons on Earth like Bill Gates and Warren Buffett, there is a possiblity that your source of income will dry out and you’re not prepared when that happens.

In addition, I’ve learned from personal finance educator Francisco Colayco that your future is the most important expense. Therefore, you must then prepare and save for that particular expense.

Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

11 responses on “Two Ways to Achieve Financial Freedom

  1. Nice post Tyrone. I’m also looking at generative passive income by become a true business owner. in real estate investing for example, my teammates and I are looking at turning it into a business we own that thrives without the business owners working in the business, thus the earnings become passive income. If we don’t setup the business this way, we would just own our jobs, not a business.

  2. Rich Dad, Poor Dad was definitely an eye opener for me. Before I read the book I had no idea what passive income was… I also didn’t have any idea what an asset should be and how an investment doesn’t necessarily become an asset.

    One word of advice with reading Rich Dad, Poor Dad though… You might loose interest on your job. Keep your job, start a part-time business and buy assets from the money you generate from that business.

  3. Passive income will happen if you build a B-type of business.
    From Robert Kiyosaki’s Cashflow Quadrant, a B business is ran and leveraged through systems and team of people working for the business. So you don’t need to work for money. The business will be the one working for you.

    @samuel, it’s possible if you can leverage on a business vehicle that allows you to earn as fast as 2-3 years.
    But if you start from scratch, you’ll be starting from the S quadrant. You need to build a system and form a team of people. The question is how long can you do it? And how much you can stand the requirements of building a B type of business from scratch?


  4. Nice post tyrone, for now my only passive income are my blogs.
    2 weeks ago, I joint venture with my friend in food franchise. so far so good, ROI looks promising, We foresee a 1 year ROI but it looks like we can get it in less than a year. I think this the start of my Journey going to B side.

    I still have a day job 🙂

  5. Thanks for this post bro!

    Indeed passive income is something that should be desired by everyone. In reality only 3% of the population really desire to have this because most don’t even realize this is possible. Generally, people think that one has to work in order to earn! That’s something that I myself believed in until I read the books of Robert Kiyosaki and many other financial mentors.:)

    Thanks again bro.

    Bryan Uy

  6. Hey Tyrone,

    Yes those are 2 ways of achieving financial freedom, but sadly you have to devote time and a lot of thinking, especially in passive income, where I can agree with you, it’s the hardest one to get. You never know if you’ll win or lose.
    Also, I always hear ”Earn more and desire less from my grand grand mother” , if a woman as old as her tells me that, I can not help it just to believe her. And regarding money, people must try to be penny-wise.

  7. I tried many times to earn using passive income like accepting farms from people who need money. I let them borrowed my money in return I will earn the income of their coconuts. It is a good investment though but maybe they will return my money this year.

    I bought a residential land and has a cottage for rent but this one need you to be there because the caretaker might take the rental fee. At least I tried but another thing that we can do is plant trees if you have a big parcel of idled land after 8 years it is a big money.

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