Six levels of financial freedom, from protecting six months of expenses to reaching absolute freedom. The speaker maps concrete targets like $1M for basic security and shows how a 5% return builds wealth. Use monthly financials and 90-day forecasts to track your progress.
So there's a document, what does financial freedom mean to you? And I want you to spend some time with it. It's again, it's in, it's the last document in business Blueprint tools in your Google Drive. And it's really easy, right? It takes through six levels of financial freedom. And it starts at the basic levels here. 1 and 2 is financial protection and financial security. And so it talks about the necessities of living. Your mortgage payment, your utilities, your transportation, your food, your insurance. For us it's about $4,500 a month. Financial Protection is having six months of your basic living expenses put away. So for us that's $26,700. That's the first level of financial freedom that you should meet is having six months worth of living expenses put away. And then if you were to earn 5% interest on a certain number, critical mass number, to be able to throw off the expenses necessary to live on a basic level. The critical mass for financial security, which is the second financial freedom level, would be about a million bucks. If you had a million bucks invested at 5% rate of return, you'd be able to throw off 53,000 per year and live at a basic level. From there you get to go to financial vitality. So you take the 4450. From here you add in basic entertainment, you add in college education, some clothing and luxury Items. So your 4,450 goes to 6,250 per month or 75,000 per year. If you gross that up at the 5% annual return, you need a critical mass or a liquid amount of cash of 1.5 million. From there you go to financial independence. You take the 6250. To make numbers simple, I just added 3750. So $10,000 per month is 120,000 after tax per year. So your critical mass will be 2.4 million. From there I added 10,000 on top to achieve financial freedom. So at 20,000 per month we could live a pretty kick ass lifestyle. That would mean 4.8 million in the bank. And then we take the 20, we add 20 for absolute financial freedom. If I had an amount of money in the bank that could throw off $40,000 per month that I could spend without taking away from the principal amount. 9.6 million would be that number. It would throw off at 5%, it would throw off $480,000 per year. So this is just a helpful, very simple tool, but a helpful tool for you to realize what you're shooting for, right? So if you have no savings right now, the first goal is to get to financial production. So get six months put away and then beyond there, you're building a critical mass, an amount of money through your automatic wealth building machine to be able to build up these different levels of financial freedom. So that's not, I'm not trying to get preachy on, on you if, if you're not in a good financial position, but your ability to, to, to speak the truth in this area of your life is, is all that matters. So again, lots to sort of take take action on there. But monthly financials, huge marketing ROI is huge. 90 day cash flow forecast is huge. Financial freedom and considering those six levels is huge. Got to take action on these items. Email questions to client care lars headenborg.com.
