How To Set Your Financial Freedom Target
To win the game of money you need a clear target. If you’re not keeping score it’s impossible to win. Today, we are teaching you how to define and set your financial freedom target. This is such an important topic because it sets the stage for your gameplan.
Ryan, Brad, and Jimmy were inspired to come up with what they call the “strike number” partly due to a book they read entitled, Atlas Shrugged by Ayn Rand. The concept they came up with is based on the idea of what would happen if producers who are giving value to the economy suddenly stopped production and switched gears.
In Cashflow Tactics we regularly say that the path to financial freedom is cash flow that is greater than expenses. This ideology is in direct opposition from the majority of the financial world. Most discussions determine success based on net worth but we take a more active approach.
To develop your strike number, you have to determine what it would take to go on strike. What does this mean, exactly? It means understanding what financial freedom means to you from a numerical standpoint. It is the calculation of what you need in spendable money in order to survive. We’re not basing our numbers off of gross income.
Your strike number is how we separate a game plan into manageable and actionable pieces.
What Is A Strike Number
Plain and simple, your strike number is the exact number you need to cover the bare minimum while still maintaining your lifestyle. The great thing about a target is that it is something you can track, measure, and define. Unlike traditional finance tactics, this method keeps you on the frontlines of your game plan. You have the freedom of knowing what is going on every step of the way.
Once you know your target, you are no longer indebted to the process of trading time for money. It doesn’t mean that you have to quit your day job right away but it is an avenue to freedom.
Happiness is never found in a thing, a purchase, or a product.- Ryan D. Lee
How To Develop An Income That Is Tax Free
For any traditional worker, tax season is going to really hurt your income. You will lose between forty to sixty percent of your income on taxes alone. We don’t believe that it’s a worthwhile cost so we developed a way around it.
Once you eliminate the issue of taxes the target needed for income becomes much more achievable. Our aim is to help you make your income spendable money. That is how you get onto a fast track toward financial freedom.
The real estate game is the vessel we use and promote to create an income that is tax free. It is an industry that allows you to set a financial freedom target and decide on a game plan that will get you there.
Freedom is about maximizing your potential. – Ryan D. Lee
The great thing about your day job is that it is your means towards your target number. It doesn’t have to be a forever thing but it can shed light on what your next steps need to be.
The No BS Science Approach To Defining Your Target
First, you have to ask yourself a question. How much money would you need to replace the minimum viable product of your lifestyle?
To get the answer to that question you must know what your total expenses are, what you’re spending now, and the bare minimum amount you need to get by.
If you’re following our gameplan, then your strike number will be the first one that you identify.
Human beings have to have a journey to go on. – Jimmy Vreeland
How To Calculate Your Target In Three Steps
- Take your gross income and cut it back about 30%.
- Always be in the process of saving money
- Ask yourself, what non W-2 income can I bring in to hit my target number.
Let’s try an example and see what number we can come up with. Take a $100k yearly income and subtract thirty percent. That thirty percent represents taxes. You would be losing out on that money anyway so you know it doesn’t need to be factored into your target.
Now we have $70,000 left in spendable money. This is the amount you need to maintain your lifestyle. Subtract an additional 10% for savings. Now you have $60,000.
Finally, we are getting into cutting out luxuries and really taking inventory of what we need. Doing this, you should be able to cut it down to about $40,000 and comfortably live off that amount. In this scenario, our target number is $3,300 a month.
There you have it! A workable formula that you can apply to your own financial situation.
CashFlow Tactics is inviting you to take a free 5-day challenge. Ryan, Jimmy, and Brad will guide you to create a personalized financial freedom plan and help you jump-start your journey to financial freedom in 10 years or less.