Get out of the rat race for good
REAL MEASURE OF WEALTH Financial independence isn’t some far-away, longterm goal; it should be your immediate focus today. And the only real path leading there is built on income-producing assets. THE ONLY
Financial independence occurs when your sustainable “passive income”, overtakes your living expenses. What a pleasure, getting up in the morning and your bills for the day, month or year, have already been provided for …
Financial independence is a general, retirement goal, but why not a goal for life? Many who take up this goal early in life achieve it just a few years later. But many who see financial independence as a retirement “concept” never achieve it. Financial independence is not a retirement goal; it is a necessity today.
And another thing about financially independent individuals: they rarely want to retire … think of Warren Buffett, Donald Trump, Richard Branson or Elon Musk.
Financial independence is achieved through income-producing assets. These include:
Financial instruments gaining in capital value and earning investment income;
Rental property that has a cash flow “break-even” and positive inflow within say five to seven years after acquisition;
Ownership of a business which is cash flow positive, successfully building up market share and value;
Ownership of a patented idea, recipe, lyric, recording, mathematical sequence that can generate exponential future cash inflows;
Hiring human capital is a great way to accumulate income producing assets (hiring individuals doing what you can't or multiplying your own capabilities);
Education or an uneducated life skill, exchanged solutions for economic benefit. Wayde van Niekerk is the perfect example of an entrepreneur selling his “fast skill” for millions.
Not enough of our monthly spend is focused toward acquiring income-producing assets. Yet those who make it their focus, tend to retire successfully and often exceptionally young.
Items that are not income producing (hence not assets) Primary residence – (lifestyle choice). Cars if not used as a taxi, courier or Uber – (lifestyle choice).
Boats/planes if not used for commercial purposes (lifestyle choice).
Jewellery/watches, even valuable items like a Rolex or Shimansky Evolym – (lifestyle).
Expensive depreciating technologies (cell phones/laptops/iPads) if not clearly providing a competitive advantage, to generate a higher income – (lifestyle)
Overspending on these leaves individuals generally wanting during retirement.
Once you start acquiring income-producing assets, draw up a realistic, rational succession plan at death. Leaving the remainder of these assets behind to a spouse or children is one of the greatest challenges. Studies have shown that as much as 70% of all global fortunes do not survive the second generation. Also, 90% of global fortunes disappear in the third generation of origin.