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  • Rohit Musale, CFA

The Simple 3-Step Framework to Achieve Financial Freedom

Here is a three step framework that you can use, to achieve financial freedom in your life, as fast as possible.

1) Start a business

Whether you like it or not, the truth always remains the same.

It can be a side hustle or a full time business.

But at the end of the day, the truth is, you will have to start a business, if you ever want to achieve the goal of financial freedom in your life.

You will never be able to do it with a salary.

Just forget about it.

And by the way, what is financial freedom?

Financial freedom is when your total monthly passive income either equals or exceeds your total monthly expense.

You don't have to become rich, to achieve financial freedom.

All you have to do is, to ensure you earn enough passive income from your new business, which takes care of your business expenses, taxes & personal expenses.

As long as that equation holds true, you are financially free.

Remaining a salaried professional or a self-employed professional in your life, is absolutely not the way to do it.

Program that statement into your brain.

You will eventually have to take the leap and start something of your own.

I cannot say it more clearly than this.

Your financial future depends on your own business.

So, pull up your socks and get started right now.

Don't wait for all the lights to turn green.

It is never going to happen.

Simply draft your resignation letter.

Go to your boss and say, 'thanks but no thanks.'

And get down to your own business.

You will make mistakes, but eventually you will see success.

Your business will give you financial independence like nothing else can.

So, step number one is to start a business.

2) Make that business profitable

Now, if you want to build a sustainable, long term business, then you will have to spend at least, two to three years in the business, without expecting any profits from the business.

However, after two to three years, you have to make sure that the business turns profitable.

You cannot grow in your life, with an unprofitable business.

The business has to produce a free cash flow for you on a consistent basis.

Business that can generate free cash after accounting for all the expenses, are the ones that survive in the long run.

Cash burning business, sooner than later, go into the books of history of financial failures.

Without exception, if a business can't make money, it is destined for file for bankruptcy one day.

The bottom line of your business has to be positive.

3) Invest those business profits in productive assets

So, for example, you start a business, you spend three years building the business and then you make the business profitable.

Now, you have to take these profits and invest in assets that produce cash flow for you.

Here you have two choices.

One is that, you can choose to invest this profit in the same business that you have started, because it gives you a very high return on invested capital.

Or, you might want to find another business or another asset which has an ability to generate a better return, than what your business is capable of providing you.

It all depends on what kind of return are you expecting on your invested capital.

If your business is giving you more, you plow back the money in your own business.

If other assets give you more return, then you have to invest in other assets.

What are productive assets?

Productive assets can be anything from real estate, which gives you rental income.

It can be stocks which can give you dividends.

It can be fixed income items, which can give you interest income.

It can be commodities.

It can be paper assets like stocks, bonds, mutual funds etc...

It can be some other private business.

The goal of investing is to start earning passive income.

The more passive income you earn, the more money you have, to invest back in productive assets, and the more your asset base grows, the more your passive income is going to grow, which will ultimately help you achieve financial freedom, as per the definition that we discussed just now.

So, follow this simple three step framework.

It sounds very easy, but you will have to have to put in a lot of work to make sure that, you achieve your goal of financial freedom.

My best wishes are with you.


Rohit Musale, CFA

15 January 2023


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