The First Step Towards Freedom
Taking the first step is the hardest part.
The fear of taking the first step towards freedom is pretty normal. While some people I've spoken with make quick decisions about their journey to freedom, many people and immigrants are afraid of taking the first step. The result is that it took a very long time for them to build up their wealth, which is a much easier approach.
So how do we turn this into a complete 180 and easily start the journey towards freedom?
As a person who loves data analytics and numbers, I know that I had to change in order for my life to change. Here are questions that have helped me personally take that first step:
- Are you okay with always trading time for money?
- Are you okay with turbulent stock market returns?
- Are you okay with not being able to have time for your passions?
- Are you okay with not being able to spend time with the people you love?
- Are you okay with not being able to make time for the growth that you have always wanted, spiritually or personally?
Once you’ve found answers to these questions, you will most likely realize the cost of not taking the first step, and it’s too great.
An important thing to remember is that the change you want may not happen the way you want it to. It’s just life happens, we may or may not open doors of opportunities. Another question to ask yourself is, “Will I be able to accept the consequences of this investment not going well, or even the worst case scenario in real estate investing?”
Risks differ depending on whether you’re an active or a passive investor. For an active investor, if you were to purchase and manage your own property, your tenants and toilets, and put your name on the loan, the worst case scenario would be hurting your credit, having foreclosures, being sued, filing for bankruptcy, and incurring a lot of bad debt.
As a passive investor, you get to own a piece of the property, not signing your name on loans, not managing tenants and toilets. I am truly passionate about helping others get into passive investing as well. My worst case scenario is losing the amount of capital I put up. Thankfully, I haven’t lost any of my own or other people's money in my real estate investing journey.
Another worst case scenario that applies to both is how it will affect your personal situation. A little story to tell you what that means. I have a friend, his grandfather, who had hundreds of millions of dollars in their business, who was also an investor, and they were investing in commodity trading markets. But because of just one commodity trading decision, the business went bankrupt, and as a side effect, his parents divorced as well due to the stress and dynamics involved, even though neither of them really cared about money.
Hey, I'm telling you this not to scare you but to prepare you. It's critical that you have this type of foundational conversation with your family about financial planning before things get out of hand.
Remind them that you'll have each other no matter what happens. I know this sounds like a little sensitive conversation here, but it's important, right? We don't want to lose people we care about because we didn't agree with them from the start on some important financial decisions, financial directions, and freedom directions. So once you're aligned and once you're okay with the worst case scenario, whether because of your net worth and liquidity or your ability to generate income, then you feel a lot better about proceeding because your downside is a lot more protected in that scenario.
The last thing is actually evaluating the opportunity you're going to invest in. Make sure it fits your overall investment criteria, is truly risk-adjusted, and that you’re okay with taking it. All investments can have great returns. But it's about the risks you have to take to get those returns.
Anyway, enough babbling for today. First, consider the three different knowledge sources and how you can combine them to maximize and accelerate your learning. And then we talked about how to ultimately take that first step using the knowledge you gained.
And through investing, whether it's passive investing or active investing, it's up to you. The goal is to take the first step towards freedom.
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