Financial Freedom Course
FFJ Financial Template: SPREADSHEET
Wave Accounting: WaveApps.com
Module 2 Outline
Section 1 – Financial Basics
- Financial Freedom
- Passive Income
- Financial Literacy Basics
Section 2 – Debt Management
- Types of Debt
- Credit Scores 101
- How to Get Out of Debt
Section 3 – Money Management
- CashFlow Management
- Creating Wealth
Section 4 – Personal Finance
- Money Mindset
- Financial Review
Section 5 – Business Finance
- Payroll is Key
- Separate Accounts
Section 6 – Financial Freedom Practices
- Inner Bank
- $100 Bill
- 10% Giving
- Removing Resistance
How I Define Financial Freedom
Financial Freedom is a feeling not a destination. It’s the gift of living with the feeling of abundance of time and resources to enjoy life! The choice of not needing to work (at a job, your business or being a caregiver) because you have more passive income coming in than your living expenses. You are living your dreams!
Financial freedom waking up each morning and having the choice how to spend your time. Playing with kids, completing a passion project, volunteering, investments, vacation! Living with abundant financial resources means there’s no trading time to make enough money to complete daily work tasks, draining caregiver responsibilities, antagonizing relationships tied to money, collectors requiring payment. Rather my time is spent enjoying all life has to offer with the people I care about.
Financial Freedom is growing my wealth so I can provide for myself, live my dreams and share my abundance with my loved ones, my community and the world.
Escaping the Rat Race
The Rat Race is a term I first heard in Rich Dad Poor Dad by Robert Kiyosaki. This book is often referred to as the #1 finance book of all time. The “Rat Race” is working for money and the endless cycle of feeling there’s never enough time and/or money. The rat race is needing to earn enough money to cover your cost of living. Earning more money comes along with spending more money which perpetuates the rat race.
Passive and Earned Income
Earned income is trading your time for money, a one-time payout. There’s nothing “wrong” with that however it puts a limit on how much able you’ll be able to earn. Passive income is money you don’t have to work for. The richest and poorest of society both utilize this. The poor receive passive income in the form of government benefits and social security checks. They don’t have to work to receive money and generally stay at that low income level.
The ultra-rich usually don’t have to work to maintain their income level either because their money is at work for them. Perhaps they spent their money on a real estate investment of a 12-unit apartment building generating nice monthly profits, selling stock that soared, receiving payments from loaning money, investing in a new business. Think of a musician who recorded a song and is still receiving royalties for something they did long ago. All of these things generate money now pretty automatically once the time and money initially went to work. This is the joy of passive income, do it once and reap the financial benefits over and over.
Play Cashflow Game
The best way to learn the concepts of how to build passive income is by actually doing it. I LOVE the board game CashFlow which Robert Kiyosaki designed. I attended CashFlow clubs in Los Angeles and even started my own that’s still running! People get together to play and being in person teaches skills of how to negotiate and structure deals, too. Playing the game online is a great way to learn the basics.
The CashFlow Quadrant
Robert Kiyosaki has a whole book dedicated to the CashFlow Quadrant. The left side is the people trading their time for money. The right side is where you money is working for you!
This financial freedom course teaches you how to invest your time into a website and turn it into a digital asset. It also takes a different thinking process to switch from trading your time for money.
Business Owner vs. Self Employed
The self-employed will work 80 hours a week to avoid working 40 hours for someone else!
The business owner owns a system and the self-employed person owns their job. In the E-Myth Michael Gerber instructs you to structure your business as job positions from the beginning. At first you might be the one “wearing all the hats” although you have the mentality of hiring out the positions. Hiring moves you over to the business owner side. One of my happiest hiring was my bookkeeper who gave me back almost 2 weeks of my time each month – worth every dollar to not have to deal with that anymore!
Building Passive Income
There are many types of passive income. Writing a book, buying a rental property, stocks, owning a business… This is where the fun comes in finding out what you enjoy! In this course I’m going to show you how to create a your small business online and create passive income from it.
Financial Literacy Basics
Types of Debt
Good Debt and Good Debt
- Does it put money in your pocket?
Line of Credit
- Credit Scores determine the likelihood of you paying back a loan
- Higher score indicates a higher chance you’ll make the payments
- A low scores means more risk of not repaying the lender so they’ll charge a higher fee on the loan
- An interest rate is the fee charged for the loan or credit extended
- The interest rate is a percentage of the loan amount (A loan for $10,000 with a 5% interest rate means the fee would be $500)
- Even car insurance and car rentals pull your credit and can charge more or have higher deposits if you have a low credit score
- Credit Score Factors
How to Build Good Credit
- Several types of credit
- Pay off credit card each month
- Large “Available Credit” = low balance, high limit
- Credit Score Cleanup
How to Get Out of Debt
Snowball Debt Payoff
Debt Allocation %
Mortgage Early Payoff
- Extra payments
- 101 Financial Services
Deposit Funnel & Separate Accounts
Useful Money Apps
[Adding in more to this section]
Your Point A
Setting Up Accounts
Opening New Accounts
Integrating Cashflow Management
Funneling money where you want it to go
Self from Business
Types of Accounts
Payroll is King
1099 vs W-2
Financial Freedom Exercises
Inner Bank Exercise
The Inner Bank Exercise is my spin on the Mental Bank. I’ve used the exercise many times over the years and shared it with friends. Every time it’s applied the real life results are incredible!
The Wallet Process
Click Here for Instructions on the Wallet Process
This exercise I got from Ask and It’s Given pg 245. It’s really fun and I constantly keep $100 in my wallet for this purpose. The first time I did this I was in Vegas – it was a perfect place and I had a blast!
10% Giving Exercise
This exercise is by far the most powerful and challenging. Take 10% of your income, write a check to yourself and cash it. Then give the cash away to anyone as long as it doesn’t benefit myself or family.
“The Prosperity Game”
Click Here for Instructions on the Prosperity Game
This exercise I got from Ask and It’s Given pg 177. I haven’t personally played this game yet though a few of my friends have and love it!
Release Resistance to Become Free of Debt
Click Here for Instructions on the Releasing Resistance
This exercise I got from Ask and It’s Given pg 271.