Here's How I Determined $250,000 As My Financial Freedom Number

Financial freedom means different things to different individuals. According to Money Fit, financial freedom typically refers to a state where you have enough savings, financial investments and cash in hand/bank to sustain your life and provide for your family.

Levels of Financial Freedom

Forbes shares that there are 8 levels of financial freedom. These are:

1. You are no longer living paycheck to paycheck

1. You have enough money to stop working

1. You have sufficient funds to be financially happy but still able to save

1. Have the freedom of doing whatever you want with your time

1. You have enough resources to retire whenever you desire

1. You can retire in a with a great level of financial comfort

1. You have enough for what is classified as a dream retirement

1. You have more money and resources than you could ever spend

While you may not have all 8 of these levels as a personal goal, it is certainly important that you determine a financial freedom goal.

How to Determine Your Financial Freedom Goal

Everybody is driven by different money values and may set their target at different levels. Whatever your money values are, you will first need to select a vehicle that can help you attain your financial freedom goal.

Before I clearly set a financial freedom goal, I identified a tool that would help me to create wealth. Looking at things such as inflation and the overall economy, I found that real estate was the best investment opportunity.

As I navigated the market and built up a portfolio, in partnership with my wife, of 8 rental units and a single-family home, I started to see the need to set an overall goal of what financial freedom would look like for me and my family. This thought did not hit me effectively about 7 years ago.

My wife and I sat down, and we designed our perfect lifestyle. We looked at how we wanted our life to look, the amount of money we wanted to earn annually, the number of cars that we found to be appropriate and other financial matters relating to the governance of our family.

From this brainstorming, we arrived at a dollar value for our financial freedom goal. We decided that in order to be absolutely financially free with the lifestyle we wanted, we would need $250,000 in annual passive income.

We then broke the numbers down and developed goals and plans to help us to achieve this goal.

Whether you are married or single at the moment, it is important to take the time to look at where you are and decide where you want to go, financially. When you determine your financial freedom goal, you will have a clearer idea of what you need to do to get there.

Fast track your journey towards financial freedom, by setting a clear goal for your life.