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7 Steps to Financial Freedom

The Need

Put together a project that will create an on-going income, sufficient for a comfortable retirement.

The Goal

Develop and put into operation a vehicle that will provide a comfortable income within 5 years, and which can be expanded with little or no additional expenditure of either time or money.

Required Characteristics

7 Steps to Achieving The Goal

Step 1: Create a Plan.

Analyse your specific needs now, and in the future, and write out your individual plan accordingly.

You can start by working out how much you need for basic living expenses each month. Include housing, food, utilities, transport, clothing and anything else that is essential for you.

Decide how comfortable you want to be in future. What size of establishment do you want to maintain? If you are no longer working at a job for example, you might be happy to down-size or move to a less expensive part of the country - or the world for that matter! You may wish to live in a bigger house, or in a better location. Whatever your choice, it's important to set a figure on your desired lifestyle so that you can plan sensibly.

How do you want to spend your time when you retire? Are there special things that you'd like to do, such as travel, hobbies, cultural activities, sports, etc?

By putting a monetary figure on these items you can work out what sort of income you will need in order the achieve your goals.

Set yourself an Independence Day Goal. Express this as a specific monthly income. Your Independence Day Goal is simply the amount you need to have coming into your bank account each month in order to be able to live as you want to live, without having to rely on a paid job. On the day your passive income reaches that level you will be independent, and in full control of your income for the rest of your life.

Step 2: Set Your Targets and Strategy

Decide how soon you want to have a passive income that will cover the things you aspire to.

List all viable sources of funding which could contribute to getting the process under way.

For example, if you want to be financially independent in 10 years' time, you can work out the rate at which you need to build up your income. If your passive income increases at say £3,000 every year, you'll be able to retire in 10 years on a passive income of £30,000. If you'd be happy on £20,000 you could either reduce the number of years needed, or reduce the speed at which you build your passive income. If you need £100,000 a year to live on then you scale up your plans accordingly.

By planning with the end in mind you can ensure you build your income by the right amount each year so that you can be confident that you'll have that required passive income in place when you want it.

Decide on your strategy. Your Independence Day plan is based on a scalable business model. We will give you a clear strategy for this business. Then you can decide whether you want to run it yourself, or have it run for you.

Step 3: Learn The Business Model That Will Make You Financially Independent

Right up front you should know that this business model has been designed with one purpose in mind: to create an abundant retirement for those who take it up. We looked for a vehicle to help us achieve this goal, and the model we're introducing here is the best we know of. It meets all the requirements listed at the top of this article. It can deliver financial independence to you.

The second thing you should know is that we're going to show you the complete model, and some of its specific workings. We'll do this so you can understand fully how the business works. As you begin to understand the power available through this model you will also realise the time commitment required to make it work.

In revealing this to you we are taking a risk. The risk is not that you will copy the model for yourself - we'd be quite happy about that - the real risk is that you will understand the model, see how it can be made to deliver the results you want, but reject it because the time commitment needed is beyond what you have available.

BUT we have a SOLUTION and it is simply this: we can run this business for you so that your time commitment need only be a couple of days a year.

This Step is going to need a lot of fleshing out. There is a lot of detail, so we'll return to it later. For now just know that you will be able to learn the business model, understand how it works, and then run it yourself - or let us run it for you.

Step 4: Make A Commitment, Do Your Due Diligence And Get To Work.

Knowledge is fun, knowledge is satisfying, but knowledge only becomes power when you put it to work.

I've procrastinated my way through a whole slew of opportunities at various times in my life, but of all the wonderful opportunities that I have researched and learned about, the only ones that have delivered are the few that I have acted on. It turns out that huge amounts of knowledge amount to very little unless you take action!

Having focused on your goals, and having learned and understood the mechanism for achieving them, you must take action. In order to reach the destination you must begin the journey.

I fancy that back in the late 15th century the university common rooms, merchant chambers and harbour-side bars of Spain and Portugal were full of talk about alternative ways to get to India. But there was very little gain until someone actually set sail and took the risk of doing something rather than simply talking about it.

When, as a child, I first heard the story of how Christopher Columbus, newly returned from his adventures, confounded the scholars and wise men by proving he could stand an egg on its end, I was thoroughly delighted. (Of course, had there been a few wise women at the table they would probably have sussed his trick before he had the chance to demonstrate it.)

Achieving success is easy when you know how, AND when you take action. Columbus' true greatness was that he not only knew how to pursue his goal, but he also took action and started pursuing!

In case you missed it, Step 4 is to learn, plan, and take action.

Step 5: Consolidate and Optimise

Run this business model for a couple of years. During that time market conditions will change and it's important to assess how this is affecting your plans. We'll be there as well so you'll have our knowledge to add to the mix.

During the first two years you'll learn some additional useful things that you can't learn in a seminar or course. If you are flexible you can adapt your strategy to take advantage of new situations. This is one of the huge advantages of being in charge of your own retirement plan.

After a couple of years you'll know what works for you and will be in a much better position to help lead the business. (We'll give you plenty of information about the basics - you'll simply tweak the business to suit your specific needs).

When you're in charge, you can read the situation and respond - you're no longer at the mercy of some large institution whose interests may not always co-incide with yours, or whose policies make it difficult for you to make changes to your plan.

So being in charge yourself is a fantastic advantage because you can improve the model, adapt it to new circumstances, and make use of your knowledge to make your business more profitable. And of course YOU are the one who takes the profits!

Very soon after you start you'll be receiving a monthly income, probably quite a small stream at first, but growing noticeably. After two years this will have increased and you can see exactly how to improve your business so as to achieve a broader income stream. We'll be there to help - as much or as little as you want. We can do all of the work if you like, so you can get on with doing what you want to do.

As we're running the same business for our own retirement plan it will be quite straightforward for us to manage your business as well. I'm using the term 'business' because this is a business, and runs in a businesslike way. However, you don't have to register it as a business, you can simply run the plan as a private individual. You don't have to turn up for work at an office, you can leave all that to us - we're already doing it anyway!

Later, if your ambition is for an income of £50,000+ per annum, you may find that a formal business structure will be more tax efficient. You don't have to decide about this though until you've tested the model for a couple of years or more.

At that stage it will be time to consolidate the business. You'll look at what works best and what the weaknesses are. And then devise a plan that will optimise the best parts of your business and turn any weaknesses into strengths.

Step 6: Review

It happens easily enough to those of us who live in the country! On my way to a meeting in London some years ago I leapt confidently onto the tube, only to realise as the stations swept by that they weren't in the order I expected. The train was moving efficiently, I had found a seat, all the indications were that everything was going to plan. Except that on reviewing the situation I realised that the vehicle was taking me away from my planned destination!

We need to conduct reviews so that we can be sure we're still heading towards the place we want to be. We also need reviews so we can be sure we still want to be heading towards the place we thought we wanted to be. Circumstances change, our lives change, and we can expect our goals to change too.

The main goal of the business model we're presenting is to create financial freedom within a specific time frame. An annual review of that goal, and of the direction our 'vehicle' is moving, will help us to arrive at a place we really want to be!

In summary: re-visit your goals, and check that everything is still on track to achieve those goals.

Step 7: Re-define, Renew, Refine,

We're always looking at better ways to use resources and I have no doubt that the model we're presenting to you now will look a little different in two years' time. That is inevitable, and positive.

The problem many people have is that they are waiting for perfection. While they wait, they are getting nowhere. And the saddest thing is that they may wait all their lives for the perfect moment to take up the perfect opportunity, running according to the perfect plan. Such a confluence of perfection will not happen. Ever.

Meanwhile, those who are willing to start with what is available now will be reaping some rewards very soon. Over the next five years those small rewards will grow and in a comparatively short time those proactive people will be gaining quite a substantial monthly income. Meanwhile the people who haven't done anything are still waiting for the perfect plan to come along - and probably still sitting in the same old chair, and moaning their way through the same old restricted life.

So as you take the voyage think of it as a strong beginning, setting out with a clear destination in mind. But be prepared to adapt along the way, recognise that there will be un-foreseen events, and know that together we will deal with those and use them to help drive us on towards our goal.

If you're anything like me (human) you'll be able to look back on your life so far and notice that you have learnt a lot from experience - often by making mistakes. So when we stumble we'll review what happened, re-define our goals in view of the new circumstances and then refine our strategy.

All of that means we can press on with renewed energy towards our goal.

Please don't be discouraged by the thought that you will be called on to adapt to changing circumstances. We'll learn from every problem, and resolve not to be paralysed by fear. Sometimes what appear to be problems will turn out to be nothing of the kind! Here's an example.

Toward the middle of 2008 we were getting a lot of warnings about the coming shock when we (and other landlords) came to the end of our mortgage introductory rates. The industry expectation was that monthly repayments would soar. This was indeed a frightening thought. We started adapting our strategy accordingly by ensuring any new properties we took into the portfolio had higher rent-to-loan ratios.

The biggest buy-to-let lender, Mortgage Express, set up a programme of meetings with landlords to discuss how they might deal with the sudden increase in their monthly mortgage payments. But by the time our meeting rolled round in January 2009, interest rates had fallen drastically and the standard variable rate on our mortgages was actually lower than the introductory rates. As the introductory rates expired our mortgage payments actually went down! What everyone thought was going to be a big problem turned out to be a big bonus.

Re-define, renew and refine. Step 7 is not so much a step that you take and never have to take again. It's more a regular process to go through from time to time. Keep your goals clearly in mind. Re-define your position, renew your commitment, and refine the system so it takes you more efficiently towards your goal of financial independence.

Now you've understood the philosophy that underpins our business model, and know the 7 steps, it's time to get to the detail of how the business works, and how you can use the model to set yourself up for an abundant retirement!

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