how I'll reach financial freedom in 5 easy steps + BONUS
Welcome to the +34 subscribers who joined this past week and are now part of 4,955 millionaires, CEO’s and high-performing entrepreneurs who read the #1 newsletter on Substack.
My name is Alex and I love creating streams of passive income. I’m here to help you make more money and reach your goal of financial freedom.
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Announcement
I started a new job today. After being in my last position for just over a year, I felt as if I had outgrown the department and needed a change. I was able to find another role within the same bank and earned a 44% salary increase just by switching jobs.
Safe to say all that extra money will be going right into dividend stocks and index funds. Call me boring. I’ll take boring any day of the week if it means I can retire early.
In this issue of The Profit Zone, I’m going to share with you how to reach financial freedom in 5 easy steps. I’m personally using all 5 of these tactics on a daily basis and can say with full certaininty, they work.
Reaching financial freedom is all about simplifying your behaviors. Some people think it’s an out of reach phenomenon that can only be achieved by a small percentage of people. That’s not true. Financial freedom is in the cards for anyone who behaves as if they deserve to have it. Financial freedom is an accumulation of small habits over time. There’s no secret formula. Just consistency, discipline, and patience.
So without further ado, grab a pen and paper and start taking notes.
How to reach financial freedom in 5 easy steps
Step 1 - Widening the gap
You can’t build wealth if you don’t have money to invest. That’s why I’m always preaching budgeting. I think budgeting is one of the most underrated parts of becoming wealthy. It’s probably because it’s not very flashy. Everyone wants to learn how to MAKE money, not how to SAVE money. But the reality is, there’s no MAKING without SAVING.
That’s why you have to widen the gap. You can achieve this by doing 2 things:
Lowering your expenses
Increasing your income (We’ll talk about this in step 3)
Here’s how I lower my expenses without compromising my standard of living:
I negotiated with my cell phone service provider and managed to save $15/month on my phone bill
Instead of buying a $3-$5 coffee every morning, I brew my own coffee at home for about $0.20 a cup
When necessities are on sale I buy them in bulk. Example: last week my local grocery store was having a sale on toilet paper so I bought 6 months worth of it
Instead of buying lunch at work ($12-$15 each time) I make extra food the night before and use the leftovers as the next day’s lunch
You can make these slight changes and see almost no difference in your standard of living. Be creative and find new ways to save money. Once you start it’s kind of fun. And having the extra money to invest is also a nice little bonus ;)
Step 2 - Automation
One of the biggest cheat codes for building wealth is automating your contributions. I use to do it manually but when I turned on automatic contributions everything changed. Investing becomes mindless. I have a weekly contribution of $50 that comes out of my account no matter what, and that alone has made all the difference in the world. This means every month I invest a minimum of $200 no questions asked. I barely even notice the money come out of my account anymore. It just transfers in the background and then when I log into my investing account I have a nice little chunk of money waiting to be deployed into some juicy dividend stocks.
If the platform you use to invest offers automated contributions (or buys) use it to your advantage. Nothing is better than building wealth with the littlest amount of effort possible.
Step 3 - Increase your income
Let’s face it. Most people earn just enough money from their 9-5s to survive. A lot of them don’t have the extra $50 to invest every week/month. There are millions of people across the globe who are underpaid and overworked. That’s just reality.
But you can fix that. And if you’re reading this right now you have all the tools you need to do so. Anyone and I mean ANYONE, can start a side business (on top of a 9-5) and bring in an extra $1,000/month.
There are so many ways to earn extra money. Here are a few you might be able to pull inspiration from:
> Start a vending machine business - buy the vending machines, buy the snacks in bulk from Costco, set them up in high traffic areas like barber shops, malls, gyms, or corner stores, and give the owner of the business a percentage of the profits
> Start a blog around a topic you’re passionate about - learn how to monetize the blog by offering promos or selling affiliate products through your content
> Start a Twitter-based business by building an audience online and creating products and services that help teach others new skills
> Buy cheap items on eBay, at Walmart or at garage sales and resell them online on Facebook Marketplace or Amazon for a higher price
And if you’re not convinced about how much an extra $1,000/month can do for your wealth over time, look at the following graph.
Step 4 - Buy index fund ETFs
I can’t preach about index fund ETFs enough. It’s as if diversification, risk management and capital appreciation all got together and had a baby. My best description of index fund ETFs goes as follows:
Think about salad. When you buy one, what do you get? You don’t just get the salad. You get the lettuce, the tomatoes, the cucumbers, the croutons, the dressing, the cheese, the onions, the green peppers, the chicken, and whatever else you like to put in your salad.
You’re not just buying the salad. You’re buying everything that comes inside the salad. Index fund ETFs are exactly the same. You’re not just buying the one share of the ETF. You’re buying every company inside the ETF.
For example (for my U.S. investors) if you were to buy the Vanguard 500 Index Fund ETF ($VOO) you would own all 500 companies inside.
This includes companies like:
Apple
Microsoft
Amazon
Facebook
Google
Tesla
NVIDIA
And so on.
Moral of the story: buy index fund ETFs and chill
Step 5 - Switch from consumer to investor
Here’s a mindset shift I had to experience to really take control of my financial future. I decided I had enough of being the consumer.
Let me rephrase that, you’ll always need to be a consumer. We need basic stuff like toothpaste, water, food, toilet paper, shampoo, etc. BUT what we DON’T need is the new iPhone, the expensive cars, the new gaming systems, the extra pairs of shoes, the pricey drinks or the designer shirts.
All that crap is putting money into the investor’s hands. Every time you walk into a Starbucks and buy an extra hot no fam caramel drizzle 1 espresso pump goat milk latte for $5.99, you’re indirectly paying the dividend of a Starbucks ($SBUX) investor.
Shift your mindset from consumer to investor and you’ll make a lot of money. Then eventually get your dividends to pay for the things you consume. Wealth hack.
Shhhhh!!! Don’t tell too many people or we won’t have any consumers left to make money off.
Some resources to help you make more money:
Money Mastermind - the “Money Bible”. Myself and 29 other expert creators teamed up to create the most all-inclusive 280-page finance book on the market. Over 100 topics about money including real estate, crypto, budgeting, dividend stocks, online business, and more.
The Complete Investors Accelerator Pack - everything you need to build a dividend portfolio that grows on itself. Learn more about dividend investing, how to analyze dividend stocks, what to do with your dividends and how to build a stream of passive income through the stock market.
The Molina Letter - the only product that’s helped me grow my Twitter account to 30,000 followers. Fill in the blank templates you can copy to help you create viral content with minimal effort. A big following gives you the key to creating products and making money online. There’s a reason why 500 people are subscribed to this letter.
TweetHunter - let the software do the tweeting for you. The only scheduler you’ll ever need. This tool makes me money in my sleep. Give it a try for free.
Hipster Budget Guide - having trouble saving money? Learning how to budget is your solution. This book will show you ways to save money you never even thought of. Worth every penny.
My 2 Cents - my other newsletter where I voice my personal opinions on life, money, and people. Beware: I have zero filter. But it might give you a good laugh.