As a society we have been programmed to believe that if you go to school, get a good job and work hard you will be successful and retire wealthy. While this can be true, it is not reality for most of the working class population today. The fact is you will never be financially free if you work for a living - either as an employee or self-employed business owner.

The reason is that as soon as you stop working, your income stops too! You are essentially a slave to the system, working to maintain your lifestyle and pay the bills. To make matters worse, we have an abysmal track record at saving properly for retirement. We all know we should put money away each month for retirement, but outside of an employer automatically deducting money from our paychecks each month, how many people actually pay themselves 10% before they pay the bills and then buy the latest toys?

Have you ever noticed that the Rich do not have jobs working for wages? They may have started that way, but that is certainly not how they make their money any longer; they have a better system that allows them to remain financially free. We need a better system in order to achieve financial freedom as well; we need to start with an entirely new perspective on the reason for having a job, and why we are investing at all. We need to start thinking the way millionaires do.

Here are the 3 steps to follow:

Step 1: Earning income from a job. This is where most people are stuck. To be financially free you need to look at this step as a starting point, and not the end goal.

Step 2: Using proper money management to divide your income each month into “buckets”. Of course you need a bucket for monthly expenses like mortgage, car payment, groceries and utilities. However, it is critical that you first put 10% of your income into a financial freedom account “bucket”. Money from this FFA account will be used to purchase investments that provide passive income each month, without further effort from you.

Step 3: Money from your passive income investments pays for your expenses. The income from your job has now been substituted for passive income. This is the end goal and once you have achieved this stage you are FINANCIALLY FREE. Sure, you can choose to work because it is rewarding or a service to society; but you are no longer trapped in the cycle of working just to pay the bills with no hope of early retirement!

Did you find this article helpful? If you did, then take a look at the step-by-step video tutorials here to get your passive income started!