How To Build A Finance Empire
How To Build A Finance Empire
What is the formula to calculate one’s "freedom number"?
There is a formula for calculating your "freedom number," which can be found on my website under resources. Here's how it works: Start with your income and subtract your expenses to find your net income. For example, if you earn $200,000 and have expenses of $36,000, your net income would be $164,000. Then, add any additional income, like a side hustle—say $10,000—bringing your total to $174,000. Next, add 3% for inflation, which would be $5,220 in this case, resulting in $179,220. Multiply this number by 2.5 to determine your "freedom price." For example, $179,220 multiplied by 2.5 equals $448,050. This is the amount you need to make to be in a position to make quality decisions about your life.
How can one avoid outliving their money in retirement?
Many people outlive their money. Here's a simple strategy for planning retirement: First, estimate the dates of your retirement and eventual death. Next, visit ssa.gov to determine your potential Social Security benefits, noting you need 40 credits to qualify. If you lack these credits, you'll need to contribute more to Social Security. Consider your living arrangements in retirement, such as housing and transportation costs. To begin saving, you can start a simple retirement plan with as little as $10 a week in a Roth IRA through platforms like acorns.com. Eventually, you might expand your investments to include a free Vanguard account and invest in secure stocks like those in the S&P 500, starting from $50 to $1,500 a month. This approach helps grow your funds while you're still employed.
Why should self-employed people build financial security in case of emergencies?
My journey to financial independence began from a tragic event and sheer desperation. I already had a son, and my daughter was born on Christmas Day. A few months after her birth, I noticed she wasn't herself for about a week. By Saturday, I took her to the ER. The doctors immediately rushed her to the ICU and delivered devastating news: she needed a heart transplant immediately and was not expected to survive until the next day. We spent four months in the ICU. During this time, I was trying to manage my career as a hairstylist, taking care of my three-year-old son, and finding a way to afford a heart transplant, all while handling the regular costs of rent, utilities, and daily life.
In October, my daughter received a heart transplant, which was initially a success. However, she eventually didn't make it. This experience taught me the importance of financial preparation. I realized I needed a retirement plan, extra savings, and a better understanding of managing money. I wished I could have focused entirely on her care without the pressure to work. This tragedy led me to learn about retirement planning for self-employed people, saving money wisely, and managing expenses more effectively.
Why does consistency build trust and lead to business growth?
Consistency has helped me succeed because people value reliability in any business. When you go to Chick-fil-A, you know it will taste the same every time. This consistency builds trust and leads to referrals, as customers know what to expect from you.
How can one take steps to overcome self-blame?
First, you need to give yourself permission to move forward. Forgive yourself, understanding that it wasn’t your fault. Many people think, "If I had done this or that differently," but it's not your fault. Next, ask yourself what you truly want for your life. Since I was in 1st grade, I knew what I wanted. I was determined—I knew from a young age I would be a hairstylist and a neurosurgeon.
*This interview has been edited and condensed for clarity.*
