What is Financial Freedom?
While this number will vary for everybody, the basic math is: Cash Flow from Assets > Monthly Expenses
It is actually a pretty simple concept but it can be hard to implement. Think of it like trying to lose weight. To lose weight, you don’t need a fancy diet, supplements or a Bowflex PR3000 Home Gym. All you need to do is eat less and exercise more. Sure, you can starve yourself and lose weight while you can also spend 4 hours a day in the gym and lose weight. But, like with most things in life, a balance and combination of the two will result in the best and healthiest results.
So to have Financial Freedom, what we need to do is Increase Cash Flow and Decrease Expenses. Again, you can focus on only 1 side of the equation and still get results, but we are going for a more balanced approach.
Financial Freedom = Cash Flow from Assets > Monthly Expenses
The easiest place to start is with your expenses. No, not with your Starbucks Addiction or Netflix Account but with YOUR BIGGEST EXPENSES. Which for most people are Housing, Transportation, Healthcare and Taxes.
Housing is the easiest to fix. No, you don’t need to go run home to your twin bed in your parent’s basement but you do need to get a little creative. If your goal is to be financially free then you will need to make adjustments to your lifestyle which will seem like sacrifices at first. The first place to look is what city and country do you live in? Are you living in a big, expensive city like LA, New York or London? If so, your “number” to be financially free is going to be a lot larger than someone who is living in Pittsburgh, Dayton, Ohio or Bangkok. Also, what part of the city do you live in? If you’re living right downtown, then it might be wise to move a little further from downtown and get a cheaper place.
Next, if you’re living alone, you just made it that much harder on yourself, unless you live in a low cost city. (I pay about $250 for rent and bills in Kaohsiung, Taiwan.) So getting a roommate or renting out your extra room/couch/etc on Airbnb will greatly lower your expenses if you’re in an “expensive” city.
House Hacking is my favorite option because it will help build wealth in two ways. One, it lowers your expenses so you can save more and two it gets you started into real estate which helps build more assets/wealth.
House Hacking is when you buy a house and rent out part of it to cover your rent and in some cases give you extra cash flow. So let’s say that you buy a 3 bedroom house for $150,000. Your mortgage is $750 and you rent out your extra two rooms for $500/each. Now your cashflow is $1,000-$750 = $250. Just to be conservative, we’ll spend this $250 on home repairs in case something happens. You are now LIVING FOR FREE while having your roommates pay equity into your house. When you sell that house, you get the equity back PLUS the appreciation.
Why Most Dropshipping Businesses Fail
Most People Don’t Treat Drop Shipping Like a REAL Business
The number one reason most dropshipping businesses fail is because people don’t treat it like a real business. Whatever drop shipping “niche” you’re getting into, take it seriously. Think about how you can help add value to that particular market place. Don’t try to drop ship some fidget spinners from Ali Express and then wonder why it didn’t work out.
Whether you like it or not, you’re building a real business. You’re going to have real customers with real problems that need solving. This is how you build trust and build a business. In the end, this is what you want to do because it will lead to the most value for yourself. Your job as an eCommerce entrepreneur or “drop shipper” is to provide value to your customers. You are providing a trustworthy platform where customers can find answers to their problems and safely purchase a product or service.
Most Drop Shippers Don’t Solve a Problem
Businesses are about one thing and one thing only, solving problems. More specifically, solving other peoples problems, not about solving your problem about how to make thousands of dollars online so you can travel the world. Look at your product and service and ask if you are actually solving a problem and providing value.
As an eCommerce entrepreneur or drop shipper your job is to solve problems. Your customers have problems, you have solutions. Let’s take the example of Andrew Youderian at Ecommerce Fuil who created and sold TrollingMotors.net for over 100k. Andrew created a drop shipping store where he sold trolling motors. This is not hard to do and anyone can build a site, contact suppliers and start drop shipping trolling motors. The thing that set him apart from his competition was that he also put together an in depth website that answered peoples questions about the different trolling motors. By doing this he created a valuable resource for his customers which in turn built trust and lead to more profits.
If you’re considering drop shipping or Ecommerce, then do yourself and your potential customers a favor. Start a real business. You can still drop ship and in many cases should drop ship. Just realize that you’re starting a real business and any temporary arbitrage opportunity between eBay and Amazon or aliexpress and Shopify are going to be over saturated and undervalued.
Money Doesn’t Take a Vacation, it Makes the Vacation
Last month I went on a road trip in Kending, Taiwan (also frequently spelled Kenting) and decided to bring my laptop with me. I actually purposefully bought this scooter because the trunk was big enough to fit my 15.6″ laptop inside. Anyways, before I left on the roadtrip I had a problem with a customer who said they didn’t receive their package so I decided to bring my laptop so I could deal with it once I got down to Kending. As I was driving I started feeling sorry for myself having to “work” and bring my laptop down to the awesome beaches in Kending but then it hit me.
This is my life. I am completely location independent, I can go anywhere in the world and run my business.
Sure I have to be connected to the internet and answer emails but I wouldn’t trade that for a real job in a million years. I like getting sales and making customers happy and growing my business. The business is what is funding my entire life. So while my friends with jobs are getting drunk and not worrying about work for 3 days straight, I’ll still be thinking about my business. How to grow it, how to improve it and how to make this lifestyle last forever. Because when you’re a business owner, you don’t ever really get a vacation, but a the same time, you’re always on vacation.
So that’s why I always travel with my laptop, why I check my email at 3 am after a long night out and why I’m in a coffee shop right now on a Saturday writing this blog post.
Money Doesn’t Take a Vacation, It Makes the Vacation