Is sasha today i will share with you the five incredibly important secrets of financial independence and here's the thing. I won't tell you that you need to be frugal, save money or get into some sort of a magical mindset, because these are not the keys to financial independence. These are the easy things or the easy to explain things that people like to do to make themselves feel that they are doing the right thing. But in the grand scheme of things scrimping by not buying your favorite cup of starbucks in the morning, is not going to make you rich sorry, but here are the five things that will pay attention, because these are things that actually do work and actually can get.

You there the first one is to understand the difference between your balance sheet and your cash flow, and i do apologize for using business speak financial jargon here, but this is the best way that i could think of putting it, because the majority of advice that i See about financial independence out there tells people that they need to improve their cash flow without people, understanding that that is what it's talking about, but cash flow is not what makes people reach financial independence here is what the difference is. Cash flow is the money that flows in and out of your wallets every month. It is your budget, you earn some money, your money goes into your wallet, you go and spend some money, it comes back out of your wallet and everyone seems obsessed with reducing the money going out of your wallet, because that keeps more money in your wallet and Your cash flow position looks good, but if you want to have financial security and financial independence for three four, maybe five decades ahead, your monthly budget right now is not a very useful metric. You should be focusing on your balance sheet, because that is where the magic actually happens, and that is the thing that can go and give you that financial independence, your balance sheet is the sum of all of your assets and liabilities, which is basically just your debt.

You want to build a kick ass, big pile of assets that generate you, income or assets that naturally appreciate in value. Maybe in some cases, both of those things we're talking things like investing accounts, property businesses, that sort of thing those are the assets that you want to have, and you also want to reduce your debt so that the difference between your assets and your debt is as Big as possible - and this is the important bit it's the difference between them - that counts not one or the other um the difference between your asset, pile and the difference between your debt, pile is the amount of equity that you have in yourself from a financial standpoint. Having zero debt is great, and unfortunately, everyone focuses on that bit, but having zero debt, while also at the same time having zero assets is not going to get you to financial independence. It's gon na get you nowhere.

Having a hundred thousand of debt is good. If you use that debt a few years ago to get a property that is now worth 250 000, because you have that gap of 150 000 and that property is worth considerably more than the amount of debt. And let's say you have that 100 000 of debt and you also have your 250 000 property and you come across 100 000 of cash. Maybe you inherited it or maybe you're in the lottery.

It doesn't really matter. The overwhelming advice you'll hear in that situation is that you should of course use that money to pay down your debt. Debt is bad. It keeps you poor, because people are thinking of their cash flow.

They are not thinking of their balance sheets, then they know that they can go and get rid of their debt repayments and they can keep all of their rent every month. Once they've done that, and that sounds like a great idea. But if you are thinking in terms of your balance sheet, you might choose to go and use that 100 000 to get another property or maybe invest it, and now you have a bigger asset pile and that bigger asset pile is generating more income. Maybe it is growing faster than the previous one you had, while your debt has remained fixed, and that means that over time, that gap is going to be growing faster than if you went and cleared the debt instead and before the obvious comments show up.

Yes, you do have to make sure that you are managing and understanding your risks properly and yes, there is such a thing as being over leveraged. I do understand it, but there is also such a thing as being under leveraged. If you are trying to optimize your routes, to financial independence and being under leveraged, comes from focusing on your cash flow and not your balance sheet, and it is the single biggest reason why a lot of people will never hit their financial independence targets. Despite trying hard to do so, the next secret to financial independence is focusing on costs instead of focusing on income.

There's a few reasons why people do this focusing on costs is easier. It's really easy to go and cut some spending on to not eat out or whatever easy, compared to going out there and figuring out how to earn more money. That sounds difficult. It doesn't have a very obvious way of doing it and is very open-ended, but focusing on costs is a highly inefficient way of trying to improve your financial position, and i mean sure i get it.

It is important to not spend too much money. I am not stupid, but the number of times i see people advocate frugality that goes way beyond anything that is sensible or normal is frightening. No matter how much you focus on costs, there is a seeing of how much you can save and a lot of people's costs are not very easily changed, because there is only so much that you do spend every single month and some of it like regular bills, Are not gon na shift, no matter how hard you try, but if you focus all of that attention all of that time and all of that effort on earning more money, there is no upper ceiling to where that can go. It has never been easier than now to find ways of earning more income if you're out of ideas just go on fire or up work and go and have a look around.

There are a crazy number of jobs that you can go and do that will earn. You cash in your spare time. I am constantly looking for writers and i can't find enough good ones for my content business on those platforms. The only requirement i have is that that person can write stuff on computer, which is something that most people can do and over time you can find bigger and better ways of earning more money.

I can tell you that, without a shadow of a doubt that you can find ways to earn a lot more income, if you put in all of that effort, then you'll ever be able to save on buying slightly cheaper food from a shop. That is maybe 20 minutes further away, and that income will take you a whole lot further to your financial independence goal all right. Let's move on the next thing that i wanted to talk about is understanding the difference between your macro goals and your micro steps that you need to take there. You need a very clear plan with very clear steps you need to take if you're going to go and get to that financial independence place too often, people get fixated on the ultimate goal.

Their only thinking is about the thing that they want to get to the magic pot of money that one day in the hypothetical distant rosy future will set them free and they try to do bits and bobs here and there that sort of, maybe in their eyes, Go and get them slightly closer to that goal without any real, coherent, realistic plan. The magic pot of money in those circumstances will always stay in this hypothetical distant future. You need a plan. Do you need to go and learn a skill so that you can start doing a job that will teach you how to start a side hustle that can become a side business that can become a full-time, big money earner for you in the future.

A good plan will have steps, and not all of these steps may be obvious or maybe look like they're taking in a direction. But if you don't have a plan, you won't know that these are the steps you have to take. Sometimes you have to work on something that may seemingly be taking you in a totally different direction to where you want to be going, because in your plan, that is the step that enables the next step. That does happen to go the right way.

Let me tell you a little story: there's a guy called andrew wiles, who had a life mission to prove a mathematical theorem called fermat's last theorem, one of the most famous math problems ever he was obsessed with this theorem and he realized that there was an approach To solving it, but if he was to go and try that approach, it would take him at least a few years to go and complete it, and at the time he worked as a professor in princeton. So he came up with a plan as a university professor. He had an obligation to publish regular research papers as part of his job with some kind of frequency and if he was publishing those research papers for his job, the amount of time he would have spent on working on those would mean that he couldn't really work Or at least not spend enough time working on solving fermat's last theorem, so he first spent several years working overtime, putting himself through a crazy amount of effort to create a ridiculous number of research papers. It took him years.

None of this work had anything to do with thomas last theorem, but it was part of his plan. Then, when he was ready, he stopped working on his research. He put all of those research papers into his draw and he went all in on solving the theorem and he spent six years solving it, which he eventually did. He did it in 1994, but nobody knew that he was doing it because he kept releasing those research papers that he completed for many years before that as and when it was time to go and publish another academic paper andrew had a plan and he executed the Steps along that plan, even though a lot of the steps in that plan, especially in the early phases, seem to take him nowhere near to his overall goal for a very very long time.

While he was stashing all of his research. And that brings me very very nicely to my next point, which is especially important right now. There is no magic shortcut. There is no quick way of skipping to the end.

I am really sorry once again. Unfortunately, the one thing that is going to get you to financial independence is by putting in the hours you need to go and do the grind. I am so sorry to be the bearer of bad news, but we live in a bizarre time when people genuinely expect to go and get thousands of percent of return. In a few days or a few weeks, people seem to have lost touch with reality, and everyone is chasing that magic money tree that will make them instantly rich.

The name of this magic tree changes all the time, but the end result doesn't that multi-level marketing scheme that your mate is telling you about is not going to make you rich and the latest scam. Crypto token. That is launching right now with the best road map that is going to the moon. Is i am so sorry, it is not going to make you a billionaire.

The world just doesn't work that way, and so, if you really do actually do want to hit your financial independence goals, you'll have to invest some actual hard work, hard work over a long period of time. There is no substitute. You will need to learn skills that you don't know. You'll need to put in the hours that you don't have you'll need to make sacrifices.

You maybe don't want to make because here's the truth very few people ever get there to that point of complete genuine financial independence. So this is very much not a stroll in the park where anyone can go and do it by just watching a youtube, video and then heading over on their way to becoming a multi-millionaire. And while we're on the theme here is the next top tip, don't base your goals or compare yourself to random social media personalities, you are you and they are they. They are not you and you are not them.

You don't know where they started or how they got there. You don't even really know where it is that they got to or at what expense. You only need to compare yourself to one person. You need to compare yourself to you a week ago to you one month ago to you a year ago.

If you have that solid plan be absolutely ruthless. With focusing yourself on execution, you can achieve a lot more than you think is possible. Compare yourself to where you were this time last year and use that to help yourself get better, to refocus yourself to adjust your direction, because here is something you need to know. There is always someone out there who is better than you and everything, there's someone who is richer.

There's someone who looks better, there's someone who got to your goal faster. Maybe they strike a patch of luck. Maybe life likes them more, maybe they're just better. In many cases, it probably is because they are better, but once you get over this fact that there is always someone someone out there, that's better! You can just stop worrying about comparing yourself to those other people comparing yourself to where you should be at whatever age.

You are is just pointless. None of that matters. You need to chat your own path that you are happy with, that you want to walk down and then you need to go and walk down it and measure your progress along the path against your own plan. Not somebody else's, that's it.

If you found this video useful, please don't forget to smash the like button for the youtube algorithm. I really really do appreciate it. Thank you so much for watching and i'll see you guys later. You.