Earlier, I wrote about the types of income.
Types of income and status accordingly include:
1) Active income (Employees)
2) Making money with one-time effort (Self-employed/freelancer)
3) Money makes money (Investors)
4) System makes money (Entrepreneurs)
What strategy does an individual make for these incomes to achieve financial freedom?
1) Active income (Employees)
It is the most accessible and popular method to start with.
Most people start with salary to accumulate capital. However, the downside is that you need to spend your time because in this method,
Income = 1) Hours worked X 2) Hourly wage
You can either work longer hour or increase hourly wage. However, this is not how most of people achieve financial freedom.
2) Making money with one-time effort a.k.a passive income (Self-employed/freelancer)
Most people simply have hobbies like watching Netflix and Youtube videos after work.
However, the key in achieving financial freedom lies in creating a diversified pipelines that allows us to earn money through this second method.
For example, there are many passive income opportunities these days, such as publishing an e-book, running blog, and YouTube channel.
I will be writing more on this topic.
3) Money makes money (Investors)
To achieve financial freedom, you should invest with the money you earned from the first and second methods. By securing as much seed money as possible, you can quickly earn money via money.
There is already too much information about investment related to stock/real estate investment, so I will not go into more detail here.
This can be done via either capital appreciation (stock/real estate going up value), or via dividend or rent that puts money in your pocket.
I will also write more on this topic.
4) System makes money (Entrepreneurs)
Ultimately, this method may be the best, but is difficult. Entrepreneurs create system which brings in money without their input hours or efforts, because they have created such business system in the first place.
Even though I myself have not yet succeeded in making money with the system, ultimately, I would like to start my own business, most likely knowledge-related content business.
To illustrate, if you have see McDonald’s store, there are already three types of incomes being genereated.
- Employees who work at McDonald’s who get paid for their salary (Active income/Employee)
- Stock holders of McDonalds’s who get paid via dividends and capital appreciation (Investment income)
- Entrepreneur who already set up franchise business (Entrepreneur/System generated income)
Conclusion:
To summarize, the way an office worker can achieve economic freedom is either to earn and save as much money as possible in the shortest possible time, and or create business income.
Creating different income pipelines and a system that allows money to accumulate in my pocket even if I do not work, is the key to achieving financial freedom.
In the next article, I will write an article introducing what kind of pipeline you can try.
Korea version of article can be found here.
