There’s a Biblical truth found in James 2:17 that says, “faith by itself, if it does not have works, is dead.” (ESV) This scripture applies to every area of our lives, including our finances. When we talk about financial freedom, it’s spiritual and practical. Financial freedom empowers us to believe that God will provide for all of our needs in abundance. We also have a part to play in experiencing this level of financial freedom that empowers us to earn more from our passive income than we do from our job.
If you’re just getting started with us on your journey to achieve financial freedom, then there are a few steps you need to put into play before applying the content in this blog. The first step to financial freedom is to escalate your ability to earn. You can do this by learning everything you can about creating passive income. Your next step should be to eliminate your consumer debt. Then, you can focus on accumulating wealth by creating a savings account that can later help you purchase a home that you can rent out or sell one day. You can learn more about these steps in “Your First 3 Steps to Financial Freedom.”
Once you’ve taken those first three steps, you can begin to really make strides toward your financial freedom. This blog outlines the next four steps to secure financial freedom. They are:
- Participate In Asset Building
- Accelerate Investment Opportunities
- Emancipate From Your Job
- Donate Excess Money
1. Participate In Asset Building
Asset building is your first major step toward financial freedom. Homeownership and opening a Roth IRA are two great places to start. I love to teach people about the benefits of building wealth through investment properties, but you need to purchase your own home first. One of the many advantages of homeownership is a capital gains exemption which allows you to earn up to $500,000 profit from your home tax free.
A Roth IRA is another great way to build assets that will contribute to your future financial freedom. You can withdraw your contributions to the account and even borrow against the contributions to your Roth IRA. However, it’s important to note that there are penalties involved if you make a withdrawal before a five-year holding period or if you’re under the age of 59 1/2. Those penalties include a 10 percent fee and an income tax payment. This individual retirement account gives you a tax advantage since anything you earn from a Roth account can be tax-free.
This is so beneficial when you’re looking to raise capital for something like a down payment on a home. Both a home and a Roth IRA are two strong asset bases that will set you up to accelerate on the path to financial freedom.
2. Accelerate Investment Opportunities
Whereas a Roth IRA and homeownership are great, you will need to accelerate your investment opportunities if you want to experience financial freedom. If you have created a solid asset base, this exciting step is a natural progression on your wealth building journey. At this point, you will really start to watch your money work for you. There are three primary ways you can accelerate your investment opportunities: real estate, the stock market, and entrepreneurship.
Understanding your investment strategy is vital. Real Estate has proven to be extremely profitable. You can earn investment income by renting or selling a property. Through real estate, people are also able to maintain their wealth by purchasing multiple properties that are likely to hold their value.
While real estate can help you secure financial freedom, the stock market can also be a worthy investment opportunity. I started out losing a lot of money in the stock market because I did not have the knowledge I needed to make wise decisions. If you decide to accelerate your opportunities to invest in the stock market, make sure that you do your research. That’s also solid advice for anyone who wants to invest in their own business. From a financial perspective, the goal of entrepreneurship is to create a business that will exceed the income you make in your job. However, you’ll need a strategy and business plan to ensure that you’re investing wisely.
3. Emancipate From Your Job
Financial freedom happens when the money from your assets pays you more than your job. At this point, you can take the exciting step of emancipating from your employer. Emancipation is all about freedom. Perhaps you find your current job gratifying and feel like God called you to the work you’re doing. That’s great! In that case, emancipating from your job may not be the right step for you. Use your discretion and pray about whether this is the right decision for you. If you decide to break free from a job that does not fulfill you, this will be a powerful step in your financial independence journey.
When your decisions are no longer tied to your paycheck, you can start to pursue the things you enjoy and devote your time, talent, and treasure to the assignment(s) God has for your life. Is there a talent He’s given you that you’ve never had time to hone or pursue? I enjoy teaching and traveling. I’ve been blessed with the opportunity to do both through WealthBuilders and as the CEO of Andrew Wommack Ministries and Charis Bible College. My financial freedom has empowered me to pursue these opportunities and bless other people in the process. When you follow strategic steps to achieve financial freedom, it will do the same for you.
4. Donate Excess Money
Generosity is an essential part of financial freedom that some people miss. The Bible shows us just how important generosity is in the Kingdom of God. Take Luke 6:38, which says, “Give, and it will be given to you. A good measure, pressed down, shaken together, and running over, will be poured into your lap. For with the measure you use, it will be measured to you.” For Christian investors, business owners, and ministry leaders, building a donation model in your financial planning is also a spiritual investment.
We are called to be generous in every stage of our financial freedom journey. However, when we reach financial freedom, our capacity grows. There are multiple ways to do this. One simple way to donate is by investing all of your excess income to help advance Kingdom causes. Something else that I’ve enjoyed doing is social impact investing, which focuses on redistributing the money in your assets so that you can invest in social causes that empower people. That’s how my nonprofit organization Tricord Global was born.
When you have a generosity mindset, God can trust you to use your financial freedom to help the people who need it most. At WealthBuilders, we’re dedicated to partnering with God in our giving. Consider joining our efforts to empower Christian entrepreneurs, provide free financial education, and economic support to developing countries. Click here to learn more about how you can help us make a difference in the world through your end-of-year giving.
I am debt free except for mortgage.
How do so find out about how to transfer an IRA to metals?