The Freedom Day Method - Your Path to Financial Independence

FN Intro/Outro: 00:00:02

Welcome to the Freedom Nation podcast with Jeff Kikko. On this show, Jeff shares his expertise in financial and retirement planning from a different perspective. Planning for Your Freedom Day, which is the first day that you wake up and have enough income or assets and do not have to go to work that day. Learn how to calculate what you need, how to generate income sources, and listen to interviews from others who've done it themselves, get ready to experience your own Freedom Day.

Jeff Kikel: 00:00:36

Everybody, welcome to the Freedom Nation podcast. My name is Jeff Kikel, I am your host. And this is a special episode of a new part of the series. Starting season three, I'm going to be sharing with you more and more about what I've learned about freedom day over the last two and a half years of running this podcast. At the beginning, you know, I started to record the first 30 shows, really, it was just me sharing my story a little bit sharing some of the concepts of Freedom Day. And quite frankly, over the last two years, a lot has changed in my life, I'll be sharing some of those experiences with you experiencing my first or my third Freedom Day, which this one was the complete financial freedom. And I want to share with you some of the things I've learned along the way. I'll also be sharing with you what has developed over the last year, almost exactly a year at this point of what I call the Freedom Day method. And really the Freedom Day method is just strictly my interpretation of what the process to get you to Freedom Day is. So I'll be sharing that with you. Today's show is really going to focus around a bigger picture, it's really going to focus around the big picture of what the Freedom Day method is, and how the components of it and then over the next several weeks of shows, I'm going to start breaking those components down a little bit farther. So let's get started with a little story. And this is a personal story of really what got me to this point. You know, if we shoot back to October of 2003, I realized that's 20 years ago at this point. But it's a real seminal point in my life. At that point, I had been in the financial services industry for about seven years, I absolutely loved what I did. I just I got up every day and knew that I was helping people I was doing stuff that I really truly love to do. And I plan to do that really for the rest of my life and plan to do it with the company that I was working at at the time. However, for those of you that know anything about the markets in 2003, was not exactly the best of times, we had started to see the.com Boom, bust starting in 2000, March of 2000. Of course, we all know what happened in September 11 of 2001. So what was already a bad market in a recession got accelerated by the 911 attacks across our country, then a series of other terrorist attacks around the world, and us going into active combat on another continent for the second time and you know, almost 15 years or 10 years at that point. So a lot of things were occurring, a lot of things were happening. And the company that I worked for, you know, God bless them, they were wonderful about saying, Alright, we're going to retain our employees, we're going to keep them on board. We know that this is going to end at some point, and we're going to need them to move on. But by October of 2003, things were looking somewhat hopeless. We had already seen the markets drop 9% in 2,011%, in 2001. And then in 2002, we saw the markets drop another 22%. And it was really not good. In the midst of 2003 it was down assets were down at the company that I worked for, and that you know, of course affects profitability. It also affects the ability to pay a lot of employees and it was announced, or the word started to come around in October of 2003 that the company was going to be faced with doing some layoffs that led to you know, everybody the rumor mills all around saying, Oh, I don't know who's gonna get laid off. I don't know who's getting laid off. What I learned later from inside baseball was literally everybody In the building that I worked with was going to be laid off, and then they kind of adjusted it a little bit. So I was working with some of the most high net worth clients that the company had, and was managing a portfolio of those clients that were in more rural areas. So they were in places like Iowa, Indiana, more in the rural areas, not near the cities, and basically managing those relationships over the phone occasionally meeting with them in person going out and meeting with them. Most of the time, it was over the phone, but good relationships, very profitable customers. So you know, when when the rumor mill came out about well, you know, we're, you know, there's going to be layoffs, we pretty much figured the small group of us that were working with these clients, we were pretty much safe. We were working with high dollar clients. Well, unfortunately, one of the people that was making these decisions really had no, no interest in having us on board, he thought that it could be handled all by other people. And we were just a very costly expense mistake, but I didn't get to make that decision. So on October 2 2003, which is also my dad's birthday. So that's why I remember it. I walked into work that morning, our director calls us into a meeting and we were all thinking, Okay, well, she's just bringing us in there to kind of calm things down and say, Well, you guys are okay. And it turned out that we weren't, we were the first people that were laid off out of any out of almost 1500 employees in the building, we were the first 15 that were laid off that morning. And we were given a decision, we could either leave the company and take one weeks severance for every year we'd been there. So I would have gotten seven weeks severance, which, at that time, the jobs in the industry weren't out there, I would have had to probably go into a different job, and not really be where I was at. So I decided to write it out and take option number two, which was to take a 40% pay cut and basically become my assistant, the person that was working with me helping me to manage the clients. And I that's what I had to do. I was the breadwinner for the family. It certainly 40% Pay could hurt, but we would figure out how to make it work. So came home told my wife this, we made the decision, okay, that I would stay on board. And we'll just kind of wait out what happens in the markets, eventually things would get better. Well, our clients complained that the people that had been assigned to them just all of a sudden disappeared. And about three weeks later, we were called back and our positions were reinstated with the understanding that you basically have a year to find another job within the company. We'll assist you wherever we can do it. However, you know, you're in a year your position is gone. So yeah, basically came back came back to work. But that moment had a pretty drastic effect on me. I went from being the company man, the guy who was gonna stay there forever to okay, you don't own me anymore, you can rent me at that point. And I had a little bit of a different attitude about what work really was, I really started to look at work as a means to an end and not really, you know, I work to live not live to work anymore.

Jeff Kikel: 00:08:38

And that went on through multiple jobs within the company where I was at, I stayed there for another 10 years. And during that time period, I kind of lived for vacations and weekends. You know, my wife and I by that point, I had four years or for basically a full month of vacation, plus holidays. And my wife and I spent every last second we could on vacation, traveled all over the world did everything we wanted to do. Every weekend, Friday was like super happy day because I was done with work. I could go home on the weekends, I could forget about work, except Saturday or Sunday afternoons, usually about three o'clock in the afternoon, I started thinking about getting up and going to work the next morning. And I would get this feeling in the pit of my stomach that oh my god, I'm gonna go in again and they're going to lay me off or I'm going to have done something wrong and get fired. And I went through this for many years and I was had tons of insomnia, could not sleep Could not you know, I would just feel sick to my stomach. Probably would have been smart to talk to somebody about this, but I just kept it internally. And I did that I live that life which I don't really consider reliving I can being scared to come into work is not a way to live a life. So like I said, but that went on for about 10 years, I eventually left that company went to work for another company thinking, this will make things better. It still was the same way, I still had that same feeling in the pit of my stomach. I still was living for vacations and really not interested in growing. You know, I was motivated, but I wasn't interested in growing my career at that point. I knew something had to change. Well, that had to change was in 2015, I wrote my first book. And when I wrote my first book, I was looking for a way to market it. And how I decided to market it was a podcast. Now I had never listened to a podcast up to that point. I really hadn't watched YouTube, YouTube was still kind of in its early stages. Even podcasting was kind of in its early stages. Not everybody had a podcast at that time. And I figured well, let me learn a little bit about podcasts. So happened to buy a book was written by a gentleman named John Lee Dumas. And I started listening to John's podcast. And John, at that time was doing a once a day podcast interviewing entrepreneurs. And so he would come on. And really the first let's say, 30, to 35 shows were some of the, like early generation, people that were making it on the internet, and we're making with podcast, people like Pat Flynn, a lot of those caliber of people that were just getting started. And John was really interviewing them. And so I started listening probably about two years into his show, I became obsessed with listening to it, because I was hearing these stories of people who are no different from me. Many of them had professional careers like I did, but we're making great money. And they decided that they wanted to go off and start their own businesses. So I began to listen, I began to take into account mainly to learn how to do a podcast. But in the end, what it trained me to do, I called it entrepreneurial brainwashing, I listened and listened and listened to all these people who were succeeding. And I decided I have to do that I have this opportunity, I was in my mid 40s. At the time, if I waited any longer, it would be very difficult to do because the money situation wouldn't have been there. And I had to make a decision. Okay, I need to get out. And that getting out led me to a business idea, which was to open a co working space. Now I had worked in the financial services industry, I was at that time working for a financial services firm, registered investment advisor, I'd gone through a couple of companies at that point really looking for the the next there there. And I ended up making a making a decision that I was going to leave working for my safe job and go out and start my own financial practice and also start a co working space. While the co working space was mainly my first idea, but I wouldn't have been able to keep working for the financial firm that where I was at. So I kind of had to start two businesses at one time. Not the best idea, really didn't have a book of business either at that time. So I was really starting from absolute ground zero, and having to build from there, which was very challenging. But I knew that that was the right thing. And March 1 of 2015. I may or 2016, excuse me, I made the decision to leave my job and go full in you know, basically burn the ships at the shore and launch my own individual business, or two businesses, financial practice and my co working spaces. And it wasn't all easy. In fact, it was very difficult for the first couple of couple of years. I didn't have a lot of revenue coming in the door. co working spaces were a really new idea at the time. So most people didn't really understand what they were. So I spent a lot of time educating and chasing after trying to find clients and trying to find people to rent the co working spaces. And about a year later, a good friend of mine and I decided to merge our financial practices together and build and we did we very successfully built that over time. That led to many years of growth some years of bad we'll talk about that over the next several episodes. But what it ended up doing is it led me to a couple of things it first led me to Success and monetary success coming in, I was making a pretty good living. And back to where I was before I was making the money I was making before. The biggest difference was March 1 of 2016. That was the first Monday morning that I woke up. I'm not sure if that was a Monday morning, but it was March 1, that I quit my job. But it's the first day I woke up. And I had slept all night, in almost 12 to 13 years at that point. It was the first time that that weekend, I didn't have a feeling in the pit of my stomach. And it was the first time that I felt like I had control. So I was able to identify now if I look back, one of the freedoms and there's three freedoms that we've discussed on the show before, the first freedom is time. So I owned my time at that point, I was able to do what I wanted to do when I wanted to do, I didn't have to answer to a boss. I just got up every morning and worked. And it made me feel like I was years and years and years ago, when I first started in the financial services industry. I couldn't wait to get up and go to work every day because I loved what I did. And I was back to that I was loving what I was doing again. And I was doing it kind of in two different ways. I was doing it as a financial advisor. But I was also doing it as a business owner and entrepreneur, and it made me feel alive again, for the first time in forever. So I found my time freedom, I was able to control my time. The other freedoms, of course, we'll talk about as we go. But the other two freedoms are financial freedom, which is what most people think, when we talk about Freedom Day. But the other freedom is freedom. You know, basically, it's the freedom to be intentional about life and live an intentional life. What we've talked about before on the show is a bucket list, we'll discuss that in more detail. But that's what I consider living intentionally choosing things that I want to do before I die. And making sure that I actively and intentionally go after those things. And, you know, knock them off the list, not for the fact of knocking them off the list. But knowing that I'm living an intentional life versus a life where I'm just kind of wandering through it like I was, I was basically wandering through life like a zombie, I really had no drive no ambitions. I was a hard worker, I always will be. But until that, you know, until that point where I started to work for myself. And I also burn the ships at the shore. That was the first time ever in history where in my history where I felt like I had control. And that control allowed me to redirect myself. And even in times of trouble and difficulty, we still were able to get through it because I knew that I had control of it. And I could figure it out, I could use my creativity to get there. So let's talk a little bit about Freedom Day. So Freedom Day came about in probably 2018 ish 2019. I've been working with clients for you know, at that point, almost 20 years, 2223 years. And I realized that people that I was talking to started to be a little bit different. They didn't have the same look on their face when we were talking about retirement. So if they were younger, let's say millennials and Gen Z years, and maybe some young Gen Xers, when we would have a conversation about retirement, which for some may be 30 years away, some may be 40 years away. They're just wired a little bit differently than some of us. I would talk to them and they would say, Well, yeah, but that's 3040 years away. I want to live life today. I don't want to postpone my life. I don't want to work like my parents for 40 years have multiple recessions during that time period where they lost a lot of money in the stock market. And and really are at the point where they they just kind of are lost and aren't sure if they're going to be able to retire. I don't want to wait for that. I don't want to postpone living life for 40 years scrimping and saving just so that I can buy a crappy house or downsize my house, buy a crappy car, wear black socks and sandals and take one cruise per year. I don't want that I want to live life now. Which if you follow the traditional philosophy well if you live life now and you spend money now, then you're not going to have enough money He later on in life. So then the opposite, I would talk to their parents, people that were baby boomers, people that were kind of my age. So like the beginning of Gen X, who were getting up at that time into their 50s. And starting to look at that retirement that, you know, seemed 40 years away just two or three years ago, and now is like 15 years away, and the reality of the ability to save the amount of money that needed to be saved. You know, so typically, in the financial services industry, we tell people, well, you can, you know, you have to save X amount of dollars, so that you can get X amount of dollars. So typically, you know, if we would say somebody needed $80,000 a year, you do the math unless they have so security, which most people do, or some kind of pension, they're going to have to do most of this by themselves. And that's going to require that they have roughly about a million dollars per $40,000. So if you need $80,000, and you have no other sources of income, that's $2 million portfolio that you need to have. And most people that we would work with, might have had a half million dollars saved, sometimes a lot less than that. And just the math wasn't working. And it's true. The math doesn't work. In a lot of those cases. Why does the math not work? Because it's based on building of assets. And I'll talk to you why I believe that the traditional world is broken a little bit down the road. But one day, I was sitting down with a client who had planned well had done well, they didn't really spend a lot of money, they'd saved a ton. And I sat down with him. And I looked at him in the face, and I can do the math in my head. I'd been doing it for 20 some odd years, I could do the math in my head, but we put it into the financial planning software. And I looked at him square in the face. And I said, Well, you're at you had your Freedom Day, a few years ago, and they looked at me funny and said Freedom Day. And I said, yeah, the first day you woke up, and you didn't have to go to work that day. And they got a little grin on their face. And I said, Yeah, you've been going to work for the last two years. And you didn't need to you didn't have to you did it because you wanted to not because you had to. And that was a huge change. For them. That was a huge move. And I could see the change in them as a result of that when they realized all the weight was off their shoulders, and they had made it Life was good. They were going to make it there. Well, fast forward a few more years, I kept having that kind of conversation. And I kept even sharing it with people who were younger. And I would talk about Freedom Day. The difference between saying retirement and saying Freedom Day was simply the fact that freedom day when you think about it, work optional lifestyle. That sounds like I actually have some control over this retirement has this time bound thing. Retirement is well, you've got to wait until you're 6566 67 to actually retire. Freedom Day says, Well, if you can make some changes, and you can do some things differently, you can actually get there a lot faster. Now, I will tell you my personal goal. When I first got into the financial services industry in 1994, I actually or 9095, I actually set a goal for myself that by age 55, I wanted to be fully retired. That was my goal. I knew if I saved hard and I worked hard and I did everything I needed to and I followed the rules, I would get there. Well, somewhere around 38 to 40, I realized that that wasn't going to happen. I was about 15 years away, I hadn't saved enough at that point. Other things happen that required me to use some of the money that I would have normally been putting towards retirement, and it just wasn't going to happen. And then I went started my own businesses and you know, of course wasn't able to save. In fact, I had to pull money from my investments at a time when you know, I should have been saving more if I was going to retire at 55. So I pretty much given up on the idea of of this whole process. Well, fast forward, I started to talk more and more about Freedom Day. And then as I realized it, I was kind of working my way towards freedom day in my own life. I had built very successful businesses by this point, you know, let's say 2019 ish. I already had six businesses running that I had started some better than others

Jeff Kikel: 00:24:48

some making me a lot of money, some making me nice, consistent money, others, they were kind of chugging along. The problem was I kept starting new businesses because I wanted more money instead of Just focusing on the ones I had. But I was building and building and building I was building these assets that were generating and kicking off income. Most of it was active income, though, it was income that I had to be involved in, I was in the middle of everything, and I was running out of me. At one point in time I was working on average, about 80 to 85 hours a week, I would get up at six o'clock every morning, I literally walked downstairs, feeder animals make coffee sit down, and I would start working and I'd work for a couple hours, before I went to work, I would go to work at let's say, 738 o'clock, I would stay until six 630, come home, have dinner with my wife, pick up the laptop, sit there in my chair, watching TV and working for another three to four hours. So typically, by 11 o'clock every night, I was kind of dead, stop working, went upstairs watch TV for about a half an hour collapsed, woke up the next morning at six o'clock did it all over again. So I was working this constant thing of I was on this constant treadmill because I kept increasing the amount of active work that I was doing. And I was starting to run out of me to be able to do it. I was not delegating my authority. I was creating businesses that I had to be involved in the middle of. Well, that was the point where I started to develop the concepts of Freedom Day, because I knew I wanted to create my freedom day. Because I had created a freedom I created a time freedom. But I didn't create a monetary freedom. Because everything I was doing required my active participation. Yes, I was making good money. But it all required my active participation. And if anything were to happen to either me or those businesses, my income went away, immediately. Fast forward to march 2020, and COVID hit now owning co working spaces and a COVID crisis where we were shutting down buildings, people were staying at home, they tend not to want to come into an office. So we began to experience people bailing out on us, they were leaving in droves. People that had long term or had lease contracts with us just said, Screw it, I'm not coming in anymore, and I'm not paying because the world is ending and you know, we're going to be done. Well, we still had to be open. We haven't we marriage mail for about 170 companies at that point, and we needed to be open. So being me being me and my wife being her, we pretty much laid our entire staff off and her and I ran the co working spaces, along with the financial practice and a couple of the other businesses that I had at the time by ourselves. And the difference was, you know, from a financial practice perspective, I no longer had to drive all over town to go visit clients and visit them up their offices or their homes, because nobody was going out and we couldn't meet in person. So we started to do zoom conversations. Traditionally, before that, we might have had one or two clients that we had a zoom conversation with the rest of the time, we were actually going out and meeting with clients. So in Austin, if you know anything about the traffic there, at what could be a 10 or 15 mile trip can take an hour because of traffic depending on the time of the day. So you might be only able to meet with two or three people during the day, all starting with COVID. Now all of a sudden, we were meeting my zooms, and those zooms would only take an hour and I could pack six, seven of those things into a day now. And we would got we got through all of our clients meeting with them. We built new clients, we actually had the best year of practice that ever add, because we're so much more efficient at what we're doing. And people were kind of getting to that point, those people that were at the law at the later end of the spectrum, were saying, Alright, it's time to actually stop working. At this point. I want to sell my business. And so many of those people decided to retire. So we had lots of people to work with a lot more efficiently. The co working spaces, you know, we decided that to do the cleaning that was required at the time we would open at nine and close it for and that gave us some time afterwards to do cleaning after work and before work to do cleaning. Well as COVID laid down a little bit or relaxed a little bit. We started to realize our I started to realize, man, I don't really need to get to work before like nine o'clock in the morning or get stay belong or longer than four. And so I just did my schedule and I realized that I actually had a life Outside of work, and effectively cut my work schedule in half. But I had the best year in both businesses, my two primary businesses, I had the best years ever, in those primary businesses, you know, because of that, because I think I wasn't, I was able to focus more on being efficient with my revenue. So during that time period, I started to think about, well, what is Freedom Day? And how do you get there. I knew in my own life that I got there through investing in real estate. I got there through building businesses, successful businesses, some investing, certainly, that's what got me to where I was at. But it was a combination of things. And it was an aha moment, when I realized that if I could adjust my income from being active, to passive, and I could put in more passive income, I could actually get to my personal freedom day. So I began talking about that. And I started to begin to codify what Freedom Day was or what that process was. And that led to 2022, I was really actively working on building all of this, and my business partner realized that we were kind of going to different routes, he wanted to build a more traditional wealth management practice, I really wanted to begin to educate people on Freedom Day, and that just didn't work with the brand. And so he decided to buy me out. Initially, that was a, it was a shock. To me, it was kind of an existential crisis, because I all of a sudden felt, what was I going to do? I mean, I don't know what I'm going to do. I've done nothing but financial planning for most of my career, all of a sudden, now I don't really have that thing that I had built. And I went through the stages of grief effectively at that point.

Jeff Kikel: 00:31:59

The best thing that happened out of that is the week after we had this conversation, I was invited on a trip from one of our vendors, I spent a week away from everything away from the businesses away from my spouse, locked in a room, really not wanting to talk to anybody at this event. But it was a beautiful place. And it gave me a ton of time to think about what I wanted, and what Freedom Day really was. And that was it. So in my life, my Freedom Day was July, My Financial Freedom Day was July 1 2022. That was the first day that I had a work optional lifestyle, it took a while a little bit longer to realize that in reality, but from that point on, I launched my new business, I launched Freedom Day, and I put my face into it, and work to really codify it and put it into a system or a method. And that method became what I call the Freedom Day method. It's a series of things do you do to reach your Freedom Day? So let's talk a little bit about that. Now. The first step in the Freedom Day method is that you have to build a realistic budget. I realized all along, I was letting clients lie to me. I was letting them tell me Oh, yeah, well, I spend like four or $5,000 a month. Okay, fine. You make $10,000 a month, you spend 4k, there's $6,000 difference there. Factor in some taxes. Let's back that out a little bit. Maybe let's call that an extra $1,000 a month? What's going on with that other part? Oh, well, I you know, I've saved some of it. Okay, great. You're saving. But you're only saving about $500 a month, where's that extra little bit? Well, that extra little bit is all that creep that they don't even remember that they're spending. They're just going out there and they're spending and they they're giving you a non realistic budget. So one of the key things when I work with a client now or when I teach people the Freedom Day method, I have them stop lying to themselves, stop lying to me and build a realistic budget. I want you to write out every single thing you spend money on one time, I don't expect you to have to, you know live your life looking at this budget every minute, but I want you to give me a realistic budget of where you're at today. And what we're going to do with that budget is we're going to back into what your minimum required income as what does that mean? What your minimum required income is exactly what it takes to live your life every day. Without all the fun stuff and all that it's just basic necessity. Here's what it takes to run your life. And once we know what your minimum required income is, that allows us to help figure out what Freedom Day is going to be. So there's several different methods of doing budgeting. We'll talk about that on a later episode. But just know, there's basically three ways of doing budgeting, you can do what's called a 5030 20 method, which basically says that 50% of my money that comes in goes to essentials 30% goes to discretionary spending, the fun stuff, and 20% should go towards some form of savings. So very easy budget to run, we have a, you know, on our website, we actually offer a worksheet that works this way, you can actually go through and build a budget this way. The second way is what's called zero based budgeting. This is very prevalent in the Dave Ramsey system. zero base budgeting basically says, you account for every single dollar that comes in every month, every dollar has a name. And every dollar has a purpose, and it goes there. And so you manage more directly to alright, I'm giving myself $200 for utility spending. And if I spend, you know 285, that extra $15 is going to get pointed to something else, typically either to reduce debt, or to go into savings. The final way is what's called the envelope system, I'm not a big fan of it. But for some people it works. And that literally is having a bunch of envelopes, you get your money in from your paycheck, you take it out of the bank, you put it into all these different envelopes that have different purposes. And you use that money to pay off your your debts or whatever. Or pay off, you know your expenses. One, I don't like using cash, too, it's a really easy way to lose money, because you can literally lose money by dropping the envelopes or something like that. So I've never been a big passionate fan of it. But it does work for some people. And you need to understand that the next piece of the pie as we're trying to calculate our minimum required income, a piece of that, if you still carry debt, and let's kind of lay out two different types of debt, you have good debt, and you have bad debt, good debt, mortgages.

Jeff Kikel: 00:37:29

Student loans in some aspects are good debt because while one you need a place to live, so having a mortgage, pretty much locks in my cost. Besides taxes going up, my cost is pretty predictable. And over time, that's going to be less than less of my income, but it's going to stay the same. The payment will stay the same student loans. Theoretically, I've used debt in that case to leverage a career, or I'm making more money than I would have not. Now we've all we all hear stuff all the time about people going and getting a degree in underwater basket weaving and then getting out and saying Why can't find a job. There's not a lot of underwater basket weaving out there that pays a lot of money. And you just spent 80 $90,000 on an education and underwater basket weaving. So you can get yourself into trouble in those cases. But if you if you've used debt correctly, in that case, it's allowed you to get a job that makes you more money than you would have if you hadn't gotten an education. And you can use that to pay that money down. Now doesn't mean everybody has to go to college. I'm just saying that right now. So don't don't hate me because of it. I believe that some people shouldn't go to college, and they should just get out and start working right away. But for those of you that did, and you have student debt, let's calculate that as good debt for now. Bad debt, consumer debt, cars, credit cards, all that type of debt, we want to eliminate first. So that's the next phase of this, we we've now figured out our minimum required income. We've figured out you know, of that MRI, if there's any debt, we're going to attack that debt. So all of our bad debt, we're going to attack first. So how do we do that? Well, we're gonna do what's called a debt snowball, and this comes back from the the Dave Ramsey days. I've been a Dave Ramsey adviser for years. So I've worked with a lot of people that have done this very effectively. Basically, what a Debt Snowball is, is you write down all of your debts in order smallest to largest. And what you do is you make minimum payments to all of those, whatever money that you have left over at the end of the month, or at the beginning of the month, which you buy budget for that is over and above those minimum payments you use to attack the smallest debt first. So you apply all of that money to the smallest debt first. Why do we call this a snowball? Well, because if we attack the smallest debt, and we're able to knock that out in, let's say, two or three months, we have momentum. So now whatever you were paying minimum payments of that small one, plus whatever you are paying to pay it down, now falls back to the next step in line, and the next step in line and the next step, and that starts to speed up, and you start to be able to attack those larger dollars as a result of it. So we're eliminating debt, and you can never be financially free with debt, bad debt, good debt, houses, you can be financially free and just have a house payment. So we want to eliminate that debt. Now, let's talk a little bit about the next phase of this. We want to start to do something that I I found late in the game, a bucket list. So I told you I went to that event out in California was all by myself. One of the things I received at that event was a bucket list journal. And I sat in on a session where a gentleman who had created that bucket list journal told his story. His name is Ben Amitin. And Ben told his story about being very well recognized rugby player went through a bout of depression, and anxiety to the point where he could no longer play, really, his life was kind of over and some friends of his also kind of feeling the same way decided that they were going to help each other and they were going to create a bucket list a list of things that they wanted to do before they die. And one of the things on their list was they wanted to create a TV show while they created this show called The the buried life that was on MTV for two seasons, and it was them driving all over the United States, living out their bucket list and helping other people to live their bucket list items. So I actually calculated our I did my bucket bucket list while I was out there. And it was such a freeing experience. And I realized that was the problem that I had had all along when I was working with people with retirement. Remember, most of them, you know, if they were older, they realized, Oh, crap, I'm going to have to work forever. And the people that were younger said, Well, I want to live life. Now. I want to Yeah, I want to be able to enjoy life now.

Jeff Kikel: 00:42:39

And the difference between that and that long term retirement was there were very specific goals, time period goals, very specific things that they wanted to do and very specific costs. And that was the aha moment. For me that was that final piece of Freedom Day was, we all need to have a bucket list and not wait until the end of our lives. When we're going to kick the bucket. We want to have that bucket list. Now we need to be using that bucket list as a tool. And we want to basically take our whole bucket list mine has 100 different items on it. And it changes because I'll mark things off, and I'll add things in. And sometimes I'll realize, well, that was just really dumb. And that really, it wasn't something that I needed to do before I die. It was just because I was running out of things to write down and I constantly am updating my bucket list. And I'm constantly looking at what can I do on that list. Over the next six months, I set these goals for myself. And then I look at it and say, Okay, right now today, I cannot afford this, I'm not going to take money out of my savings, I'm not going to take money out of my investments, I'm not going to take money even out of my paycheck that's coming in from my business. I am not going to do that. So I'm not going to say well, I'm I can afford that by putting it on a credit card. I'm going to say how can I afford that. And I'm going to create some method to pay for that. So we want to prioritize on our bucket list about two to three items, maybe four that we can focus on for the next six months, then we're going to figure out a way to get to that point. And this is the first thing that starts to retrain your brain. If you've been somebody who has worked for a paycheck most of your career like I had at that point. All of a sudden it gets really scary when you think of having to make a paycheck. So if you do like I did, which was really scary thing, quit your job and just burned the ships to shore and go I could have blown everything up and quite frankly got very, very close to losing my house blowing everything up financially getting into major financial trouble, because I didn't really plan and I really didn't rewire my brain the right way. So I want you to rewire your brain the right way, I want you to look for ways. So let's say you have an item on your list, that your bucket list that's $400 $400 is not a big scary, you can make $400 pretty easily. Go drive Uber for a week or two, you can make $400 deliver food, go work at a, you know a play someplace, just go work and make $400 and then use that to pay for your bucket list. Now, if you're smart about it, you're going to do something that is a sustainable $400. Because there's probably other things on your list. Like, I'll give you an example on mine. So when I analyzed my bucket list, I realized that I had 12 items on my list that had to do with planes, trains, or automobiles or boats. I love anything that goes fast. I love anything that is machinery wise. And I had a whole bunch of things on my list of things that I wanted to do everything from driving a Lamborghini, at the Kokoda track here in Austin, the Circuit of the Americas, to flying on a world war two bomber to other kind of driving courses and things like that, that I wanted to do. I wanted to ride on a cigarette boat in Miami. Well, I started to calculate it up. And most of those items were around four to $500. So all of a sudden, I realized, wow, that's really only four or $500. And if I broke this out over a year, I only really need to come up with an income, an extra income of $400. Well, that's not a big scary, I can figure that out. Well, I actually bought a piece of property that generated $400. For me, I took some money out of the sale of my business bought something that pays me $400 a month. And I've been using that for the last four months to knock things off my bucket list as I've gone. So try retraining your brain to think about not how can I afford this, but what can I do to afford this starts to retrain our brain. And it makes us think differently about life. And if you've been a paycheck paycheck person, all of a sudden life is way, way, way different at that point. Now, once we've done that, once we've begun to understand, and we've retrained our brain, we've created what's called I call a freedom engine, it's something that continually is going it's probably something that's very active, where I'm involved, I have to do something to get that money, but it's generating an income stream. What I want to start to learn, though, is what I later learned that I only had a limited amount of time, I had 161 hours just like everybody else every week, but I only had a certain amount of that time that was extra beyond what I was doing to be able to generate additional income. So I needed to do things that I didn't need to be actively involved in. So I started to look for and this is what you are going to do is you're going to start to look for assets, that buying assets that generate a passive income. Now there's four primary vehicles that you can use to do this. One, start a business like I had done all along, you begin a business, you start it, I built businesses from the absolute ground up, you can buy a business, so you can actually buy a franchise you can buy someone's business, or you can go in, it's already running. It has procedures and policies and everything else, much different from when I start one from Ground Zero, there's no procedures and policies, but you can buy one that's existing, pay some money for it, and begin to run it not as an owner operator, but as an owner of the business, you're not managing the business, you own the business. Another way to do this is real estate. There's tons of different ways you can make money in real estate, you can generate income from that, that is passive income. Sometimes you start with active income, and then it transfers to passive income or you may be doing rentals, you may be doing short term rentals, mid term rentals, long term rentals, where you're not actively involved in it, you might pay a management company to manage it for you and you are just the passive owner of the properties at that point and you're getting all the income and that you use. So that's creating an asset. Now there are some investments that if you have some money you can invest in that will generate a passive income for you down the road and sometimes they're outside of The realm of the typical stocks, bonds and cash that I was trained to work with people and I work with people with a lot of different strategies that I developed on my own world I've used for clients, where they can generate a passive income stream much higher than they would be from a traditional investment account. So now you get passive income, you generate that passive income when that passive income reaches 125% of your minimum required income from step one, remember that we've we've started all that back at the beginning, once 125% of that minimum required income is made through passive income, you now have a work optional lifestyle, you've woken up that morning, and you didn't have to go to work. That's the magic number. That's what Freedom Day is, that is your freedom day 125% of your minimum required income, and you are free. Now, people ask me all the time, all right, well, I'm okay, I'm at Freedom Day, do I quit my job at that point, or what if I like my job? Well, that's the decision point where you're at. At that point, you need to decide, do you like what you're doing, if you love what you're doing, then keep doing it. The difference is, you got up and went to work that day, and you didn't have to you did it because you wanted to. So you get to enjoy life. And if you love what you do, you're probably going to be the greatest employee ever, because you're just there because you don't have the money risk or the money monkey on your back anymore, you now are free, you don't have to worry about money anymore. And you're just working because you love what you do.

Jeff Kikel: 00:51:50

Now, if you hate what you do, you're probably not going to be the best employee, you are probably going to be the employee that one or two things is going to trigger you and you're going to just tell him to go pound sand, and you're out of there and you're not going to work anymore, or not work there. Now, what does that mean? Do you just goof off? Do you do whatever you want? No, you've got to find some ways to fill in your time. Maybe that is that now that you've built, you know, your 125% passive income, maybe it's time to now spend more time on that those passive sources not becoming active, not getting yourself in the middle of them. But finding ways to increase the amount of passive income that you're receiving. In addition to that, you might be doing some things that you've wanted to do. When I coach big business owners, you know, they'll tell me, oh, yeah, when I retire, I'm gonna, you know, I'm gonna play golf all the time. Okay, well, you know, typical golf round is five hours, you know, if I'm 50 or 60 years old, I can do only about 18 holes a day. So that's five hours a day, out of a 1617 hour day, what are you going to do for the other 12 hours? And you're not going to probably play golf seven days a week. So what are you going to do during those time periods? Well, I'll volunteer my time. Great. I think it's a wonderful idea. Let's go out and let's figure out what you're going to do. You're going to, you know, go out and volunteer your time, let's say, half days, twice a week, well, that's only about 10 hours, maybe, maybe less, six hours. Okay, you still got a ton of hours left. When a business owner does that. What do they usually end up doing? They go on, I go back and start another business. You are might go, Oh, I'm gonna go get another job. Or I'm going to do something like that. And get yourself to the point where you go back into that paycheck mindset. So you need to start thinking about what you're going to do to fill your time, what are you going to do to live that work optional lifestyle? Well, you might fill it in with some travel might fill it in with, you know, writing the book that you've always wanted to do, you might fill that in with starting a podcast, doing a YouTube channel, fill that in with creating some kind of product that you can sell on the internet. All those things are available to you. Maybe you decide to start a second career. And that second career you're starting and you don't need the money. You're just doing it because you love it. It's all up to you. But you have to make that decision. You have to make the decision to quit your job or not. I'm not telling you, you have to. So that is the Freedom Day method. It's that simple. It's really not a lot of complicated steps. It's the advice that your grandmother may have given you, your parents probably not. Because your parents probably came from that generation like mine that said, go to school, get a good job, you know, work there for 40 years, save money and then get done and I just didn't want that in my own life. And I, you know, I've seen more and more people that haven't wanted it in their life. And what's the result in my own life? Well, remember, I told you that the one goal that I had my biggest financial goal was that I wanted to be retired by the time that I was 55. Well, I just turned 55 This last December. And I have a work optional lifestyle. I'm not retired, I'm not going to retire. But I have a work optional lifestyle. Some days, I wake up, and I go, I don't really want to work today. And there's days I've gone into the office thinking I was going to work, and sat there and surfed the internet during the day, or left work early and came home and did a project around the house or something like that. I have an optional work optional lifestyle today. And that was my freedom day. So I control my time. I now have a work ops and a lifestyle. And with my bucket list, I have an intentional lifestyle. I am doing things intentionally to live out those things that I before would have repressed because either it seemed like it was something that wasn't possible for me to do. Or it was something that I gave myself the excuse of not doing because I didn't have the money to do it. Now I look at it and say if it really means that much to me, I'm going to figure out how I'm going to pay for that. And that's what I want you to do. So I hope that you learn something from this today, I hope that you're able to continue along with us. Make sure that you subscribe to the channel, whether you're listening to this on the podcast, or you're watching it on YouTube, or any of the other video channels, make sure you subscribe. I would love your comments on this good or bad. Just realize if you're if you're going to put bad comments on there, I'd have full right to come back at you a little bit. If you're gonna if you're gonna mess with me a little bit. I'm gonna mess with you a little bit. But I want your comments. I want to hear what you think about this. I want to hear you know, maybe one or two of your big goals that you have that you know are your Freedom Day goals. So thanks a lot. I'm glad that you're part of our tribe. Make sure that you're you maintain connection with us here at Freedom nation, because we want you to continue to be part of our tribe. We want to hear your success stories as we go. So thanks a lot and we will see you back here the very next time.