The FIRST Step to Financial Freedom with Sam Dogen

Posted on 4/13/2023, 5:52:34 PM

Financial freedom is a goal that many people strive for, but not everyone achieves. Achieving financial freedom means having enough passive income to cover your expenses and live life on your own terms, without the need to work a traditional job. While it may seem like a lofty goal, it's achievable with the right mindset and a plan in place.

To learn more about achieving financial freedom, we spoke with Sam Dogen, the founder of Financial Samurai, a personal finance website that helps people achieve financial freedom sooner. In this article, we'll discuss the first step to achieving financial freedom, as well as some tips and insights from Sam.

The First Step: Establishing a Strong Financial Foundation

The first step to achieving financial freedom is establishing a strong financial foundation. This means creating a budget, building an emergency fund, and paying off any high-interest debt. As Sam explained, "Establishing a strong financial foundation is important because it creates a strong base for you to build upon. Without a strong foundation, you'll be more susceptible to setbacks and it will be harder to achieve your financial goals."

Creating a Budget

The first step to establishing a strong financial foundation is creating a budget. A budget is a plan that outlines your income and expenses, allowing you to see where your money is going and make adjustments as needed. Sam recommends following the 50/30/20 rule, which means allocating 50% of your income to essentials like housing, food, and transportation, 30% to discretionary spending, and 20% to savings and investments.

Building an Emergency Fund

The second step to establishing a strong financial foundation is building an emergency fund. An emergency fund is a savings account that you can use to cover unexpected expenses, such as car repairs or medical bills. As Sam explained, "Having an emergency fund is crucial because it gives you a safety net in case something unexpected happens. It also helps you avoid going into debt when you face unexpected expenses."

Paying Off High-Interest Debt

The third step to establishing a strong financial foundation is paying off any high-interest debt, such as credit card debt or personal loans. High-interest debt can be a major barrier to achieving financial freedom, as it can eat up a significant portion of your income and make it difficult to save and invest. Sam recommends using the debt snowball method, which involves paying off your smallest debt first and then moving on to the next one. By focusing on one debt at a time, you can gain momentum and make progress more quickly.

Tips and Insights from Sam Dogen

In addition to establishing a strong financial foundation, Sam shared some additional tips and insights for achieving financial freedom:

1. Start Investing Early: "The earlier you start investing, the more time your money has to grow. Investing in a tax-advantaged retirement account like a 401(k) or IRA can help you build wealth over time."

2. Live Below Your Means: "Living below your means means spending less than you earn. This allows you to save and invest more, which can help you achieve financial freedom sooner."

3. Take Calculated Risks: "Taking calculated risks can help you achieve financial freedom faster. This might mean starting a business, investing in real estate, or pursuing a higher-paying job."

4. Stay Focused on Your Goals: "Achieving financial freedom takes time and discipline. It's important to stay focused on your goals and make small, consistent progress over time."

In Conclusion

Achieving financial freedom is a worthy goal, but it requires discipline, hard work, and a plan in place. By establishing a strong financial foundation, starting early with investing, living below your means, taking calculated risks, and staying focused on your goals, you can achieve financial freedom sooner. As Sam Dogen said, "Financial freedom is not about being rich or having a certain amount of money. It's about having enough passive income to cover your expenses and live life on your own terms." By following the steps outlined in this article and taking the advice from Sam Dogen, you can take the first step towards achieving financial freedom and living the life you want.

Remember, the first step is to establish a strong financial foundation by creating a budget, building an emergency fund, and paying off high-interest debt. Once you have a strong foundation in place, you can start investing, living below your means, taking calculated risks, and staying focused on your goals. It may take time and hard work, but achieving financial freedom is within your reach if you take action now.