Today, I will tell you why financial freedom is important and three major steps we took to achieve financial freedom and so can you.

What motivated us to achieve financial freedom?

I and my wife worked in multinational companies in the USA, earned in six figures each. We bought a new house. And before the euphoria settled, our income was cut in half as the employer decided to part ways. The next 3 months were extremely stressful until we resolved our visa situation and found new employment. It can happen to anyone with today’s fast-moving disruptive industries. Lesson – To enjoy life, one needs to be prepared for the unexpected, be financially secured with multiple sources of income.

Where we learnt about financial freedom?

Books, a lot of them. Starting with The Millionaire Next Door, we read ten-plus books and prepared our plan for financial freedom. In three years, we achieved a milestone where our basic needs can be fulfilled without income from our employment. Super exciting, isn’t it?

Three Key Steps to Financial Freedom

Step 1 – Pay off all bad debts.

Debt is money that you owe. Debt is created the moment you swipe your credit card or take a personal or car or house loan.

We not only read personal finance books but also tested numerous scenarios to understand where our income goes. The rigorous analysis taught us to use money wisely so that it works for you and not against you. The only items that you should buy using debt are the ones that increase in value over time e.g. house.

We paid off all credit card balances and closed them. While the cashback is enticing, most of the customers end up paying fees or interest at some point in time. No wonder why credit card business generates huge profit margins for the banks. In the US, on average each active account makes $213 for a credit card company annually, source We also paid off the car loan and were amazed by how much relaxed we felt with reduced bills.It helped us focus on things that really matter.

Step 2 Focus on what you save and invest, not what you earn.

Unfortunately, our schooling system, our friends, relatives are focused on how much money we make (salary in most cases) and not how much we save and invest. I have not seen a family that asked future son-in-law or daughter-in-law about savings and portfolio value instead of salary or package!

To build long term wealth, the only thing that matters the most is how much you save as a family and invest. I said family because it is a joint exercise. You need the support of your partner and kids to set and stick with the budget.


We separated the salary account from the expense account, created a budget with 40% of take-home income and started investing the remaining 60%. After reading the book “I Will Teach You To Be Rich” by Ramit Sethi, we implemented one lesson per month. We saw a huge difference in one year and are excited to continue on the path.

Celebrate every income stream you create.

This is the final step to achieve financial freedom. The cost of not building income streams is aptly described in a quote from Warren Buffett: “If you don’t find a way to make money while you sleep, you will work until you die.”

Every source that adds money into your bank account each month is your income stream. While it takes time to see the impact, you need to have faith and look at the bigger picture when you build multiple income streams.

You may invest money in stock based on your knowledge and risk appetite and earn dividends or invest in index funds and play for the long term. You may write a book and publish on Kindle or create a course on learning sites like Udemy. The opportunities are endless, all you need is the bias for action and patience. We are generating 40% of our passive income from fixed income instruments, 30% from dividend stocks and rest from real estate rentals. And we are actively pursuing additional income streams, more about it in another blog.


To summarize, financially free is an amazing feeling that we enjoy every day and you can as well.

Just focus on three steps, pay off all bad debts, measure what you save and invest not what you earn and celebrate every income stream you create. Simply put you can’t achieve financial freedom with lot of borrowed money, and unless you focus on investment, you will never create new sources of income. We achieved financial freedom in three years, so can you.

Once you are financially free, the opportunities are limitless. It’s your choice whether to continue in job but on your term or quit the job and pick up something you love or just retire and go on vacation.