Financial Freedom Update: August 2017
Welcome to my financial freedom report for August. This is where I go back over the numbers from the past month and see how things went. I realize that what you focus on expands. So I am making a point to introduce a few new parts of my financial update. They are
Financial Freedom Factor
Let’s get started and see what happened this month.
Changes in Total Net Worth
(As I mentioned in the inaugural net worth update. When it comes to monthly reports I’m going a different route than a lot of others. Instead of going through the nitty-gritty of every detail on my net worth statement. I’m taking a macro view so we don’t get bogged down by the details.)
of Earned Income For The Month
The growth in our net worth this month really came from some extra income through freelancing. I’m am starting to take on more freelancing work and all of the money is being saved at the moment. Add on that this site has seem some great growth over the past month it makes for a roller coaster of fun.
This site is also turning a profit every month so that helps. It’s not huge but it’s amazing what a year can do with consistent work. If you are interested in starting your own blog I highly recommend it. You can read up on it here.
Expenses for August
I dont’ know what to say. Our expenses for the month were low. The biggest reason for this is our trip to Disney. Which doesn’t make sense when I say it out loud. Except that it does. Most of our Disney trip was paid in advance of August. So we came home with some lower spending than we anticipated. Ok technically the spending was higher because of the trip, but I counted that into my spending as we made our payments so the hit isn’t nearly as bad as I thought it would be.
Compare August Spending to August of Last Year
One of the great things about tracking your finances for years with Personal Capital or Mint, is that you can go back and see how you did from one year to another.
Our spending was lower than last year because it was done in advance. Such a strange month…
Financial Freedom Report
There are four pillars to my financial plan,
Total Expenses / Passive Income
This is the most important part of my financial plan. My net worth can go up and down, or stay flat. I don’t care. What concerns me more is my financial freedom factor.
This is when you take your expenses for the month and divide it by the income you are earning passively such as income through investments, real estate and business systems.
The idea of this number is that once it equals 1, you are financially free. Anything larger than 1 requires that you either increase your income or reduce your expenses. If the number is below 1, then you are doing even better, because you are taking in more income than you spent in the month.
Based on this month my Freedom Factor is
Slowly but surely this number is getting better. I have a long way to go before I reach financial freedom. If you are looking at your freedom number and thinking “There is no way I can do this!” You aren’t alone.
This doesn’t happen overnight. It happens a little bit at a time, month in and month out. Just like any big goal, give yourself time and permission to go after it.
One Last Thing
If you would rather track your net worth with software Personal Capital or Mint.com are good choices. Both are completely free.
If you are wanting to track your net worth either one is a good place to start. Personally, I absolutely love being able to see my net worth every day as it’s a huge motivator to keep making smart financial decisions.
If you are needing a primer on net worth, you should sign up for our newsletter and get the Net Worth Template I have used for 10 years. It’s absolutely free, plus I’ll throw in some other goodies too.