“It takes talent to make money. It takes brains to keep the money.” — Robert McCall
What to Do to Become Financially Free? How to Get Out of Being Broke? I have consumed content of many millionaires and this is what I have learnt:
Do You Really Have Nothing When You Are Broke?
First, remember this: even if you find yourself broke, you haven’t lost your most valuable asset. Your finances might be gone. The business you built might seem like it has disappeared. Everything you’ve worked for may feel like it’s vanished. But here’s the truth—it hasn’t.
Your most valuable asset is the knowledge and experience you’ve gained. The skills and understanding you’ve acquired to build success are still with you. That knowledge stays in your mind—it doesn’t vanish, and no one can take it away from you. It’s the foundation you can use to start again and rebuild, stronger and better than before.
Step 1: Learn Money Management Now
I want to start off by saying that if you’re broke right now and living paycheck to paycheck, you need to figure out why. That’s not an enjoyable way to live, and it’s certainly not comfortable. If you’re in this situation, it means your expenses and your income are the same—they’re equal. And that’s the opposite of what you need to achieve financial freedom.
Your expenses need to be lower than your income, and if that’s not the case, it’s time to figure out where your money is going. You need to get a clear picture of your spending habits.
I also want to point out that money management is everything. If you don’t know how to manage your money now, when you have little or nothing, you won’t be able to manage it when you have a lot. Don’t fool yourself—it doesn’t matter if it’s $100 or $1,000,000 in your bank account. If you don’t build money management skills, the cycle will just continue.
So, invest time into learning this now. Whether it’s watching YouTube videos, reading books, or even asking a friend or mentor for advice, you’ve got to start somewhere. This is the foundation. Financial freedom starts with knowing how to control your money—and it starts right now.
Step 2: Figure Out Your Expenses & Income
Let’s talk about expenses and income. What are your expenses? You should know exactly what they are. If you’re living paycheck to paycheck, you need to figure out where every dollar is going. You also need to know how much you’re earning—it’s the easy part because you likely already know what you make every month. But the expenses? That’s where things often get out of hand.
If you’re living this way right now, I’d argue that unless you’re 100% happy and comfortable with your financial situation (which you’re probably not, if you’re reading this), you need to take a hard look at your spending. If you’re aiming for financial freedom, you can’t give yourself the luxury of splurging on things like getting your nails done, shopping sprees, takeout, or ordering in all the time. These are luxuries, and if you’re living paycheck to paycheck, you haven’t earned that lifestyle yet.
Here’s the bottom line:
- If your expenses equal your income, you’re buying things you can’t afford. You live the life that you can’t afford.
- If you’re using credit cards and can’t pay them off in full every month, you’re living beyond your means.
When a friend calls you up and says, “Let’s get our nails done,” that’s money you should be saving instead. Those little luxuries are exactly where you can start cutting back.
So how do you fix this? You’ve got two options:
- Decrease your expenses – Take a close look at where your money is going and eliminate unnecessary spending. Whether it’s takeout, movies, subscriptions, or splurging on hobbies, find areas to cut back.
- Increase your income – This might mean taking on a side hustle, working extra hours, or finding a way to bring in additional money.
For most people, decreasing expenses is the easiest and fastest fix. Start there. Track your spending, cut back where you can, and redirect that money toward your goals.
If I were in this situation, the first thing I’d do is figure out where I could save. Remember, every dollar you don’t spend is a step closer to financial freedom.
Step 3: Pay Yourself First
If you’ve ever read a financial or investing book, you know this: the most important rule is to pay yourself first.
But what does that actually mean? It means that before you pay for anything else—your mortgage, utility bills, car insurance (all liabilities)—you set aside money for yourself. Why? Because if you don’t prioritize your financial future, no one else will. Paying yourself first is the cornerstone of building wealth and achieving financial freedom.
Here’s the thing: it doesn’t matter how much money you’re making right now. Whether it’s $500, $5,000, or $10,000 a month, the principle stays the same. You need to create a habit of saving a portion of every paycheck before spending a dime on anything else.
How Do You Do It?
- Automate Your Savings:
Set up an automatic transfer with your bank. For example, if you’re earning $1,000 a month, schedule 10% ($100) to go directly into a separate savings account. - Start Small if Needed:
Even if it’s just 5% of your income to begin with, start somewhere. Over time, aim to increase this amount as your financial situation improves. - Designate the Savings Purpose:
This money could be your:- Emergency Fund (your safety net for unexpected expenses)
- Rainy Day Fund (small unexpected costs)
- Investment Portfolio Starter (to grow your wealth over time)
Why Is This So Critical?
This money becomes your security blanket. If life throws you a curveball—like losing your job, an economic downturn, or unexpected expenses—you’ll have something to fall back on. Without this safety net, you risk spiraling into debt or worse.
It’s Non-Negotiable: No matter how tight your budget feels, paying yourself first is a must. It’s the key to building freedom and stability. For example:
- If you make $2,000 a month, putting aside 10% means $200 into savings.
- If you can afford more, do it! The more you save now, the better your future will look.
A Stretch That’s Worth It
Saving might feel like a stretch, especially if money is tight. But remember, this is for you. By not saving, you’re only sabotaging your future. So stretch yourself as much as possible and prioritize this habit—because every dollar you save today is a step closer to the life you want tomorrow.
Paying yourself first is the foundation of financial freedom. It’s not just a rule; it’s a promise you make to yourself to prioritize your future above all else.
Step 4: Work Two Jobs or More – The Hustle Phase
Alright, so once you’ve got the basics down—your money management is on point, you know where your money’s going, and 10% of your paycheck is being saved automatically—it’s time to level up. At this point, you need extra money to go beyond just covering your expenses. Why? Because this is where you start building the funds to invest in yourself and your future.
Why Invest in Yourself First?
The best investment isn’t in stocks or real estate—it’s in you. Your knowledge, skills, training, and self-development are your greatest assets. They’re what will help you earn, grow, and thrive over the long term. But to do this, you need a little extra cash, and for many, that means entering what I call the hustle phase.
What Does the Hustle Phase Look Like?
This phase is all about working more.
- If you’re currently working one job, you may need to add another.
- For example, if you have a 9-to-5 job, consider a night shift role or take up side hustles like driving for Uber, freelancing, or doing deliveries.
No Sugarcoating: Life Balance Will Be Tough: Let’s be real—this phase isn’t going to be glamorous. You’ll probably have less free time, miss out on social events, and feel stretched thin. But that’s okay. This isn’t forever—it’s a phase.
What matters is that:
- You’re taking action to improve your financial situation.
- You’re respecting the grind that will ultimately give you the freedom you’re working toward.
Why It’s Worth It: This hustle phase isn’t just about earning more; it’s about respecting yourself enough to do what needs to be done. You’re working hard now so you can enjoy life later. Whether that means finally breaking free of debt, building savings, or funding your education, this phase is a stepping stone to a better future.
How Long Will This Phase Last?
It depends on how disciplined you are with your money.
- If you’re smart with your savings and don’t splurge unnecessarily, this phase will be shorter than you think.
- Once you’ve built a cushion of extra savings, you can move to the next step.
The hustle phase is temporary, but the benefits will last a lifetime. It’s about grinding with purpose, so you can start living life on your terms sooner rather than later.
Step 5: Educate Yourself For Free
While I’m working my two jobs, saving money, and doing Uber, in my free time I will absorb YouTube content. I will learn from Google. I will do whatever I need to do to educate myself for free, without any costs. Free content—love it, it’s great. YouTube is a phenomenal place for that.
Step 6: Open Your First Little Side Hustle
Once I have an adequate amount of savings, what I would do is start my own little side hustle. I’d invest in something like Kindle publishing or affiliate marketing, as these are two business models that don’t require a big upfront investment. With the little bit of savings I’ve accumulated—separate from my rainy day fund—I could put $100 or $200 into this side hustle. Over time, it starts to grow.
For example, with Kindle publishing, you can publish one book that might cost $100–$200 to create. After about two or three months, you could recoup that initial investment. After that, any additional sales are pure profit. What I like about Kindle publishing is that it’s relatively passive. Once the initial work is done, you may only need to occasionally edit or update something.
Affiliate marketing is another great option because you don’t need to create your own products. You simply promote someone else’s product and earn a commission. You can start this business for free by adding value through blogging or social media—both of which are free platforms. With hard work and creativity, you can build something meaningful here.
Step 7: Invest In A Training Program Of Your Choice
At this point, as my side hustle grows and my savings start to accumulate, I would keep working and putting money aside. Once I have around $5,000 to $7,000 in savings—money that’s separate from my expenses or rainy day fund—I would invest in a training program. This would be an investment in learning a skill or business model that I believe will help me achieve financial freedom.
By this stage, I would be looking into programs that teach e-commerce or online business strategies, where I can learn how to create a sustainable income stream. The goal here is to acquire knowledge and training that will enable me to start my own business, something I can scale and grow over time.
While it’s not necessary to follow a specific business model, the point is to focus on a skill that has the potential for growth, like e-commerce, Amazon selling, or another scalable opportunity. I would invest in a program that offers quality knowledge, knowing that the money I invest in learning will pay off much more in the future.
It’s also possible to find affordable options by sharing the cost with someone else, making it more accessible. After completing the program, I’d use the savings I’ve set aside to fund my business. The idea is to reinvest profits back into the business as it grows until I reach a point of consistent income.
This is a personal decision. You could choose to invest in stocks, real estate, or another more secure option, depending on your preferences and risk tolerance. While these may provide less immediate return compared to building your own business, they offer more security and require less work. The key is to choose what resonates most with you and aligns with your goals. For me, I know investing in myself and in a scalable online business is where the greatest potential lies.
Step 8: Quit One Or All Of Your Jobs Once You Have Consistent Income
Once you have consistent income and proven profits from your business, that’s when you can start paying yourself and consider quitting one or even both of your jobs. However, it’s important to ensure that your business is stable and profitable before making this leap. You don’t want to quit your job too soon and risk falling back into a financial struggle. You should have a solid, proven concept in place, and only after that can you confidently transition to working full-time on your business.
This is a crucial step because, as successful entrepreneurs and investors often say, it’s vital to be fully immersed in your business for it to succeed. Whether you’re seeking investors or taking the next steps in your journey, being fully dedicated and available is key. So, once you’ve achieved consistent results, that’s when you can confidently quit your job(s) and dedicate all your time to your business.
Step 9: Invest
Once my business is running smoothly and generating consistent income, I would start investing more of my savings. Instead of just putting the usual 10% into my rainy day fund, I’d begin building my own investment portfolio. Specifically, I’d focus on dividend-paying stocks. These are stocks that pay you a percentage of their earnings each month, allowing you to generate monthly income from your investments.
This is one of the truly passive income streams, as you don’t have to actively work for the returns. Unlike other semi-passive income sources, dividend-paying stocks don’t require constant effort or maintenance. Once you’ve made the investment, the money just keeps coming in each month, no extra work needed.
Over time, as your portfolio grows, the dividends you earn can increase significantly—$1,000, $5,000, $10,000, or even $20,000 per month. At this point, your income is not tied to a business anymore; it’s completely passive profits. From here, you have options. You could choose to retire and live off the dividends, or you could reinvest those profits back into your stocks, which would help you earn even more in dividends down the line.
Step 10: Achieve Financial Freedom
And that’s how you achieve financial freedom. At this point, you’ll have so much money that you won’t even know what to do with it. You can pass it on to your kids because, honestly, you’re not going to need it. Most people won’t quit their jobs unless they truly love what they do. Studies show that continuing to work as you age can actually help you live longer and feel more fulfilled.
I know many retirees, like my mom, who feel lonely after retiring. They’re always looking for something to do because they get bored. But with a huge portfolio paying you passive income, you won’t just rely on your business or job anymore. You’ll have the freedom to choose how you spend your time.
Now, you’re also in a position to build a legacy. You could be the first in your family to break the cycle and provide financial abundance to future generations—setting your children and grandchildren up for success.
This is just how I’d approach it, and I know your path might look different. But I hope this post offers some value to those who need it!