#292 Understanding Your Freedom Number w/ Krisstina Wise

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 I’m excited to share with you a recent interview I did on the Conscious Millionaire Show, hosted by JV Crum III. In this engaging discussion, we delved deep into the essential money numbers for achieving financial freedom, a topic I am passionate about and have dedicated much of my career to mastering.

During the interview, I shared my personal journey to financial freedom, highlighting the pivotal moments and decisions that shaped my path. I spoke about the common misconception that simply working harder in your business and focusing on top-line revenue will make you rich. Instead, I emphasized the importance of understanding and managing your financial numbers effectively.

One of the key points we discussed was the idea of the “Freedom Number” – the amount of money you need to live comfortably without having to work. This concept is crucial for setting financial goals and creating a plan to achieve them. We also talked about the top ten financial questions every entrepreneur should be able to answer but often can’t. These questions are vital for gaining a clear understanding of your financial health and making informed decisions.

In addition, we explored the significance of financial literacy and why it’s essential for every entrepreneur. I shared insights on how to master your finances by breaking them down into three main disciplines: earning, spending, and investing. By mastering these areas, you can ensure a stable financial future and achieve true financial freedom.

Takeaways I Got From This Episode Were:

  1. **Understanding Your Freedom Number**: We discussed how to calculate your Freedom Number, which is the amount of money you need to live comfortably without having to work. This number is crucial for setting financial goals and creating a plan to achieve them.
  2. **The Importance of Knowing Your Numbers**: I emphasized the significance of being intimately familiar with your business and personal finances. This includes knowing your net worth, profit margins, and the necessary revenue to reach financial independence.
  3. **The Myth of Top-Line Revenue**: We debunked the myth that simply increasing your top-line revenue will lead to wealth. Instead, the focus should be on profit and efficient cash flow management.
  4. **Parkinson’s Law and Lifestyle Creep**: We talked about Parkinson’s Law, which states that expenses rise to meet income. Recognizing this can help you prevent lifestyle creep and ensure that increased earnings lead to increased savings and investments, not just higher spending.
  5. **The Power of Financial Literacy**: Finally, we discussed the transformative power of financial literacy. By educating yourself and understanding the principles of money management, you can make informed decisions that will lead to long-term financial stability and growth.

Here Are Five of My Favorite Quotes:

  1. “You don’t earn your way to become a millionaire; you spend your way to become a millionaire.”
  2. “Knowing your numbers is the first step to financial freedom.”
  3. “It’s not about how much you make; it’s about how much you keep.”
  4. “Parkinson’s Law is real – be mindful of lifestyle creep.”
  5. “Financial literacy is the cornerstone of wealth building.”

Time Stamps:

  • [0:00][1:30] Introduction of Krisstina Wise and the topic of money numbers for financial freedom
  • [1:30][3:00] Krisstina’s journey to financial freedom and realizing that just building a bigger business doesn’t necessarily lead to personal wealth
  • [3:00][6:00] Discussion of common misconceptions about business growth and profits
  • [6:00][9:30] Importance of knowing your profit targets and profit margins in business
  • [9:30][14:00] Explanation of linking business finances to personal/household finances and determining “how much is enough”
  • [14:00][17:00] Emphasis on entrepreneurs needing to understand their numbers, not just relying on bookkeepers
  • [17:00][20:00] Introduction of Krisstina’s 10 financial questions quiz for entrepreneurs
  • [20:00][23:00] Discussion of mindset around money and business opportunities
  • [23:00][25:00] Krisstina’s current goals focused on expanding impact rather than reaching new summits
  • [25:00][28:00] Background on Krisstina’s book “Falling for Money” and her personal health crisis
  • [28:00][30:30] Krisstina’s desired legacy of helping people have better lives through understanding money and breaking generational poverty

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