Millionaires & Freedom

A while back a friend asked what my definition of ‘millionaire’ status was.

Being a millionaire, in my book, is all about net worth.

Net worth: The value of your assets minus your liabilities (debt)

If you have a house that’s worth $300K and you owe $250K, your net worth in this example would be $50K.

And so, when assets minus liabilities = 1 million or more, you are a millionaire.

Here’s an important distinction for freedom crusaders though.

It’s possible to be a millionaire and cash poor at the same time.

Say you have millions in land with no cash flow, you’re a paper millionaire with no money.

This is why – in my mind – it’s much more useful to focus on building a healthy passive cash flow than becoming a millionaire.

Financial freedom (in my mind) comes from having pipeline money that surpasses your monthly expense.

Not from having paper millions. 🙂