The 10% rule：Start from the very beginning and achieve financial freedom within 10 years

When you can spend your time doing work you love without worrying about your daily expenses, your financial freedom is achieved.

One of the best aspects about the definition of financial freedom is that it does not require you to accumulate a lot of fortune. It just needs you to find a way to pay for all your living expenses while doing a job you really enjoy and saving a little bit of extra income for retirement.

According to this definition, an artist making $38,000 a year has more financial freedom than an investment banker earning $380,000.

10% rule

The time it takes to achieve financial freedom comes down to one factor. The amount of money you can earn from doing what you love is related to the cost of living.

If you have a 9 to 5 job that you do not like, the only way to achieve financial freedom is to find a job you absolutely love. This does not mean you should resign. After all, your income provides financial security for you and your family.

Instead of leaving your job, why not find a sideline business which you enjoy and set a target of getting 10 percent of your current income from that sideline job over the next 12 months.

In your second year on the sideline business, your target is to earn 20 percent of your daily income.

You are on board to achieve financial freedom if you keep improving in this way.

It makes me to think about the 10 percent rule: If you can earn 10 percent of your current income in the first year by doing work you love, and the percentage is growing by 10 percent, you will achieve financial freedom in no more than 10 years.

According to the 10 percent rule, how do you know exactly when you can achieve the financial freedom.

The simplest way to understand how the 10% rule works is to refer to an example.

Let us make the following assumptions.

You have a formal job that pays you $70,000 a year.

After tax, your annual income is $48,000.

Your annual expenses are equivalent to 90% of your after-tax income, which is $43,200.