I reached financial freedom at the age of 38: Here are 4 money principles I live by

Shao Chun, 38, built a seven-figure investment portfolio using four key money principles.

The idea of financial freedom can feel like a far-fetched dream — something only a few get to experience after a lucky break, or during retirement after working for decades, but Shao Chun says otherwise.

Over the course of eight years working at Google, Chun lived below his means and consistently set aside up to 50% of his paycheck for investments. That allowed him to build a substantial portfolio worth $2 million, according to documents seen by CNBC Make It.

"You can actually achieve financial freedom while working nine to five," Chun said.

But when he was laid off in February, Chun realized he no longer had to rely on a paycheck to sustain himself.

Using the 4% rule as a guideline, Chun saw that he could comfortably and safely live off of his investments by withdrawing 4% of his portfolio in the first year and that same amount, adjusted for inflation, in each subsequent year. In theory, this amount would likely be small enough for his portfolio to support him for at least 30 years.

"When you are financially free... you then can then have that flexibility or that air space to actually do what you want," he said.

Besides the amount withdrawn from his portfolio, Chun also makes money by teaching as a part-time professor at the National University of Singapore, creating educational content for his YouTube channel "9 to 5 Millionaire Mindset" and through his career coaching business.

Here are the four key principles he lives by that's allowed him to achieve financial freedom:

1. Acknowledge that your ultimate goal is to be free

The first step to becoming financially free is to be intentional about pursuing that freedom.

"What we used to value is stability, [but] given where the economy is going right now, stability is no longer a perk that... companies can provide us," he said. "The current generation [feels] stuck, [like] they need to dedicate themselves to one particular path, but... your objective is to be free. Your objective isn't to be loyal."

"The beautiful thing about our lives right now is that... while jobs no longer provide security... we have so [many] resources that are available online as well," he said. From learning how to invest to opening your own brokerage account, he explained the internet grants access to free information on how to build your wealth.

2. Actively work to increase your income

So, we want to be financially free. How do we get there? "Short story... is to get rich," said Chun.

"You must find ways to increase your active income," said Chun. One way is to know when to job hop when "you're not learning or earning," says Chun.

"The other way is to be over employed," he said. "So you have people working multiple jobs, having side hustles or even working two remote jobs. That's one way, but the burnout is high."

When it comes to side hustles, Chun suggests picking something that is a "low lift" or something that complements your skill sets. Ideally, the side hustle will bring in passive income so you don't have to trade your time for money, he suggests.

3. Decrease how much you spend

Managing your "burn rate," or how much you spend, is just as important as increasing your income, said Chun.

"If you want freedom, you actually need to be disciplined," he said. "It's actually a very popular concept that is advocated by the U.S. Navy SEALs: 'discipline equals freedom.'"

Although many people want financial freedom, oftentimes our actions do not align with that goal. Behaviors such as seeking instant gratification, living beyond our means and "keeping up with the Joneses" can get in the way of our goal of being free.

4. Stop trading time for money

Because inflation erodes the value of money over time, it is crucial to learn how to properly invest so that our nest egg can keep up with, or ideally beat the market.

"The [last] pillar of achieving financial freedom is to... not trade time for money, and that's when you need to start investing," said Chun.

Respect the "time value of money," he said, pointing to a basic rule in economics that states the value of a dollar today is worth more than the value of a dollar in the future due to interest, inflation and its earnings potential.

Since 1957, the S&P 500 has provided an average return on investment of 10.26% each year, according to Investopedia. If you invested $1,000 in the S&P 500 in 2013, by April of 2023, your investment would have tripled to about $3,217, according to reporting by CNBC.

"Invest for the long term, not the short term," said Chun, advising people to avoid the "shiny thing syndrome" and try to invest in your circle of competency, or what you understand. "If you can't explain the investment to a 6-year-old, that investment might not be for you."

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