Achieving financial freedom is by no means easy, but it’s totally doable if you commit to it. You need to want financial freedom more than you’re afraid of it. Then you can take the steps to work towards it, and before you know it, you could have more money than you know what to do with. This plan will help you on your way to getting to where you want to be:
First Of All, You Need:
- A definition of exactly what financial independence means to you
- A picture of your current financial situation
- An idea as to what you’ll have to give up to get where you want to go
- An assessment of the obstacles in your path
- A series of goals that will help you to get to where you want to be
Laying Out The Steps To Where You Want To Go
The thing you need to realize about financial freedom, is that it’s not one huge goal, but many smaller goals. You’ll need to set yourself numerous goals, such as:
- Making more money
- Taking control of your spending
- Paying off your student loans and other debts
- Determining your objectives for investments
Living Beneath Your Means
The key to becoming financially free is that you need to live beneath your means for the rest of your life. You need to fully master this one before you can get to where you want to be. Mastering this step will be uncomfortable, but it’s essential. Focus on this step before you do anything else. You need to identify the triggers that make you want to spend money on things you don’t need, and distance yourself from consumerism. People are so obsessed with owning the latest gadgets these days that they forget what’s really important.
Pay Attention To Who You Spend Time With
If you spend time with people who live in the moment when it comes to their cash, there’s every chance you’re going to view it the same way as them. Pay more attention to who you’re spending your time with, and if possible spend more time with those who have the same goals as you, or have already mastered those goals.
Save Money No Matter What You’re Earning
No matter how much money you’re earning, you should make sure you’re putting some of it away. Take a look at your expenses and see if you can lower your outgoings, increase your earnings, or both. There should be at least a couple of things you can do to free up income and make sure you’re putting some away. Setting financial goals is a good start, but you should review what’s going on each month so you can see what you need to change and how far away you are from your goals.
Create An Emergency Fund
If you haven’t already got one, your first goal should be to start an emergency fund. This fund is there to protect you if you’re living from paycheck to paycheck at the moment. Going through life without any sort of cash cushion to keep you going isn’t very smart at all. For those who have a job, you should have 3-6 months of living expenses behind you. For those who are self employed, you should put aside 6-12 months of living expenses. You never know what could be just around the corner, and you don’t want to end up stuck if you have an emergency repair, for instance, or you end up losing your job.
Without an emergency fund, you can’t exactly take control of your own life either. People don’t leave jobs that aren’t any good for them because ‘they can’t afford to’. When you have money behind you, you can call the shots in your own life.
Diversify Your Income Sources
Diversifying your income sources is a very smart way to make your way to financial freedom. The best way to do this is to explore ways you can make passive income – you want to be doing as little work as possible and continue to make money for it when it’s done. So, you could write e-books, which help you to make money while you sleep. You could also create and monetize a YouTube channel, so that your videos can continue making money even when you’re sleeping. These things alone may not make you a wad of cash all at once, but being consistent with various methods should mean you build up a generous income stream over time. You can also start as a seller on Amazon; learn more here if that sounds like something you want to do. The more you diversify your income sources, the less you have to worry if something happens to one of them. Anybody can teach themselves to do this with some of the YouTube channels, books, and courses out there. You don’t have to spend a lot of money!
When you’ve got your emergency fund, you can start putting some of your money into smart investments. Investing will help you to earn more money, but it comes with a level of risk – which is why having your emergency fund in place first is a must.
Make sure you invest your money regardless of what the market is doing. If you’re not sure of whether it’s a good idea to proceed with your investments or not, you can hire a professional to manage your accounts. You can further protect your investments by making sure you invest in several asset classes, which should help you to diversify and stop any unexpected surprises.
For example, you should have a set amount of money invested stocks, fixed income investments, peer to peer lending, cash, natural resources, and real estate. This means you won’t take a big hit if any of the sectors take a tumble.
Are you ready to become financially free? Stop being afraid and start getting excited. It will take time, but it’s more than worth it for the lifestyle you could enjoy.