For many people, financial freedom is nothing but a concept developed by the rich so the masses can keep struggling in their 9-5 jobs.
Those people couldn’t be more wrong.
Every person can become financially independent. Whether you’re deeply buried in student loan debt or spent all your money dealing with a medical emergency, there’s always a way to get back on your feet.
At this point, you might be wondering, ‘If it’s so easy to afford a luxurious lifestyle, then why do the majority of people are still working tirelessly in their daily jobs?’
Well, achieving financial freedom is a rewarding process, sure, but it also happens to be a challenging and exhausting one.
If you’ve understood that becoming your own boss isn’t something that happens overnight, then you’ve taken the first step in the right direction.
As for the remaining steps, we’re going to share a few helpful tips, so you can start living life on your own terms.
1. Understand Your Current Position
It’s impossible to become financially independent without knowing your current position.
• Are you in debt?
• How much money can you save per month?
• Do you need to watch your expenses?
Finding answers to these questions will be like dealing with a depressing reality. But you have to believe that it’s the right thing to do.
Make a list of all the debts, including mortgage, student loans, credit card, car loans, or any other debt that you may have accumulated.
Once you’ve done that, add them all up.
What does the calculator show?
If it’s a big number, don’t worry, there’s a solution for every problem.
If it’s a small number, even better.
Now, we’d like you to repeat the same process, but instead of compiling your debt, make a list of all your savings.
Think of this procedure as drafting a blueprint for your plans. It’ll help you focus on aspects that matter the most.
2. Prioritize Saving and Investing Over Spending
Let’s imagine a situation:
You’re randomly browsing things on the internet when you see the latest Marvel action figure of your favorite character. And it’s on sale too. The next thing you know, you’ve added another superhero to your action figure collection.
If this sounds too familiar, you’re not the only one. We’re all guilty of purchasing things that we didn’t even need in the first place.
Usually, people prioritize spending over saving or investing.
If you want to achieve financial independence, you’ll need to reverse the process.
An excellent way to balance your expenses and savings would be to follow the ‘50-30-20’ rule.
Well, according to the rule, 50% of your income should be reserved for basic needs, 30% for wants and the remaining 20% should either be saved or invested.
It may seem like a small step, but in the long term, you’ll be grateful that you incorporated the rule in your life.
3. Set Life Goals
What does being financially independent mean to you?
After retiring, do you want to travel the world on a luxurious cruise? Or would you like to spend the rest of your life somewhere in the serene and snowy landscape of Reykjavik?
Write down the amount you wish to see in your bank account, but keep it within the realm of reality. Otherwise, you’ve set yourself up for loss already.
In any case, be as specific as you can with your goals. The more detailed they are, the higher chances of meeting them.
And remember, don’t be impatient with your progress. You might not even notice anything significant until months. But as long as you’re working towards meeting your goals, you’ve got the situation under control.
4. Stay Away from The Spendthrifts in Your Life
Let’s be honest. We’ve all got a spendthrift or two in our lives.
If you don’t know who that is, a spendthrift is a person who spends money extravagantly and irrationally.
It’s always a good idea to stay away from such people. But if you’re working towards achieving financial independence, you’ve got a good reason to limit your contact, or better yet, completely eliminate them from your life.
Doing so will be difficult, especially if you’re used to being around them. However, it’s a known fact that birds of a feather flock together.
In most cases, such people like ‘living in the moment.’ It’s not necessarily a bad thing. We’re not in a position to tell people how to spend their money.
But if you’re building a future for yourself, then it’s not the kind of behavior you should exhibit.
5. Understand That Money Is Not Everything
We get it.
You’re tired of hearing this quote, which, surprisingly, usually comes from people who live in 5,500-square foot homes and drive the latest convertibles.
But at some point in your life, you’ll realize that the experiences you create will be far more meaningful than the products you own.
Fifty years from now, when you’re surrounded by your loved ones, what do you think will be worth cherishing?
The $10,000 Hublot watch you purchased, or the moments you spent chasing sunsets with your friends?
While it’s a good idea to spend money on something you’re passionate about, don’t go broke trying to look rich.
Ready To Change Your Life?
Attaining financial independence is a great way to take charge of your financial situation, and more importantly, your life.
While following the tips mentioned above won’t solve all your problems immediately, they’ll serve as the guiding star that you can live by.
After all, the steps you take don’t need to be big, they just have to take you in the right direction.
If you’d like to know more about being your own boss, feel free to contact one of our representatives. We’ve helped many people become self-financed. Now, it’s your turn to experience the same. The only question is: are you ready for it?