We’ve all heard of the idea of forever financial freedom - that
point in your life when you can live comfortably and independently on the money
you’ve saved up and don’t have to work anymore if you so choose. But how do you
get there? This guide will show you exactly how to achieve forever financial
freedom by taking advantage of these simple techniques mentioned below. All you need to do is
take this advice and follow it, and your financial worries will be over.
Emergency Fund
Most financial experts will tell you to have a sizeable
emergency fund of three-to-six months’ worth of living expenses. An emergency
fund is a financial safety net for future mishaps and/or unexpected expenses.
If your car breaks down, you can use it to pay for repairs or buy a new one. If
you need surgery, you can pay for it without taking on extra debt or putting
your long-term plans on hold.
Even if you
have a good job and make a decent living, it can be tough to save up three
months’ worth of salary. To reach that level of emergency savings, you need to
set aside 15-20% of your income each month. A more realistic goal is somewhere
between 1-2 months' worth of living expenses – enough for some bumps in life
but not so much that it impacts your long-term financial goals.
1) Building your assets
it’s not just about spending less than you earn, it’s also
about earning more than you spend. Start building your assets by saving any
extra money that comes your way. For example, if you get a windfall from a
holiday bonus or tax refund, invest that money instead of spending it. When it
comes time to pay for college, start saving in advance so you don’t have to tap
into student loans later. And finally, get serious about retirement and start
saving for it as early as possible. You might not think much of an extra $10
here or there—but over time those dollars will add up and become a valuable
part of your overall financial portfolio.
2)
Saving and Investing
You’ll have more time to make money and become financially
independent. The sooner you start saving, the more you will be able to build up
your funds. Saving your money is one of the simplest ways to reach forever
financial freedom. The smartest method is through investing, which means
purchasing stocks, bonds, or property that you can sell later at a higher
price. And it’s not as hard as you think! There are many easy ways to get
started investing. First, open an investment account with a brokerage firm like
Charles Schwab or Fidelity. Then make sure to set up automatic deposits from
your bank account into your investment account each month. That way, you’ll
never have to worry about missing an opportunity for growth. When you invest in
low-cost index funds and ETFs (exchange-traded funds), you don’t have to worry
about picking winning investments—you just need to stay invested in general and
let time do its work!
3)
Avoiding Debt and
Taxes
To achieve financial freedom, you should try your best to
avoid debt and save your money. Paying off high-interest credit cards is
crucial to free up more money for savings, which you can use later on to
invest. The key here is, don’t spend what you don’t have; if you get into a
situation where you find yourself unable to pay off your debt, consider selling
some assets or taking out a loan at a lower interest rate. You must avoid
things like taxes and debt at all costs. Both can eat into your savings account
like a cancer if you aren’t paying attention
4)
Minimizing Expenses
The first step is to figure out exactly what you're spending
money on and how much you're spending. Creating a budget is a smart way to
track your spending and make sure your financial freedom plan stays on track.
In addition, there are small things you can do that can save you serious
money—like skipping lunch or packing snacks from home instead of buying them at
work every day—that can help you achieve forever financial freedom sooner than
later.
You don’t need to eliminate all your non-essential expenses.
You do, however, need to figure out which ones are critical and make sure that
money is always going toward them. For example, if you rent a flat with three
roommates, you may want to prioritize saving for an apartment over buying
clothes—at least until your living situation is resolved. If getting by on less
means forgoing an expensive shopping trip in favor of brown bagging it or
packing lunch every day, so be it. Sometimes giving up that latte or waiting
another week for a new pair of shoes will give you just enough breathing room
to save what you really need.
5)
Creating Multiple
Passive Income Streams
If you want forever financial freedom, you’ll need to create
a system of passive income streams. Why? Because passive income doesn’t require
any work on your part once it’s set up and running. That doesn’t mean that it
happens overnight; in fact, it can take quite a bit of time to develop an asset
worth generating passive income from. However, if you stick with it, you can
ensure that eventually, your hard work will be compensated for years down the
road. If you only rely on one source of income, consider adding more streams
that can bring in additional money. For example, if you start a babysitting
service on top of your salary from working at an office, that’s another source
of revenue and could be significantly higher than just one stream. Multiple
sources are key—don’t be afraid to diversify!
6)
Living Below Your
Means
If you make your money stretch as far as possible and make
sure it lasts long enough to hit your financial goals, you’ll put yourself in a
great position for achieving forever financial freedom. The fastest way to
achieve that freedom is by living below your means—earning more than you spend
so that every dollar works hard for you. To build wealth, live well below your
means and spend less than half of what you earn; save, invest, compound and
time will work their magic on top of that!
Don’t blow your income on luxury cars, fancy watches, and
expensive clothes—these are all things that will go down in value over time.
Instead, focus on building your wealth by living below your means. If you have
extra money left over after paying for necessities like food and shelter, you
can choose to spend it on luxuries like entertainment or vacations instead of
depreciating assets like cars and furniture. Just remember to save enough so
that you always have a buffer—an emergency fund so that you don’t get caught
out by unexpected expenses like broken appliances or health issues. That way,
if something bad happens, it won’t throw off your whole plan!
7)
Don’t Worry About
Becoming Super Rich
It can be fun to dream about hitting it big and living a
life of luxury, but don’t let those daydreams stop you from doing something
practical. Instead, set some realistic goals that will move you towards
financial freedom. If your goal is wealth alone—without any consideration for
your happiness or quality of life—it may end up being more of a curse than a
blessing (at least in terms of happiness). Take some time today to define what
financial freedom means for you. Then, start working towards it by building small
wins on top of each other as you go along.
8)
Getting an Education
on Personal Finance
It’s been said, financial illiteracy is one of our biggest
problems in society. Making bad financial decisions can have a significant
negative impact on both your short- and long-term happiness. You probably
already know that it's important to avoid spending money on frivolities, but
you may be shocked at how many simple financial mistakes people make every
day—from overpaying for insurance to not maximizing their 401k contributions.
If you’re serious about achieving forever financial freedom,
then educating yourself on finance is a must. Here are some ways to get
started:
By attending a seminar or webinar on personal finance. By
reading books (try The Millionaire Next Door or Rich Dad Poor Dad) By listening
to podcasts (like Planet Money or Freakonomics Radio) By getting advice from
someone who has achieved success with finances (find an older relative or
friend who has retired early and ask them what they did right). To help you
stay motivated along your journey toward forever financial freedom: Make goals
for yourself – Write down some short-term goals as well as some long-term ones
that will keep you focused and motivated throughout your journey toward wealth.
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worth reading
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