What is financial freedom?
Achieving any form of freedom is a battle, you have to sacrifice a lot, keep your focus on
the journey, and bear hardships. To achieve victory in your financial freedom path you
just need patience, consistency, and discipline.
Regardless of what financial freedom is for you. Whether it’s to retire early with enough
funds to bear future expenses easily or to buy time in exchange for money. The following
steps will assist you on your journey to financial freedom.
1)long term Financial plans
If you fail to plan then you plan to fail!
You should be setting long-term goals regardless of what you earn from your job. Long-term plans will play a vital role in accomplishing Financial Independence. Before
planning you should be clear at what age you want financial independence. Take a
sheet of paper, write the amount you want to achieve and then put a date. Professor of
Psychology, Dr.Gail conducted research with 200 plus participants on setting goals. It
showed that your chances of success increase by 42% if goals are set.
Break your goal into small parts, and make monthly or weekly targets to achieve your
destination. This can include getting a promotion, starting a side hustle, or investing in a
skill that can be milked in the future to earn extra money.
make a budget plan for your family. Making a budget will not only help you achieve your
financial freedom goals, but more importantly you will have a track of all the spending.
2)Degrade your lifestyle
It’s a common trait of wealthy individuals that they live below their means to become
financially healthy. A distinction of your necessities is vital, take a sheet write 📝 down
your spending and then eliminate those items which are stopping you to live a
financially free life. From small to major expenses, if they are not your need remove
them.
Yes, it’s difficult to degrade your current lifestyle, trust me you will never regret this
sacrifice if it drives you to a life you always dreamed of.
3)Prepare for ‘surprise’ expenses
It’s possible that everything doesn’t work as planned. Apart from regular expenses you
might encounter accidental expenses e.g medical urgency.
There are irregular expenses that you can predict and you can’t predict e.g an increase
in the price of petrol. To deal with this You should devote a part of your income to
unexpected accidental expenses. It’s advised to have an emergency fund for up to six
months.
4)Avoid Taxes
Taxes can prove to be a huge hurdle in your way to achieving financial goals. There are
2 main types of taxes 1)income tax and 2)capital gain tax. If you are the owner of a
business you can give yourself a low salary and in this way, you can avoid income tax. If
you’re an employee then you can make a deal with your employer of a low salary in return
for fringe benefits.
To minimize your capital gain tax you can invest in digital assets such as blogs, apps,
youtube videos, launch products on-demand on print sides, etc.
5) Invest in your health
You might be thinking 🤔 that how being healthy is related to financial freedom? Well, if
you are not well you will not be able to work. The more healthy you are, the more you
are able to work. Make a routine of monthly visits to the doctor.
6) Financial mentor
When you think that you have generated enough funds or cash to invest, then you
should get a financial mentor who can guide you on where to invest in order to achieve
financial freedom. What’s the cost of hiring a financial advisor? A financial mentor charges something
between 0.25-1%, depending on the scale of wealth.
7) Invest
Understand you don’t need a high-paying job to invest in, you just need to be disciplined
and focused on your goal. Fix a % of your income to be used for investing.
There are many areas to invest in, but the best would be to invest in yourself. Invest in
learning a skill and then milk that skill, no one will double your money faster than you.
There is a famous quote from Benjamin Franklin “An investment in knowledge pays the
best return”. Do read investing tips by Jeff Bezos.
Conclusion
Repeat these steps with me,1) prepare long-term financial plans,2)degrade your
lifestyle, 3)prepare for surprise expenses, 4)avoid taxes, 5)Invest in your health,6) get a
financial mentor, and lastly Invest.
These are just a guide for you to get on the path to achieving your goal. After reading
these steps you can create your own steps or formula to achieve financial freedom
according to your feasibility.