The path to financial freedom and independence
Everyone wants to be financially free and independent. But that doesn’t happen by chance. There are things you must do intentionally. Perhaps you can say that it is too late to start with that. But it’s never too late to start something that leads to freedom.
This article is about the steps towards that financial freedom and independence. will cover; start a savings plan, deal with debt and use your savings to invest. Now let’s see the steps:
1. Put a savings plan in place.
Financial saving is all about setting aside some funds for future needs. It is the starting point for those who do not have a good financial background for their financial freedom and independence.
This is paying yourself first. It is unfair to oneself to start paying everyone else after receiving a salary or earning money, except oneself. How do you do that? You start by paying rent, titles, debts, utilities and other things until your monthly earnings are depleted. So saving at least 10% on every income you earn is a great starting point. This is affordable for everyone, as it is proportional to their income. There can be no excuse.
What are you waiting for? Get started right away. Open a savings account by joining a credit union or use a bank. Avoid withdrawing those funds until a certain period.
2. Dealing with debt
We all want to use the debt in a certain period. However, there are good and bad debts. I call bad debt that which does not generate income. Good debt is one that is used for productive purposes, such as starting some income-generating projects.
Bad debt adds liability. Please note that I am not using these terms according to accounting terminology. So an asset that is a liability is like a car or a house for personal residence. Why call these elements this way, since they are known as assets? They are a liability because they take cash out of your pocket.
Over-indebtedness should be avoided at all costs. If possible, reduce and eliminate debt. The savings plan mentioned above will lead you to financial freedom and independence when followed consistently.
3. Use your savings to invest.
Investment is better than saving. However, you must first have some funds before you can invest. Unfortunately, that’s where most of us have to start. There are several ways in which you can invest your funds. The forms may include business, purchase of financial assets, investment in financial shares, property, etc.
Investing helps you build your wealth, thus giving you your financial freedom and independence. It is a way to grow your finances.
The three steps above will get you started on your journey to financial freedom. Just follow them. Start by establishing a savings plan and stick to it consistently. Don’t wait too long because there will never be a favorable moment. Work on your debt by following a payment plan. Then, invest your funds so that you can grow your finances. Those three steps will put you on the right path to financial freedom and independence.