Are you interested in financial independence (i.e. stage where you do not need to work for money)? We all want to have financial independence but we do not know where we should start. Don’t you think that it will be great not to worry about money anymore and be able to take a breath?
So the question arises is where to start? So here are some of the things that you can do. That will lead you in the right direction.
Reduce your Expenses
The first thing that you can do and that will give you instant result is cutting your expenses. What are things that you do not enjoy that much but pay of it? Think about the satisfaction that you get from all the things that cost you money.
And ask yourself do I really getting my money’s worth. If you are not then you should stop doing it all together.
Learn the art of frugality
Learn how you can be frugal in your life. How can you enjoy more of what you already have at the place of wanting more and more?
It is an endless cycle you will never get ahead of it. So the first thing that you have done is see what you already and have and how can you enjoy it more. You have to learn to get the juice out of your life.
Develop your health
There are many advantages of healthy lifestyle you will be able to pass time. Your medical bill will be less and you will be able to enjoy your life even more.
Develop a reserve fund
You should have at least 2 years’ worth of your expense in your savings account in the form of MOD. So that you will be able to get by any uncertain expenses that comes.
Total financial freedom
When will you be able to say that you are totally financially free? When you are able to live of the interest that you earn from your saving you are financially free. Take for example that you found out that you need Rs.20000 per month to live your life. Then the total fund you will need will be Rs. 30 lack. So if you have Rs.30 lack in your account you will be able to earn Rs 20000 as interest from it and will be able to live of it.
I know that you have to save a lot to get there. But you will be able to learn to live with less and need even less reserve to live by.
Invest what you save
If you do not invest what you save then there is no meaning in all this you will never become financially free only based on your saving. I am not saying that it is impossible but it is really hard to do.
All the odds are against you already why you want to create more in the path of your financial freedom. So it is important that you know how to invest money.
Learn about stock market
I know it is not a safe place to invest for most of you. But it is a fact that rich people have 20% of their net worth invested in the stock market. So there might be something of value there.
Do not learn to become a trader if you have other job. But learn to invest buy a stock and then keep it for life. If you do not really have time then you should simply invest in Index fund that is your best bet. You should use systematic investment plan (S.I.P) in which a fixed amount of money is invested in the market every month.
You can even make it automatic in which money will be dedicated directly from your saving account and will be invested and you do not have to think about it. It is a long game do not except any result in first 5 year of investment just keep investing in 20 year you will thank yourself for it.
Learn to have fun for free
If you keep track of all your expenses which you should you will find out that a lot of money you earn goes into things that do not have real return but you think is fun like party out, buying without need etc.
You should find things that are fun to do but cost you little or even make you some money. We will discuss it in next point.
Develop a hobby that pays
We all have hobbies for most us it is watching TV 4 hours a day. Which is not good for your financial health at all the main purpose of TV is make you buy things that you do not need.
So find some hobby that you enjoy it can be an added bonus if you can find ways to monetizes it.
Create multiple sources of income
You should have multiple sources of income if you want financial independence fast. It does not have to be a large amount you can get a lot ahead with just an extra $500 per month.
Think about what a difference it will make if you can make an extra payment on your home loan.
Now you 10 things that can help you become financially independent. Now what you have to do take things that can take you less than 15 minute to setup like SIP of minimum amount and then start there.
You can take one thing at a time and make a habit out of it. Your habits will make you rich in the future. If you pay close attention you will find out rich are rich because they have habits like living below their means investing the difference.
Poor are poor because they spend all they earn. So they keep living in the cycle where they just keep earning and spending for all there life and do not have any chance of getting out of this cycle.
If you want to be financially free ever in your life then read this two books milliner next door and your money or your life. If you have not read those books then start reading them today your financial life depends on it.
You are responsible for your financial management so learn as much as you can and apply it to your daily life you will see great change if you do it.