3 Steps to Get Started on Your Journey to Financial Freedom
No more living from paycheck to paycheck. It is time to become financially independent.
No matter what you do for a living, whether you are a salaried employee, self-employed individual or a business owner, the day(s) you receive your payment is always a good day. Isn’t it? But then come the bills/payments that need to be made and essential monthly expenses that cannot be ignored, perhaps some indulgences as a reward for working so hard.
And, then poof, the money is all gone.
Now, you eagerly await the next day of payment. To repeat the same cycle all over again.
Do you want to keep living from paycheck to paycheck? Never having money to spare at the end of the month? Of course not.
We suggest actively working towards achieving financial freedom. Why, you ask? To never have to worry about money while living your best life. To never have to depend upon anyone financially – pandemic or no pandemic.
We look at three simple steps that will put you on the path to financial freedom. Let’s get started.
#1 Start Early
The first thing that you need to do is to get started right away. The sooner you start, the better. It may be difficult if you have been in the habit of living from paycheck to paycheck, spending every last paisa from your monthly income. But you must start with a goal of saving money right now, no matter how small the amount is. Do not wait to earn a certain sum of money to start saving.
Note: Even if you think it is a bit late to start, do not procrastinate any longer. Start now. Remember: The best time to plant a tree was 20 years ago, the next best time is today.
#2 Make it a Habit
Next, you should try to make it a habit to save a specified amount of money regularly. Based on your monthly income, you can decide the amount that you will save each month no matter what. Put it somewhere safe and inaccessible until you can start investing. Do not just depend on getting an interest on the balance in your savings account or a Fixed Deposit. Explore other options such as mutual funds, bonds, fixed assets and other investment plans since they may offer better returns.
Tip: If nothing else seems feasible, start with building a 6-month emergency fund i.e. money that will last you for 6 months (for all your monthly expenses) even if you do not have any source of income during that time. This small step itself will help you sleep stress-free every night.
#3 Build Passive Income
The final and most important step is to get into the mindset of becoming financially independent. This means that you will not just depend upon your job (or business) for income. Instead, you will focus on finding avenues to make your money work for you. This way you will make money even when you are sleeping.
Note: Even the interest you earn on an FD or other investments is passive income. You have earned the money and invested it to make more money for you. Basically, you put in the work once (physically) and keep getting the dividends until you encash it.
A Final Word:
Once you follow these steps meticulously, you will be well on your way to becoming financially independent. Of course, you decide the pace you are comfortable with and what your financial goals are. As you keep saving and investing regularly, your net worth will keep growing and you will build wealth that will slowly overtake your monthly income. Soon enough you will be making enough passive income that you will not need to work to earn money.
If you need help with following these steps, get in touch with us for our Freedom Personal Finance Programme where we help you get started on your journey to financial independence. Plus, we help you get really good at winning in life.