We all want financial freedom, don’t we? But how many have got it? Financial freedom has not only to do with your salary but your ability to take care of expenses, invest for the future and at the same time have no loan to repay. Let’s start by defining what I mean when I say I’m financially independent. By my definition, financial independent means having enough assets to cover my normal living expenses with passive income alone. Having a steady income can be exciting, sometimes a little too exciting. It’s easy to get into financial trouble in your 20’s without even realizing the potential consequences. Simply paying attention to your spending and saving habits early can make reaching financial success a whole lot easier in the long run. It’s so easy to think “I have plenty of time to save”, but believe me, that plenty of time goes by a lot quicker than you think and if you start now, you’ll thank yourself later. So when you’re just starting to get your financial life together, or starting to think about it, here’s a list of tips to help you better understand your money and how to get better spending and saving habits in place now.
Without discipline and continuous focus on your financial goals, you’re not likely to get ahead. There is constant temptation to slip up, especially on the spending side of the equation. We make financial choices every single day usually multiple times a day. Every activity in your day is a spending decision: the flow and temperature of your morning shower, your wardrobe, your breakfast, your lunch, your evening entertainment, your dinner, your residence to which you return home. So, to become financially independent keeping your focus on right track is the most important thing to do.
If anyone of us wants to become financially independent savings are extremely important. We all get pocket money. The ones who want to become successful start saving from a very young age. And with those savings, we can start investing at any age we want. Savings are actually helpful in any age or in any field. One should know where to spend them correctly. If savings are spent in a wrong field there’s nothing one will get from them but if they are used effectively they can help the most in making a person financially independent in the early twenties.
Financial independence is a fantastic goal. Nobody wants to give it up. But it’s by no means a guarantee. The stock market, or the economy as we know it, could collapse tomorrow, however unlikely that may be. There will always be plenty of risks. Where possible, you should plan to mitigate them like by maintaining a small side income that you could scale up if needed. Where not possible, you should accept them and know that you’re smart enough and flexible enough to make it work.
“In today’s economic environment you cannot save your way to millionaire status,” writes Grant Cardone, who went from broke and in debt at 21 to self-made millionaire by 30. “The first step is to focus on increasing your income in increments and repeating that.”My income was $3,000 a month and nine years later it was $20,000 a month. Start following the money, and it will force you to control revenue and see opportunities.”Earning more money is often easier said than done, but most people have options. Read about 50 ways to bring in additional income, some high-paying jobs you can do on the side.
Grant Cardone says, “The only reason to save money is to invest it. Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency. This will force you to continue to follow step one (increase income). To this day, at least twice a year, I am broke because I always invest my surpluses into ventures I cannot access.” Investing is not as complicated or daunting as we make it out to be. The key to consistently setting aside money is to make it automatic. That way, you’ll never even see the money you’re contributing and you’ll learn to live without it.