Financial freedom is something we all dream of. We yearn to be free from the shakles and chains of limited income. Are you one of these people? Are you tired of living paycheck to paycheck? Are you overworked and underpaid? If this is you, there is a way out. You do not have to live this way. Life is meant for living not surviving. If we are to live, we cannot allow ourselves to be slaves to our jobs. Each one of us has the ability to have financial freedom. We can use our skills and talents to take us out of the position we are in. It takes patience, time and a plan. If you want to get there, follow these steps.
1) HAVE A PLAN
Have a plan for how you want to get out of your current situation. Take a piece of paper and write out where you want to be in one year from now. Break it down in small exact steps. If you want to make more money? How will you go about doing it? Will you pursue a degree to increase your earning potential? How much do want to have saved in one year? Write down your goals and set a date at which you expect to achieve them. Seeing your goals on paper makes it more concrete. Make every day count towards achieving your goals.
2) CHANGE HOW YOU UTILIZE MONEY
If you want to become financially independent, you must modify how you use money. If all you see is money as something to spend and buy items with, you will never get out of your situation. It helps to educate yourself on how cash works. Buy plenty of money books and magazines so you are know the difference between good debt and bad debt. Begin using money to purchase assets instead of liabilites. In other words, buy appreciating assets that put money in your pocket without you having to work. For example ,invest in a treasury bond or mutual fund. These are assets that earn money for you. They give you a yearly return of about 6% – 9% on your money. Make your greenbacks work for you. This will get you on the road to financial freedom.
3) SAVE YOUR MONEY
If you want to have financial freedom, you should begin saving as much money as you can. Put together a one year emergency fund just in case. This will protect you incase you lose your job or have any set backs. I suggest conserving at least $30,000.
4) PAY YOURSELF FIRST
Every time you get paid put 10% of your paycheck in your pocket. Transfer this money to your savings account. Do this consistently. You will see your money grow and have more of it.
5) COPY WHAT RICH PEOPLE DO.
If you notice, only 1% of the population is considered rich or wealthy. Why do you think that is? We live in one of the richest nations, yet most of us are below middle class status. There is something wrong with this. Rich people are not smarter than you. They use money differently. Rich people do one thing different than others. They buy assets not liabilities. They purchase investments such as real estate, bonds, and stocks. These vehicles produce money for them. They also create multiple streams of income, have a life insurance policy and living trust somewhere. If you listen to what affluent people talk about, you notice they do not talk about things. They discuss how there going to land there next business deal or what business they are going to purchase. If you simply do what they do, you will have what they have.
6) GET A FINANCIAL ADVISOR OR MONEY COACH
It helps to get help. No matter how smart you are. Get intouch with a money coach. They will guide you in the direction you need to go. They will help you map out your financial goals; getting you to your destination. Get help.
7) CONTROL SPENDING
Do not spend all the money you have. You must practice making a list of what you need. When you control spending, you free yourself from over extending yourself. You will have more money in your pocket.
8) CREATE A PORTFOLIO
A porfolio contains assets such as bonds, mutual funds and stocks. These produce income over the years. Make sure to keep your portfolio diversified. This means having different types of asset vehicles working for you. Just in case one does not perform as well, you will have another to rely on. A financial advisor will help you set one up.
9) PARTICIPATE IN A RETIREMENT PLAN
One day you will want to retire. If you are young, this seems like a distant thought. If you are older this is right around the corner. Make sure you have a retirement account like a 401(K) plan, 403(b) or ROTH IRA. These accounts allow you to choose among different investments like stocks, bonds and mutual funds. They spread your money allowing to grow over time. If your job does not offer one, you can get one through your bank.
10) PURCHASE A HOME
A house is one of the most important investments a person can make. Not only is it something you own, it makes money for you. It is an asset. When you own a home, you are entitled to many tax advantages. You get money back from your home. You can use the equity in it to purchase other asset vehicles. To buy a house make sure you have a good credit and a down payment of at least 20% or more. Homes are cheaper now, so if you have the money to buy one now is the time.
Overall, these are the ten steps to financial freedom. It is a choice. Everyday you choose to be rich or poor. Today chose to be rich and financially free.