Financial freedom sounds like heaven, one that is only possible with patience and determination following the right steps, amongst other things. You can say you’ve achieved financial freedom when you have enough money for all your living expenses and for the things you like. Then work becomes only optional, because you have enough money. It might sound like a dream come true, but this is a possibility that depends on the work you put in to achieve your goal.
You can start planning for your financial freedom anytime, no matter what age you are. Some people make a very vigorous plan to retire early, and they make the commitment in a time frame, be it 5 years or 20, depending on what sacrifices they are willing to make. If this sparked your interest let’s take a look at the 5 most important steps to achieve financial freedom so you can have fewer worries in your life.
Why You Should Plan for Your Financial Freedom
A lot of the things we need in order to be healthy and happy are tied to having money. You need money to have a place to stay, for all your expenses, for your vacations, and to have a safety net in case challenges appear. But living doesn’t always seem like freedom and because of debt and the amount of work you have to do becomes stress that comes with being financially insecure. You can take control of your life by attaining financial freedom.
Imagine having the home of your dreams and not worrying about paying your mortgage, being able to travel without working yourself out, and retiring early because you have enough money to not have to work another day in your life. Of course, you can continue to work, but only because it makes you feel good and not because you need money. This is why you should start planning for your financial freedom.
You will need to have financial intelligence to work out an achievable plan and to stick to your goals. But you can do this either by yourself or you can always request the help of professionals that can take a bit of the stress off of your shoulders by being your financial planning guides.
What Are the 5 Most Important Steps to Achieve Financial Freedom
1. Financial planning
Financial planning is at the top of the list in means of the steps you need to make to achieve your financial freedom. Having a well-put-together financial plan will help you along the way. You’ll need to calculate your financial independence number so you can have a clear picture of how much money you need to achieve your financial freedom. This is the step where you need to set your budgeting plan as well. Keep in mind that planning is the base from which you can take further action to achieve your goals.
2. Debt payoff for financial freedom
To have financial freedom is to also be debt-free. So paying your mortgage and all the debt you accumulated during your life needs to be addressed from the very beginning. Every financial plan you make needs to include the amount of money you owe and a clear plan in a set time frame to pay it off. In order to resolve it faster, you’ll need to put more money aside for debt payoff. This means you’ll have to be very mindful of all your expenses that you can cut so you can use the money to pay your debt.
3. Start saving
During this step to financial freedom, you will have to cut down on your expenses and put the money aside. This feels like a sacrifice when you do it, but it’s one that literally pays off in the long term if you want to achieve financial freedom. You will need to note down all the things you spend your money on that are not crucial to your wellbeing and that you can do without. If you look at this objectively maybe you don’t need the latest gadgets if the ones you have are functional, right? You can use the money to start a savings account or to pay your mortgage in advance.
4. Start investing for financial freedom
To be financially free you will need to have multiple income sources that you can rely on. Investing your savings in the stock market will provide you with more security while making you more money. You can get a taxable brokerage account to start investing your money. From this type of account, you can take your money out at any time, thus making it an investment you can depend on anytime.
5. Look for income-generating assets
In order to enjoy your financial freedom, money has to be consistent and keep on coming. The way to achieve this step to financial freedom is by buying some income-generating assets. One of the most common assets is having a good portfolio in the stock market. Another is having properties that you can sell when the prices are high. Real estate investments can also be a constant money-making tool if you rent them. This way you will get a monthly/yearly income without having to lift a finger.
Financial freedom is not easy to obtain, but with consistency, a clear plan in mind, and with help from experts you can start working on it right away. You’ll be thankful to yourself in the future for making this decision.