Becoming financially independent is something pretty much everyone aspires to. Yet, you need a detailed plan that you will commit to in order to gain that sort of freedom. To get you going in the right direction, below is a list of factors that will help you get there.
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The importance of financial independence
Regardless of the economic climate, money is the main source of stress in the majority of people. To begin with, our society equates success with wealth. Those who face money issues end up feeling worthless as a result. And by feeling unable to provide for their families and loved ones, people feel anxious and frustrated as this equates to their worst existential fears. They tend to adopt unhealthy habits such as smoking and even turn to alcohol in an effort to temporarily escape the pressure as they often even have difficulties sleeping.
The good news is that financial hardship is often the result of poor habits. And being financially independent does not only benefit your bottom line but also your mind. It leads to higher self-esteem, stronger resilience, increased sense of fulfillment and room to dream beyond day-to-day errands.
How to Achieve Your Financial Goals?
The first step is that you have to decide you want it more than you are afraid of the changes you will have to make to get there. If you are ready to do that, you need to break some common myths so you understand the core concept of wealth.
Understand income does not equal wealth
Most people believe the key to wealth is a high-paying job. Obviously, this makes it easier but the true key is to spend less than what you make. Even a professional athlete that makes millions will go bankrupt with excessive spending habits.
- Remember That Taxes Are Important
When it comes to tax, remember that no decision is too small. Financially independent individuals rely less on taxable income as they generate large unrealized gains. These gains can come from real estate appreciation, unrealized capital gains, and from using tax advantages to shield profits.
- Find a complementary spouse
Believe it or not, the emotional, psychological and financial toll that marrying the wrong person can take on your life can overshadow any career achievement and make any figure on your bank account vanish into thin air. Period.
Money management tips
After you have laid the basis, you need to make the most of your present circumstances as you will not be changing your lifestyle overnight. There are simple things that will lead you to immediate results, such as:
- Side-hustle
Getting a side-job or private investments can be great ways to accumulate wealth. Also, if you find one that will make you money while you sleep, you got yourself a winner! Diversifying your income sources is just as important as diversifying your investments as it also insulates you from exterior factors and uncertainties.
- Budgeting
Tracking your expenses is the first step towards saving. By learning more about your spending, you can more easily identify areas where you can cut costs. If you are really struggling to cut your spending, try freezing your cards, literally. By having to wait for the ice to melt, at least you’ll increase your odds of changing this poor habit.
- Vowing to Always Save Money Regardless of Your Income
if you are new to saving, you don’t need to immediately put aside half of your paycheck. Start with a small amount, as small as $20 per paycheck – and increase it as you get more comfortable with the process. Moreover, you can save just by finding a better energy provider whose rate suits your needs better than your current one. For example, Starion Energy has many different electricity deals and this step alone can result in a few hundreds of dollars off your annual electricity bill.
Conclusion- Financial Freedom Means Different Things to Different People
For someone, financial freedom means you have enough to meet your needs and any unforeseen costs. For others, it is about abundant wealth. Yet, for many, being financially independent means having the freedom to spend your time in whichever way you want. The bottom line is that if you start each day feeling like you are unwrapping a Christmas gift, even while you work, and you fall asleep not wishing you had an entirely different life, odds are you on the right path towards financial freedom.
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