Steps to financial independence- start today
Financial independence often seems like a pipe dream for many people. The reality however, is that getting to a point of financial independence means that individuals have to take clear and measurable steps towards being financially free.
With the high rates of debt and low income growth rates, many people may not quite see themselves achieving financial independence. The good news is that it is possible.
Steps to financial independence:
The true secret to increasing your net worth is to spend less than you make. It’s important to understand that income is not wealth. The level of your wealth should be measured by the length of time you could maintain your standard of living without an additional pay cheque.
You must have surplus funds to invest. This is why emphasising savings is so important.
Financially independent individuals generate large gains through real estate appreciation or even profits made through tax-free accounts.
Start by picking a reasonable and attainable goal and start small. This may mean changing your lifestyle.
Aim to increase your income, control your spending habits, make sure that you determine investment objectives and that you understand your savings patterns.
Learn to live beneath your means and get comfortable with the term “delayed gratification”.
One of the key steps to financial independence is to always keep your career or business moving forward.
Vow to always save money- no matter what your income is. To keep yourself accountable, review your budget monthly.
Make sure that you have an emergency fund. Ideally, you should have three to six months’ savings put aside in an emergency fund. As a general rule of thumb, your savings should be sufficient to cover all of your personal expenses. Your savings may provide you with the capital to feed your investments. Saving comes with minimal risk.