Financial Independence: The Best Kind of Freedom

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There is little voice inside all of us – we call her ‘The Hippy’ – that wishes freedom could mean a life spent dancing in the sunshine, wearing flowers in our hair and sandals on our feet as we float about the earth soaking up different beaches and vistas. Unfortunately, though, this is what freedom refers to. Not in the real world. Instead, when we talk about being free, we’re talking about financial independence.

This doesn’t mean having four holiday homes around the world and a private jet to take you there; it just means having the ability to live comfortably off your savings and investments without worrying about debt.

Sure, it takes a plan of action to make it possible, but that’s the point: it’s possible. So, without further ado, here are some great ways to get started on your journey to financial independence (aka freedom).

1. Know Your Definition

Everyone’s vision of financial independence will be different. Not only that, but your visions will probably change over the course of your lifetime. Nonetheless, the best way to start is by considering what your vision actually looks like and then deciding how to get there using some qualified financial advice. Of course, the sooner you can start saving and investing, the better.

 

2. Budgeting Is Essential

You can’t track your finances effectively if you don’t have a budget. It’s the undisputed hero of achieving financial independence – it’s as simple as that.

 

3. Don’t Spend More Than You Earn

You don’t need to have a degree in math to know the importance of spending less than you earn. No one has gone broke from adhering to this rule. However, to really make the most out of this and create a world of financial freedom, make sure you put between 10% and 15% of your gross income in savings or investments every week.

 

4. Get out of Debt ASAP

If you think you’re safe because consumer debt levels have fallen slightly since the big banks failed us in 2008, think again. Home loans, student loan, auto and credit card debts, payday loans, personal loans – they’ve all been creeping up again. As such, you need to get rid of your debts, whether that is using a debtconsolidation.loans company or the avalanche method it doesn’t matter. It’s just one of the most effective things you can do to free up money to save and invest.

 

5. Careers Play A Role

If you have a job you love, you don’t need to hand in a letter of resignation in order to find a job that pays you an above average salary. However, it’s important to know that you can’t really enjoy any financial independence without a steady income. It’s what fuels most savings and investments, especially those that will build over time.

 

6. Generate A Second Income

Not all investments are born equal, which is why we recommend you invest in the kind of assets – stocks, shares, real estate, collectibles, anything – that will make money in the long haul. That’s what guarantees financial freedom.