What is financial independence and how to achieve it? Just like the path to financial independence is unique to an individual so is the definition.
Financial independence Is a process that requires hard work, effort, and commitments over time.
Unless you are prepared to work hard and to stick to a dedicated financial plan, if not financial independence is not for you.
What is your aim of wanting financial independence?
Financial independence is not about attaining wealth or having a portfolio size, it is way more than that. It is not a grand strategy for you to become wealthy overnight. Having financial independence is to have the ability to improve your financial life all around.
Financial independence involves:
- Having enough financial security so you no longer have the fear of losing your job.
- Enough money after paying your bills, that you can still relax.
- Planning for retirement.
- Having emergency funds
- Paying off your debts.
- Offsetting your mortgage.
How to Attain financial independence
Since financial independence means different things to different people. We will be looking at general steps that you can apply that may work for you to attain your goal.
1. Create action plans for your goals:
Once you have established what your goals are for financial independence, take actionable steps to make it a reality.
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Start with small steps, like paying off debts, mortgage e.t.c.
Before moving on to the next goal, do make sure you complete the first goal. Use the divide and conquer strategy, where you focus and fulfill a specific goal before moving onto the next.
Make sure your goals are doable, if not you will expend your energy doing something that is not worthwhile.
2. Reduce your spending habits:
This will need a little bit of self-denial. It is creating extra room in your budget for far more important things.
For this effort to work, you need to dedicate and be purposeful to what you have set your mind on.
Eliminate any form of unnecessary or expenses for things that ain’t needed at that time. This will be an uncomfortable step but it will help you in your journey to financial independence.
3. Enforce a workable investment:
As much as saving money is important so are investments, because with investments you make more money. Your savings efforts will be complemented when you get a return on investments.
4. Implement your actionable plan now:
Procrastination Will do you good. Rather it will make you not make decisions that you should have taken.
Creating financial independence is a lifetime goal, and to fulfill any part of that goal, speed is of the essence.
Having momentum is very important to implement your plans. The sooner you start the faster you get to meet up with your goals.
5. Save as much as you can:
Saving as we all know is difficult, but to attain that financial independence, saving habits is a must-have.
There is nothing like having too much. Saving is an ongoing process, it is something you should indulge in continually.
If you are saving like 10% of your monthly income before, make it 15%, keep saving.
Set a goal towards why you should be saying, is it savings towards a retirement plan? Or saving to having another source of income?.
In conclusion, financial independence is for those willing to work hard, those that can deny themselves certain things to achieve that goal. Financial independence is continuous, it is a lifestyle. Embrace that lifestyle today, work on it, and financial independence is yours. Get to work and build your financial dreams today.