How To Obtain Financial Freedom

by | Nov 4, 2017 | Personal Development, Prosperity of Life

You are probably living under a rock if you have never heard of or thought of being financially independent or having financial freedom. While people talk about it often, there are many ideas of what this means. The definition of financial independence has enough wealth to live off of without working. People who have financial freedom have assets that generate income that is at least equal to their expenses. Regardless of the stage of life, financial independence is a fundamental goal to be working towards.

The first thing to note about obtaining financial freedom is understanding and accepting that it won’t just happen or happen overnight. It requires a detailed plan and the determination to commit to it every day.

To create a solid financial plan, first start with the cornerstones of the process:

  • Review current assets and investments
    • Are they giving you the best possible returns?
  • Review what liabilities or debts you have
    • What changes could you make to reduce those now?

After analyzing your income and expenses, get your plan written down before putting into motion. Keep these tips in mind when creating your plan:

  • Widen The Gap
    • You want to create as big of a gap between what you earn and what you spend as you can. The larger the gap, the larger the opportunity for financial freedom. However, remember that it may be tough figuring out how much of a gap you can live with, so shooting for more is always a safe choice.
  • Debt Free
    • List all current debts such as student loans, credit cards, parent loans, car finance, etc.
    • Mortgage is a debt, but it is also a long-term investment; if the final payments are near, add to the debt list.
  • Extra Savings
    • Find ways to save more money. For example, take the extra pay from a promotion and put it directly into the bank. By setting up a plan to automatically take away the extra income, it is less likely to be missed.

Financial freedom comes with many different rewards. Besides the monetary benefits, people who have acquired financial independence experience less stress, more energy for self-improvement, more opportunities to think long term, and even benefits in investments and assets.