10 Steps to Attain Financial Independence are listed and explicated in this article. It is advisable to pay attention to all of the points.
- Avoiding Getting Into Consumer Debt is one of the Steps to Attain Financial Independence
- Don’t Try To Keep Up With Your Neighbours
- Spend Less, Save, and Invest More
- Pay yourself first is one of the Steps to Attain Financial Independence
- Invest In Income-Generating Assets
- Keep Investing
- Get a Part-Time Job
- Having a Flexible Lifestyle is one of the Steps to Attain Financial Independence
- Have a Complementary Spouse
- Explore and Maximize Opportunities
We all want to attain that measure of financial independence that will give us a sense of satisfaction in life. This is because lack of money can often be the cause of a lot of worries, often leading to increased health-related issues as a result of thinking and anxiety.
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Thus, gaining a certain level of financial independence guarantees peace of mind and a feeling of contentment.
But how do we achieve that acceptable level of financial independence when, in most cases, our salaried jobs don’t ensure that?
How do we ensure we do not have to live from hand to mouth, relying exclusively on the meager wages and salaries we often get from our 9 to 5 jobs?
Well, that is the thrust of this post, as we are going to explore at least 10 ways in which we can overcome financial stress and uncertainties and achieve true financial independence. Read on and gain some valuable insight into this all-important issue.
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1. Avoiding Getting Into Consumer Debt is one of the Steps to Attain Financial Independence
This is one of the key reasons most people remain perpetually poor and hardly achieve any form of financial independence.
Consumer debts include buying with credit cards, getting payday and car loans, and generally engaging in spending money you haven’t truly earned yet. Once you get stuck in this addiction, it is hard to ever get out of and achieve financial independence.
One thing you need to understand is that any money you spend through your credit card is never your money; you are enriching the banks, while deflating your own resources, often on things you can do without. Learn to get rid of high-interest debts and make sure your money works for you, instead of the banks.
2. Don’t Try To Keep Up With Your Neighbours
In other words, ignore the Joneses. Often, one of the reasons why we get into a financial meltdown and can’t make our money grow is because we want to keep up with our neighbors.
We buy things we don’t need, live in houses we can’t afford, and send our kids to schools way out of our league simply because we want to impress others.
All these end up depleting our resources and keeping us in perpetual financial bondage. You wanna gain financial security?
Ditch that mentality of measuring up to your neighbors. Live to impress yourself, not others. That way, you will live within your means and save money for investment.
3. Spend Less, Save, and Invest More
Most of us live way above our means, while our finances are in tatters. We buy things we don’t need, even getting into debt just to live a life of luxury that is way above our paygrade.
That is not how to achieve true financial stability. You need to track your expenses so that you do not live above your means.
Secondly, find a way to cut out excess expenses and channel those into savings, and ultimately investment. That way, you gradually build up your finances from scratch and achieve financial independence in the long term.
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4. Pay yourself first is one of the Steps to Attain Financial Independence
This may sound a bit selfish and confusing, but it is always advisable that you put yourself first once money comes your way. Thus, you need to make it a priority to set aside savannah first before thinking of disbursing money for other issues.
Save before you pay your bills, purchase groceries, or even your rent. Your savings is paramount. You need to set aside that first before you now work with the money left.
That is how to ensure you do not end up battling to save after you have already started spending the money you had from the word go.
5. Invest In Income-Generating Assets
Once you have started paying yourself first, you do not allow that money to sit idly in a savings account. Rather, use it wisely by investing in income-generating assets such as good stocks, treasury bills, federal government bonds, and even good mutual funds. That way, you allow your money to ultimately work for you as the return on investment keeps trickling in.
6. Keep Investing
Financially buoyant people are those who do not simply save for saving sake, but those who understand the fact that for your savings to be meaningful, they need to be invested in good assets that will yield a long-term return on investment in the long term.
As earlier mentioned, good stocks are one way of turning your savings into an investment portfolio and ensuring the proliferation of your assets and finances.
Another way is ensuring your set aside money and invest in a retirement plan. That way, you do not need to struggle to live a decent life in your retirement years.
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7. Get a Part-Time Job
One of the drawbacks to people achieving financial independence is relying on one single source of income. Apart from the fact that it is unlikely to allow you to live a decent life and still save for the rainy day, you need to consider what could happen if that singular source of income dries up.
Ensure you have a part-time job on the side, as this affords you the opportunity of having spare money and not relying entirely on your 9-5 salaried job for both sustenance and savings.
8. Having a Flexible Lifestyle is one of the Steps to Attain Financial Independence
Be flexible in your lifestyle so much so that in their worst-case scenario where you lose your day job, you do not crash financially before the next job comes your way.
This still feeds into you living a frugal life and not living above your means. Even if you have a pay raise, do not consider raising your standard of living, instead increase your savings.
Leading a flexible life ensures you always live within your means and do not go overboard financially even when things are rough.
9. Have a Complementary Spouse
This is one of the ineluctable steps to attain Financial Independence, although many people may want to ignore this line, it factors in if you are ever going to achieve true financial independence.
This is because no matter how successful you are in managing money and investments if you do not have a frugal and invent-oriented spouse, you will achieve very little by way of success.
It will be more like a struggle in a quicksand. If you make a mistake and marry the wrong person, it is almost certain that the emotional, financial and social toll you endure in that treacherous marriage will take its toll on your finances, and ultimately on how you secure financial freedom.
This is because as you try to build your life and future, he or she is out there pulling you down financially, and flushing your money down the drain of impulse buying. So, choose your spouse carefully. It could be the difference between a life of financial prosperity and that of penury.
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10. Explore and Maximize Opportunities
Often, the difference between a poor man and a rich one is maximizing opportunities and exploring investment options when they present themselves.
You need to be financially saving and understand the dynamics of wealth creation. Income is not wealth. Even if you are a salary-earner, you have to, at some, point, think of ways of using the available resources at your disposal to generate your own wealth.
Cash in on opportunities and turn them to your own advantage. Save money, invest in income-generating assets, sit back and watch your investment grow, and your life forever changed. That is the bedrock of financial independence: having money work for you and not the other way around.