Ever hoped to achieve financial freedom and create financial freedom and retire early? Ever wanted to not have to be tied to a job? This is a frequent goal that many desire, but few know how to accomplish. How would you provide for yourself anyways? No matter how hard you might try, the “job” always seems to weigh on your neck, right? Does financial freedom always seem like an impossible dream? Is there a way to turn the tables on life and not have to be a slave to money anymore?
The secret to legitimate financial freedom is to boost your income and minimize your expenses. This may not be as seemingly impossible as you might think. All it takes is some self-control, some will power, some planning, and a few tips.
1) Live Frugally
Live within your means… without chasing after useless things that will just end up in a yard sale. Cook your own meals instead of regularly eating out. You will be taken aback at how much money you will have conserved. Financial freedom goes hand in hand with avoiding excessive consumptions.
2) Reduce Your Expenses
Be conscious of your cash outflow. Keep a record of your expenses and compare them to a pre thought out “financial freedom” budget. You must commit to managing your recurring expenses if financial independence is your objective. Do you actually need the most expensive option for cable? Do you really need yet another pair of shoes?
3) Get Out of Debt
When you reduce your living expenses, you will free up some financial resources for other things. Debt is slavery. Financial freedom involves liberation from consumer debt. Increase the payment on your credit cards with your extra cash flow. Start with the credit card with the highest interest rate. This will significantly reduce your debt service, and it is similar to earning your credit card’s interest rate on your own money, since you no longer have to pay them that interest payment.
4) Save For Your Retirement
Once you start repaying your highest interest rate credit cards, there will be an even larger increase in your excess monthly cash flow. Start putting that cash into investments that can produce additional excess income. It is smart to find investments that are scalable, so that you can add money to them at any time, and have your next dollar earn the same return as the previous dollar. You create financial freedom when your passive income exceeds your living expenses. Make money your slave, don’t be a slave to money.
5) Invest In Your Retirement
Keep an eye out for investments where you can taken risk out of the equation soon, while making a fat return. Certain managed investment accounts can accomplish this. These are game changing financial freedom tools. The main risk to control for is risk of loss of investment principle. When you’ve removed your original investment principal from the investment, you’ve completely removed that risk out of the equation and your money in that account is now growing for you practically risk free.
6) Have a Goal For Your Retirement Date
What the mind can conceive and believe, it can achieve. Your key financial levers for getting there are 1) the amount of investment capital you are working with and 2) the return on your investment. When planning your financial freedom, start at the end and work backwards, to calculate how much return you think you’ll need to get, and how much money you’ll need to start with. Can you get only 5% return or can you get a 20% return? Some currency trading strategies can perform at these higher levels. Or perhaps, can you use $100k of other people’s money, or can you only work with your own savings? Once you determine those two factors, you can then begin looking for ways to get access to that amount of capital and generate that target rate of return.
7) Control Your Retirement Expenses
If you have your house and cars mostly paid off, you might not actually need very much money in order to retire early. This is especially true if you retire in a place like Panama. You can live very comfortably there, on a low budget. The more excess cash flow you’ve been able to build, the more places you can live, for whatever length of time you like. This is financial independence. By adhering to the above financial freedom plan you will be shocked at how much you passive income you can actually create.
By following to the above financial freedom plan, you will see a reduction in your regular expenses and an increase in your monthly excess income. Then use that excess income to rapidly reduce your debt expenses. Remember to save something for investing. Prepare your retirement goals by beginning with the end in mind. Be disciplined in living within your means and financial freedom will become your reality.