The key steps to financial independence

The key steps to financial independence

By Samela Fonseca

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Being financially comfortable is one of those positions that everyone would like to reach some point in their lives. There are moments in a teenager’s life when he or she cannot wait to move out of their parents’ house or work so that mom and dad don’t need to lend money as often. As an adult, financial independence could be the difference between being behind on your rent and staying up to date. So, if people have the desire to attain this lifestyle, what is actually stopping them, and how can you overcome these hurdles?

1. YOUR DESIRE MUST BE GREATER THAN YOUR FEAR Just like every other goal, a person must have the right mentality before they can set out to achieve financial independence. Too many times, people hesitate to take the necessary steps to becoming financially independent. Why? One word: fear. They are fearful of losing money while investing or trying new ways of making income, but as the heading suggests, your hunger to change your financial life is the key ingredient to succeeding. When you have successfully adopted this mentality, you will never settle for less. Challenging yourself does not necessarily mean taking a gamble. It just means that you are willing to take yourself out of your comfort zone in order to get what you want.

2. CREATE A PLAN AND BE REALISTIC On your journey to becoming financially independent, you will need to set out little targets that, when completed, will make your overall goal easier to accomplish. There is no point in trying to save a third of your income if you are spending money left, right and center. Monitoring your outgoings may mean buying what you need, not what catches your eye, and being critical of new, attractive deals that you come across, such as a pricey mobile phone contract with 20GB – even though you know you won’t come close to using all of that data.

3. START NOW AND DO NOT PROLONG THINGS Another problem that people have is that they tend to wait for the ‘right time’. But what if this ‘right time’ takes longer to come than expected or, worse, does not come at all? To be frank, this is just a lazy option, one with a little determination. If you are self-employed or a freelance worker who wants to make more income, use social media, networking sites and marketing tools to approach more clients, rather than simply hoping you will get noticed. Truthfully, you will not reach financial independence overnight, so do not let time be any more of a barrier by waiting for the ‘right time’.

4. LOOK FOR WAYS TO PUSH YOUR BUSINESS OR YOURSELF FORWARD Henry Ford, the founder of the Ford Motors, once said: ‘If everyone is moving forward together, then success takes care of itself.’ So how can an individual move forward in order to achieve financial independence? In the business sense, moving forward implies that one should stay relevant, whether expanding the target market or creating fresh ideas, etc. This is why motor companies always create new car models with new technology. For individuals, you can move forward by challenging yourself to gain a higher position at your workplace. If that is not available, you can use your skills and expertise to bring in more income, such as getting a second job.

5. AVOID DEBTS This one is a no-brainer. The more you borrow, the more debt you owe, and the more you start to feel like you are financially sinking. Do not just borrow because you have to, but be certain that you can pay it back within the agreed period. If you need to borrow money for a business plan, or something that will generate money for you in the future, then go for it – as long as you are sure you can pay it back.

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