Money is one of the biggest issues that lots of people struggle with all their lives. However, it doesn’t have to be that way. With the right attitude, you can live without having to worry about money, no matter how much you earn. Being able to live without being a slave to money is what is called financial independence.
So, how do you go about being financially free? Achieving financial independence is not that hard. It doesn’t even need any deep understanding of the academic concepts of finance. It is more of personal discipline than anything else.
If you have been struggling in trying to achieve financial independence, here are 3 proven methods that will lead you there.
Make a goal and be committed to it
To attain financial independence, you have to decide that you want it and make steps that can lead in that direction.
For instance, you can decide to cut your expenses, and save a specific amount of money every month. This may be painful at first because it could mean cutting out some of the luxuries you enjoy every day. The best part is that once you settle in on this routine, you can have enough savings to either retire or start a business that can give you an even higher income to live the life you want.
To make the savings goal even easier to attain, always keep reminding yourself of how much easier life will be, once you stop living purely based on money that you have to work for on an everyday basis.
Find ways to grow your income
One of the most important things to understand about money is that you will always need more over time. That’s because fiat currencies are deflationary, and that means what a dollar can buy today, will be much lower 10 years from now. As such, saving money alone is not enough. You also have to find a way that your savings can keep up with the rate of inflation. This can be through active investments such as trading in financial instruments, or passive income investments that pay you at the same rate, or above the prevailing inflation rate.
The other way to grow your income and become financially free is to invest in your skills. Not everyone was cut out to be a businessperson or an investor. However, if you can invest in a skill that you love, you should be able to grow in your career and have your income rise over time.
Eliminate personal debt
No matter how much you want to be financially free, you can’t do it when there are monetary obligations that carry interest. That’s why you need to ensure that you are either debt free, or your personal debt is so low that it takes an insignificant part of your income whenever it is due.
If you are in debt and want to achieve financial independence, one of the steps you can take is to consolidate your debts. This helps you get a lower interest rate, and also have more defined repayment dates that can help you plan ahead for the payments. You can also increase the amounts you pay towards your loans, and get it over with as fast as possible.
Once this is done, and you inculcate a culture of saving and investing, then you would be on your way to financial independence.
Recap
Achieving financial independence is easy, but it takes discipline. You just need to set a goal for saving and use the savings to invest in income-generating activities. Also make sure to get out of personal debt, as it is one of the things that can hold you back from achieving independence. If you follow these steps, you should be in a position to live your best life, without ever having to worry about money.