Does it possible to anyone achieve financial freedom? Yes. Absolutely Yes. No matter where are you today, what financial trouble you have today; if you follow proven and smart ways, you can achieve financial freedom.
Financial freedom is the process of having ownership of your finances and remove the barrier to have the ability not to be limited by money concerns. With proper planning and action, financial freedom can be achievable.
Write down your financial goals and prepare 7 step action plan
What are your financial goals? Why you need money?? Whatever it is, it will be pretty hard to reach financial freedom without knowing why you need money. Know your “Why”. Writing down your financial goals and preparing proper action plan will give you vision for your financial success where you want to reach. Right now take a clean sheet paper and make a list of your financial goals you want to accomplish. For example:
- I want to earn $200k per year
- I want to pay off $50k student loans
- I want to earn passive ways and travel 20 countries
- I want to earn $500k and buy a gorgeous house
- I want to earn $100k and pay off debts of my parents.
Follow the 7 step formula of effective action plan, one of the best action plan formula suggested by Brian Tracy in his “Eat That Frog” book.
Step 1. Decide what exactly financial freedom you want.
Step 2. Write them down and make it visible.
Step 3. Set a deadline of your goal and/or a couple of deadlines for your all goals.
Step 4. Prepare a list of everything those needed to achieve your financial goals.
Step 5. Organize your list into a plan.
Step 6. Take action on your financial plan immediately.
Step 7. Do something every single day to reach your goal.
What is the power of written goal? It’s motivates you and help you to keep progress.
Learn money management techniques and financial skills
According to Robert Kiyosaki, writer of Rich Dad, Poor Dad, “Sadly, money is not taught in schools. Schools focus on scholastic and professional skills, but not on financial skills. This explains how smart bankers, doctors, and accountants who earned excellent grades may struggle financially all of their lives.”
Think about money positively
We use money everyday to enhance our life, it’s quite necessary like food. It’s necessary to buy the things we need, buy the food we eat and live the life we want.
But many people thinks about money negatively. For example,
- Many people thinks that “Money is the root of all evil”, which is not even the accurate Biblical statement. The Bible says that, “Love of money is the root of all evil”, which is different from money itself. The love of money can make people greedy, but money itself is a tool, yes, just a tool. For example, a hammer. It can be used for good purposes, for example, making your door. Also it can used for bad purpose, for example, killing people. Money is just a object, it’s neither good or bad. If you use money for bad purposes then it’s evil, but if you use money for secure retirement, to make sure your kids can go to school and college, help poor and needy people, then money is good.
- When it comes to making money, many people face hard obstacles, even the hardest obstacles. Then they just feel that making money is bad.
- According to Jen Sincero, writer of You are a badass at making money, people who don’t make a lot of money often feel shame when it comes to making money.
If you want to reach and experience financial freedom, you need to look at money as a tool that will help you to achieve dreams and live a stress-free life that you can enjoy. If your perspective about money is negative, you’ll subconsciously sabotage your chances of making money and keep those money.
Invest on asset, not liability
If you want to have financial freedom, it’s one of the most important step to invest on asset, not liability. According to Robert Kiyosaki, “Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets”. But how to determine which one asset and which one liability? Robert Kiyosaki says, “An asset puts money in my pocket. A liability takes money out of my pocket.”
Create a budget & stick with it
Creating a budget how much you will spend every month, sticking with it is hard but better pay off for the long run.
Understand your expenses
Do you know exactly what the amount of expenses you generate on any given month? Many people don’t know. Keep track of your all expenses from household utilities to restaurant bills and all others both variable and fixed. This process will allow you to understand the whole picture.
Remove unnecessary expenses
Do you have unnecessary expenses? Here are some examples of unnecessary expenses.
- Buying snack all the time at gas station.
- Costly personal care products.
- Unnecessary laundry
- Energy drinks and foods
- Not carrying a reusable coffee cup
- Buying individual drinks in general
- Not taking advantage of product discounts
Track down your expenses and remove your unnecessary expenses.
Invest in emergency fund
Save 10% of your monthly income behind emergency fund. It’s quite important part of a healthy personal finance plan. If any unfortunate or unexpected situation arises – spend from it, otherwise don’t touch this amount, rather earn interest from this amount.
Create retirement fund
Save 10% of your monthly income behind retirement fund. If you are now 20 years old, you offered a job $40k per year. If you save 10% of your annual income, then by the retirement age of 60, you will have $2.0 million saved up. Wow!!
The people who have financial freedom spend less than he needed to, on the contrary the people who struggle financially spends more money doesn’t he/she have. The poor and middle class people want to act as rich, thus they struggle financially in the long run. On the other hand, the financially freedom people don’t act like rich and don’t show off.