Secure your financial future and reach your money goals faster with this simple four-step plan. Get on track for true financial freedom today!
This article is the main guideline for any readers looking to make a change in their financial life, going from their current status (whichever it may be) to not worrying about money. It’s essential to keep in mind that this process is not a short one, it can take anywhere from a year to a decade.
What is Financial Freedom?
But first, we must talk about financial freedom, what does it mean and how do we know we have reached it? The idea behind financial freedom, which was introduced with the FIRE movement means that we do not have to retire at the age our country dictates. If we are able to live below our means, save money and invest it properly. We can retire as soon as we have a large enough nest egg.
Let’s assume you are currently spending 30K a year on your entire living expenses, this means that you are able to live off those 30K without needing to work. So the formula known as the 4% rule dictates that as long as your yearly expenses amount to 4% of your nest egg it means you are able to retire. Because the wealth you have accumulated is still invested and keeps earning you money all the time. So by taking less than 4% your nest egg will remain balanced and allow you to enjoy your life.
Now obviously this is a bit tricky because it means you have to always keep an eye out on the nest egg, and it can be stressful if there’s a large dip in the market that can really hurt your retirement. So we are not going to focus all our eggs on one pile of money, it’s important to diversify.
The 4 steps to financial freedom:
These 4 steps are separated to help you understand them individually, it is possible to start with more than one at a time but it’s not recommended. Studies have shown that focusing on one task at a time leads to higher chances of success. Because you are able to focus all your attention on a single problem you are more likely to reach a good result.
Step 1 – Organize your finances
This step is extremely important, you can’t go anywhere without a plan and goals. You need to first figure out where you are currently standing to know what should happen next. There are many ways to begin saving money, you can even start a saving money challenge that can boost your resolve to improve your financial situation.
Saving money is the best place to start, but we also need to work on our expenses. Finding ways to pay less makes it much easier to save money, there are many financial planners that help with managing your income and expenses. The most common way to create a habit of saving is to start a budget, there are many available templates that can help you with that. Consider setting aside money for an emergency fund that will keep you ready for any situation.
This is just the tip of the iceberg in regard to saving money and organizing our finances, but following these articles will give you a good foundation to move on to the next step.
Step 2 – Invest wisely
Now that you have begun saving money and are able to set aside a certain amount each month it’s not worth anything if it is not working for you. Investing allows your money to grow, by doing it properly you minimize the chances of losing money and increase the potential returns.
In this day and age, there are endless investment opportunities: cryptocurrencies, the stock market, money lending, real estate or even business investments. The options are available, you just need to look for them. The most important part is doing your own due diligence, there aren’t any perfect opportunities and you must always be wary of unrealistic returns.
Even though they can be tempting you must always stay true to yourself and don’t look for shortcuts. They usually don’t end well, especially in the world of crypto you have to learn how to avoid scams. There are tons of good projects that allow you to do incredible things like earn coins through playing games, but you must always read up on these companies to make sure they are trustworthy.
Take the time to familiarize yourself with the investing world you are interested in approaching before placing your hard-earned cash. The first and second steps are mandatory for everyone aiming to reach financial freedom, and the next steps are bonuses for those who are willing to put in the extra effort and fast-track their process. It’s not easy to earn money online but it’s definitely possible if you plan ahead and put in the effort.
Step 3 – Increase your income
This blog is the business I started, this is because I want to be able to leave my 9-5 job in the future and still make money. So for that, you have to start something on your own, there are many different business options you could take. From starting a YouTube channel, a blog or even a side hustle as a freelancer. The important thing is that you build something that has no ceiling, no matter how good you are at your job at the end of the day there’s a limit to your time and the salary you can make in your field.
Starting your business takes time, and it can be a while until you start seeing results. But the important part is to not give up and keep working on it, I am writing this article when my website still had only 1 visitor even though I have been writing for a while now. I am not planning to give up, I just have to follow a plan I made for myself which is to focus on my own content until I reach a point where the blog is filled with a decent amount of articles and valuable content and that’s when I start reaching out to other bloggers to request collaborations. I promise to share my insights along the way and hope you start your journey as well, in whatever way you decide to start.
Step 4 – Focus on personal growth
This last step is a really big one, if we want to get ahead we need to constantly be learning and improving. There’s never an end to the things we are able to learn and that is why we should always broaden our minds by reading and buying new courses about topics we can get better at. I have recently begun my blogging journey and began following multiple influencers and bloggers on the topic, I have a lot to learn and I am sure you do as well.
Besides learning we can always get better and more efficient, that’s why I love using Notion so much. I am able to use it for my own needs, like managing my content strategy and managing my tasks. But more than that I can take any page I create and turn it into a template. That template can then be sold to others as a digital product.
The road to financial freedom is long, it’s hard and not everyone is willing to take it. But the rewards are worth it, being able to enjoy yourself and focus on the things that you want to do is priceless. One more thing to keep in mind before I finish, these steps are repeated endlessly. I am constantly revisiting my finances, trying to save money, and attempting to avoid stupid purchases (I have a weakness to Video Games). So you should aim to be a little better and I hope you come back again to learn more about money management.