Obtaining financial freedom may not be easy, but it is totally attainable. Experts show that your income does not necessarily matter if you want to achieve this goal. Whether you are receiving Rs 100k or Rs 10k per month, you can definitely have financial freedom as long as you incorporate the struggle with the right values. In fact, there are some people whose paychecks reach 5-6 digits who still suffer from financial debts. What should then be done to have financial freedom?
Prioritize your Needs over your Wants
Which do you think is more important that Louis Vuitton bag on sale or that bag of rice needed for the week’s supply?
Given the high price of this type of designer bag, each piece is equivalent to a sack of rice even if it’s just a knock-off.
Pay each Debt Little by Little
If you are indebted to your relatives, pay these debts little by little, so it won’t escalate to an amount impossible to pay. This is also applicable to loans, which should be settled every now and then until everything has been cleared off. Before doing so, list all your payables first and sort them out according to their date of
maturity and date of indebtedness. This is ideal to avoid incurring interests.
Put a Halt in your Unnecessary Expenditures
This is a must if you want to be able to set aside enough money to pay off your debts each month. A little bit of shopping each week may practically consume the amount that’s allocated for a certain debt. Have self-discipline in this aspect and you will thank yourself for it.
Have a Good Financial Plan
Just like creating a household budget, make a list of your cash inflows, monthly bills, and savings. If you still have enough money for supposedly wants, use this to pay your debt. Say goodbye to splurges and unnecessary expenditures for the meantime. After all, you will definitely get to that in due time. Meanwhile, you can even stop saving and assign the money to your debts first. Once you are debt-free, you can then start saving again.
This is one of the easiest means to pay off your debts. Having more jobs means increase of income; this can help minimize your debts hastily. You can either
apply for a part time job in other companies or go for a freelancer online. However, you need to make sure that the income you get from your part time is spent to pay your debts, and not to your wants.
How to Invest
There are only two certain things in life – taxes and death. While you may be able to cheat your local tax bureau, you can never cheat death. For this reason, we all need security for ourselves and for our loved ones. One way of getting this security is to spend your wealth on the right investment. But this decision can be confusing and critical since hard-earned money is being at stake here. Given the numerous types of investment in the market, which should you focus on?
Understand the Risks Involved
Whether you want to invest your money in a business, pension funds, insurance or bonds, always remember that there are accompanying risks to any type of investment that you may choose. Businesses and bonds greatly rely on the stability of the economy while insurances may also rely on the stability of your insurance provider. Technically, there is zero investment risk in just about any form of investment in the market. However, you can at least choose the right one by determining the risks involved in each choice. Understanding these risks gives you a heads up on what to expect from it and how to cope with it.
How Much Money can you Invest
Types of investments differ as there are short-term or long term investments. Such choices have differences in its ROI (return on investment) aspect as big money involved may mean larger profits while small amount involved may mean smaller profits that can turn big after a considerable period of time. Think
about the return of profits and the length of waiting time for your capital to roll back. Of course, you would never invest on something that cannot give good fruits in the future. Nevertheless, it is also necessary to be considerate of your current needs. Make sure that you still have sound financial status even after putting a parcel of your savings to your chosen investment because after doing so, you cannot be able to grab it back again that easily. Some even have penalties and fees for premature withdrawal.
How do you Want to Invest
Savings, bonds and securities, businesses, and the likes, are not the only available means of investment. You can also put your money into groups and organizations that are aligned with your beliefs and values. There are cooperatives and stock exchanges that are aimed at green goals like the betterment of the environment through the development of solar panels, creation of reforestation projects, and other similar purposes. If you love pets, you can also join groups that target on the rescue and care of cats and dogs.
These are the main criteria to consider if you want to spend your money on an investment that you will not regret in the course of time. Once you have picked the right investment, that’s when you can have security in your lifetime.