What is financial freedom? Financial freedom is having enough wealth to sustain living a life without depending on employment or government benefits. Most people who are financially independent generate a passive income either from investments, businesses,savings or other combined opportunities.
The world’s economy today is unpredictable which gives no assurance in keeping one’s job. Aside from economic instability, cost of living is also increasing on an average of 4% yearly and wages stay the same. Almost everyone depend on employment salary to sustain life’s basic needs. This predicament is true to a lot of individuals around the world, and so some even opt to push retirement further or do not want to retire at all. The only way to address this is to look for other ways to earn money aside from fortnightly pay.
One of the advantages of financial freedom is not worrying about money for your future retirement. A lot of people think that retirement benefits given by the government or money saved throughout employment is enough. The funds can definitely compensate basic necessities but just enough for a life of mediocre, since there is no extra money to spend on other things.
Additionally, retirement is supposed to be a time when one can enjoy freedom from office hours and pursue the things that were put on hold because of work. If a person is able to afford other things aside from basic needs without incurring debt when retiring, then life would be fantastic.
Learning the basic ways to gain financial freedom is a step closer to a fully enjoyable retirement life without worrying about expenses, debt or ceasing of funds.
Here are some steps to consider when aiming for financial freedom:
Step 1: Invest your money yourself after extensive research and learning about the different types of products that are available. This can be time consuming and daunting to those unfamiliar with different types of financial products. However there are many free websites that explain the basics and help you to make comparisons.
Step 2: Keep track of what you are spending your money on. Most people do not know what they spend their money on. Don't assume you're in the group that does. Each day write down your expenditure and you will quickly identify where your money goes.
Step 3: Create a financial plan. Most banks offer free budgeting forms so research and may use of what they have to offer. This is a very important step as it will help you to know where you are going.
Step 4: When thinking about spending money, think long term. Ask yourself do you really need the item? Are you buying the product at the right price? Where can you get the best deal if you decide to proceed? Always wait a week before making large purchases so that you can ponder the alternatives. Make sure that your spending is smart.
Step 5: Consider alternative income streams, what else could you do, that could generate a passive income for yourself? How can you turn your hobbies into a cash making business? Reducing TV watching and the like could let you do something that is pleasurable and will make you money. Before giving up one job make certain that you have another job to go to.
Step 6: Less can lead to more if you aim for a simple life by Un-complicating your possessions, activities and obligations. Identify unused possessions and the size of your home? How many hours do you commute each day, can you reduce this? How can you improve the quality of your life making it less stressful, more balanced, and create the time for the things that makes you happier.
Step 7: Good health is important so take good care of yourself and do what is sensible. The importance of knowing ways to find financial freedom is being able to do something better than one’s current situation. It may be freeing oneself from debt, or finding more time to spend with family rather than working, or even pursuing one’s dream and passion, such as travelling and getting into business.
Finally, retiring would be something retirees would be looking forward into, especially when knowing they can relax and not worry about money. Being financially free in retirement will bring more peace of mind and an end to slavery from employment.
The book Your Retirement Planning Guide can provide more information in ways to gain financial freedom in retirement. Your Retirement Planning Guide, contains tips on financial retirement options that would help in preparing future retirement.