Financial independence should be the goal of every right thinking individual. It is not as if some people would not love to be financially independent, but they actually don’t know how to do that. To achieve financial independence, one needs financial intelligence and financial intelligence is hard to come by.
Basically, when discussing financial independence, there are a lot of things that should be taken into consideration. So in this guide, we will discuss some of the following terms and perhaps detail to you how to reach financial independence.
- How to achieve financial independence
- How to calculate Financial independence
- How to gain financial independence and retire early
- How much money do you need for financial independence
- How financial problems can cause divorce
- How to gain financial independence from parents
Financial independence is a very broad topic and cannot be exhausted in one article. The topic is so broad that it is a niche on its own with sub niches. This article is a summary of the key things you do to get financial freedom.
Let‘s get going by defining the term financial independence. So what is financial independence…?
What is Financial Independence?
According to Wikipedia, the world’s best and free online encyclopedia, Financial independence is the status of having enough income to pay one’s living expenses for the rest of one’s life without getting to be employed or dependent on others. Income earned without having to work a job is commonly referred to as passive income.
Financial freedom is not almost the same thing as financial independence, the website passiveincomemd, breaks down the difference as; financial independence allows you to be self-insured against a financial catastrophe in the case of disability or death, saving you those monthly premiums. Financial independence allows you to be self-insured against the cost of unexpected expenses and lifestyle upgrade.
How to Achieve Financial Independence and Freedom in 2021
To Become Financial Independence, we have discuss the major steps to be taken if you want to gain financial independence and freedom. We will also discuss what not to do if you do not want to stay broke. We will also see the key habits you should develop in order to get financially independent and retire young.
So here are the 10 steps to take in order to be financially independence;
1. Have a multiple stream of Income.
This is key and the number one. Having a multiple stream of income ensures that you will always have what to fall back on. It also ensures that you save money and have more to invest on. Having one source or stream of income can be very risky especially if it’s a job. Multiple stream of income gives you a sense of financial security.
2. Learn a high Income Skill and Get a Job near You that pays Great
Getting a job is not actual a great step to financial freedom. But all jobs are not equal. Before, i use to have this financial education that jobs are for broke people who wants to remain broke. But as time went on and I became more matured in terms of financial independence, i had to change the notion. Actually, a Job is a means to an end. With a good and high paying Job, you can save a lot of money and invest in stock, real estate or even crypto currency. So learn a high income skill today and get a job near you.
3. Stay away from Debt
You can’t to be financially free when you are always in debt. Stay away from debt in order to be financially free. Keep your credit card away from debt. Getting rid of your debts will ensure that you have a free start to your savings. You can’t save money and invest when you are on debt.
4. Set a goal of how much you want to earn.
Yu cannot be truly financially free when you don’t know how much will make you financially free! Here is a good example. For me I decided from my estimated expenses and cost of living, that $50,000 a month will be my benchmark for financial freedom, so i set goals on that and i created a master plan on how to earn $50,000 a month from blogging. Now that is what i call financial goal setting. And that is how to calculate your financial freedom.
5. Know and Lower your cost of Living
Living below your means or within your means can be a game changer. A lot of people are actually living above their income or means. If you are spending more than you earn, you can’t save, and if you can’t save, you can’t invest as well.
6. Change your mentality about money
It all starts in the mind, if you do not believe that you can become financially free and independent, you will never be. Poverty is a mindset, wealth is a mindset. More money does not equal wealth, and that is why central banks don’t print more money when a country is in debt. Money management will guarantee your financial freedom.
7. Continuous Education
Keep learning and relearning. If you want to maintain your financial freedom and become financially independent, you will definitely need to learn new habits, become more financial savvy. Learn about tax, personal finance etc. Download materials online in PDF or words, also download videos and podcast. Keep you self financially inundated.
8. Make Sure to Have Enough Insurance Coverage.
I am not an insurance expert, so I will not write much on this, but I will advise that you minimize your insurance coverage to keep your insurance expense low early in your journey towards financial independence.
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9. Habits You Need To Have To Gain Financial Freedom
In a summary, here are habits that you need to become financially free and independent.
- Set Life Goals
- Set and live on a budget
- Pay off your credit card debts
- Create Automatic savings
- Be and Investor
- Watch your credit
- Be a negotiator when buying
- Be a constant learner
- Maintain your properties to avoid the cost of buying new ones
- Live below your means.
10. Stay Glued To What You Have
Oh…you may not know; it is quite easier to walk your way to success than retaining it. You don’t fall-off that pinnacle once you get there, do you? Now, to maintain your financial freedom, you must always look back at the things you did right to get where you are and continue them as well as hunt for more creative and classic ways of keeping your status.
Becoming financially independent or gaining financial freedom is a choice. If you sincerely follow our guide here, there is no gainsaying that you will eventually achieve your goal of financial freedom and independence – as perhaps our goal is to see how to see you achieve financial freedom in 5 years time.