Financial Independence or financial freedom has different definitions for different people. In a broad sense, we can infer it to be self-sufficient in our terms and do not depend on anyone to fulfill our needs and live a lifestyle we always aimed for.
To achieve financial independence, a good strategy and hard work are required, so that by investing enough you can live your life peacefully. If a person is financially independent he/she has a savings account that will help in future endeavors and it implies that they have invested successfully.
Unless you win a lottery or have a rich family background, you have to work for Financial Independence. It is like consuming eating food every day. We store a monthly ration to eat every day so that we don’t have to run to the grocery store every time we think of eating something. And if food is not available for a long time, do we stop eating? A big no, we start saving food and consume only how much is required. In the same way, we require money, so that we don’t have to depend on someone to meet our needs and live a leisure life.
Most of us are earning, are employed in good companies and have daily duties to do, but everyone is so busy in their lives that they forget thinking about saving, about financial independence and it gets delayed day by day. But it is highly recommended to plan financial decisions so that you don’t have to face difficult times in the days to come. Savings are the most useful in any kind of emergency, to pay off huge debts, to live life peacefully, and achieve a greater sense of financial freedom.
In the times of Covid-19, we have also seen how important it is to save money because we don’t know when problems will come in front of us when we will have to go without work, and for how long. Many suffered largely due to unemployment in the covid times. But the ones who were saved from the large time we’re able to tackle the problem with ease. And thus financial Independence is required.
1) Have a Sensible Lifestyle
When you plan to achieve financial independence, savings are a must. A huge percentage of people don’t know where they spend their monthly income, and they don’t keep a record of it, and when you suddenly start keeping a note of the spendings, you will realize how much money spent was of no use and could have been saved and it can be a good realization for you.
If you start keeping a record of expenses, you will know where to cut, from where you can save, which expenses are unnecessary, and this is the first step towards saving. Also what people do is as their salary increases, they start spending more, but it should not be done this way if you want to save. If you start saving adequately, you will be able to get a rough calculation of your financial independence.
Having a sensible lifestyle does not imply that you have to be cheap, but it means cutting down on unnecessary spendings and keeping a large part of your income in your savings.
2) Look for better opportunities that would increase the income
When you want to retire early, it is advisable to choose an occupation that leads you to earn more. Some of the fields like financial sectors and engineering are the occupations where you can start your career in the early’20s and can save so much. You also get promotions easily and can start saving from an early age, the same is true for financial business also.
The people in the medical fields also earn highly, they can also save nicely if they start their journey nicely. It’s just that they started their earning career in the late ’20s or early’30s. But their income is usually so high that they can cover up the debts easily and start saving. Not just these carriers but if you have a good strategy and are desiccated towards your work and savings you can secure your retirement easily and can have a leisure life.
3) Start investing in Stocks
Investing in stocks is one of the best ways to earn money. It is just you have to be updated about the business news and the rise and fall of markets and have to use a little brain. Stocks usually give 7% returns at the end of the year, this may sound small but within due time, it increases many folds because we know the power of compound interest. It is advised to start saving early so that you can collect enough money up to the time of retirement to live stressfully.
4) Buying Property
Buying properties is one of the best ways to increase wealth. Investing in the stock market would require you to wait for a long time, but in the case of properties, the process is fast. You can take various lands, or apartments or flats and then rent them out if you move to new places. You can also sell these properties after some years when you get a good amount. Some rental properties will be useful even after you retire, as you’ll receive money every month.
5) Focus on Entrepreneur skills
We all know it is not easy to start or set up a new business, but we must not decline the fact that the most successful businesses are startups, and they earn huge amounts of money. It is essential to work hard at the beginning to frame and structure your goals so that everything goes smooth from there.
Focus on jobs that offer pensions, so you don’t have to worry about financial matters after retirement because you’ll receive the pension. Achieving financial independence is not as easy as it sounds, but if you are determined and you live your life with proper planning and implementations, you can achieve your goals.
Saving is very essential to live a stressful life, If you have saved money then you will be able to take new risks and try new adventures in life otherwise you will be set aside and not try anything new. It provides you the freedom and financial security, and also reduces financial burdens, and helps you achieve the life you have aimed for.