The ultimate fast track secret of financial freedom
Once presented with the concept of money and its unlimited potential; one of the greatest quests of this generation becomes “How to make money and how to make it fast!” A combination of financial literacy, luck, time, and money management could be the cocktail to success.
So vast is the arena of money-making today that a Business Insider article in 2017 reported the highest income generated by a ‘You tuber’ at $16.5 million. Niche market segments are flourishing and highly lucrative; each year, millionaires seem to get younger. But it’s not for the idealistic student stepping into his first year at college as CNN reported that an average fresh graduate owes $28,400 in debt.
Not only is competition fiercer than it has ever been, but it’s also hard to make ends meet post debt and save up money. All the energy, focus, and money go towards loan repayments.
Not everyone is an entrepreneur. So, the question is, how does a person make it in the current market? There is more money to go around than ever, but how does ‘an average of 9 to 5 Joe’ achieve that level of financial freedom.
Let’s look at what could influence your money-making habits and potentially unlock the gateway to financial freedom and success.
Invest in yourself
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The answer to “where to begin” is with yourself. Remember the age-old adage “charity begins at home,” here it is with a twist.
In a study by Jing Jian Xiao, focused that education that emphasizes money management techniques and skills could significantly enhance one’s financial independence.
The more you understand about money, how to manage it, where to invest it, and how to better plan where it goes each month, the stronger the foundation for you to stand atop of it.
Say you need a little push to get you going. There are services like small business loan calculators that are built to help you get the best deals on loans, thus acquiring extra funds for you and your businesses.Expand your understanding and knowledge of how money works and how the market influences it. A good start can be started by listening to podcasts on your commute.
Fewer people seem to have the time to sit down and crack open a good old’ paperback but the average person 500 to 1,000 hours in a vehicle, so the best way to make use of this valuable time would be to learn behind the wheel.
This one is a no brainer; financial freedom means having more finances to work with and less to worry. But that life isn’t for everyone, so cultivating the mental strength is also necessary.
Building your income starts and ends with the preservation of your assets and capital. For most of the world’s full time, highly demanding, average income households – the escape from a lifelong labyrinth of hand to mouth always will come down to savings.
Say you Uber to work every time, maybe try to walk or cycle. Go from ordering take out every day to learn how to cook. All of a sudden, these small incremental changes have given you more room to work on your income and seek possibilities.
It sounds like a harsh way to live, limiting yourself to survive below your means. But think of it this way, if you allow yourself to spend less on yourself than you earn you open up a myriad of opportunities. These possibilities include jobs and business opportunities that offer short term sacrifice for long term gain.
Diversifying your Portfolio
The road to financial independence is a long and hard grind, which takes up a lot of time. But gradually, as you put away small amounts and cutaway from significant expenses – you will have a price you can work within.
It is where you can start reaping the benefits of compounding. Put compounding means that your money once invested can grow to earn its own money and on and on in a cycle.
The gist is that only way you can more money left over at the end of the month is to either increase your paycheck or decrease your costs. Investing in business and lucrative opportunities are high risk but also high reward. If by luck you manage to cut your losses and invest in profitable ventures – you’d be virtually increasing your paycheck as well.
Let’s illustrate an example first. A doctor earning $200,000 per year is going to get taxed heavily and will probably end up paying $90,000 in taxes for a net income of $110,000. But, if he earned this same amount through other means – for e.g., within a pension plan, or individual retirement account. He wouldn’t pay anything in taxes.
Which means an extra $90,000 per year occurs because the money earned has been within a tax-advantaged account instead of regular elbow grease.
It is why you should do everything you can, within reason, to fully fund your retirement plans, as well as to focus on how your seemingly small decisions help or hurt tax planning. No choice is too small.
Knowing how much you spend and where you are paying is essential to curb-stomping your bad habits and to lose track of your income.
There is a lot of simple ways of keeping track of your monthly expenditure. One of the most popular software is Microsoft Excel. The spreadsheet format makes it the perfect budgeting tool.
Internet’s busiest forum reddit.com hosts many niche sub-forums, one such is mainly for people learning how to manage personal finance. There are posts where one can learn how to operate from scratch or even download templates and input their own needs.
If your partner isn’t as disciplined, financially literate, frugal, and goal-oriented as you are towards a better future; you are going to have trouble achieving financial independence equivalent to struggling in quicksand.
If you want to travel fast, go alone. But if you’re going to travel further, go together. Having a person around who does not overwhelm your progress or derail you from your track is essential. While building a life to project you into financial freedom, you must be not emotionally, financially, or socially pulling each other away from your goals as a unit.
Building a life, you need to have a kind of support that allows you to take risks, you need to have that comfort that no matter what the outcome, there will always be someone in your corner backing you up and ready to take care of you unconditionally.
Success does not base on the moves you make, but a lot of it also comes from a place of patience, proper temperament, and mental security. Being able to focus on your work and creating a better life for you and those around is much easier when you aren’t worried about the situation back home.
To conclude, while there many variables that can impact your financial circumstances and many ways, you can directly influence them. The journey will always begin with you taking the initiative and pulling strings. The more you sacrifice in the short term, you will have to gain in the long run. In this a state of mind that accepts cutting comfort, to afford lifelong support in the years to come. With that said, even though a lot is left up to pure luck but you have to put yourself in a position where preparations meet opportunity. It’s a classic race between the turtle and the hare; patience and biding your time is key to achieving not only financial independence for yourself, but it could lead to a strong foundation for generations to come and benefit within.