5 long-term steps to reach financial freedom

financial freedom

Reaching financial freedom is probably the goal to have when you get your first job, do the maths and see that there’s no way of achieving all your goals in life; by relying on that job alone. It’s normal to experience disappointment and a sense of frustration.

But there are people out there who have achieved financial freedom for real by being being smart, organised and determined and they are not that different from you. They just figured out a way of earning and saving more money in the same amount of time we all have or waste being content with a small income without ever considering anything else.

And it’s not that hard either, it all comes down to making smart decisions. To give you some guidance and orientation; we have 5 steps you can follow that will help you reach financial freedom.

5 steps to reach financial freedom:

1. Pay all your debts:

You can’t have complete financial freedom if you still have to pay your debts’ installments. With this we don’t mean to say that it was a wrong move to get a loan and go into debt, we all are aware that there are moments of our lives when we simply don’t have that many options.

What’s done is done and you have to get rid of your loans now and understand that in the future loans are a big fat: No! Under no circumstance should you consider loans a solution or a breather when you’re financially tight. Loans can hinder you for a long time and become very problematic, before you take one you should understand that loans are not to be taken slightly or to resort to at every little inconvenience.

Maybe the loan was be to pay for your studies which, is a smart thing to do indeed, because the more education you get, you can have better-paying jobs too.

However, once you reach a stage of your life where you are finally able to pay off those loans, then it should be the first thing to do and to focus on. As soon as you’re able to pay them all off, you’ll be surprised with how much money you will have and be saving quicker than ever.

2. Make long-term investments:

Making a passive income is a way to start earning extra money without having to put in the same effort you would in a job. It’s not a guaranteed solution as no one can fully predict the market fluctuations, so it’s not a short-term solution. If you plan it as a long-term solution you will be able to start slow and see the results in some years.

Having your emotions in check is a big part of this. Usually, when people feel desperate and are impatient for a life change they invest all their savings. Or they make the mistake of getting loans to invest them too, with no real or tangible guarantee of how fast the business or project they invest in will be able to pay off. Even worse; sometimes they do with no guarantee that it will even work.

This are a huge mistake as no one can predict if your investments are going to be highly lucrative in the real world regardless of what your theories say. If you lose money that’s not yours on something that turned out to be as good as thin air, you will go into bigger debt.

That’s why it’s key to make a lot of research to see what would be the best investments for you and set aside some money of your own to invest rather than a loan or all your life savings.

3. Maximise your active income:

Have you been working the same job for years and you’re still being paid the same amount?

If that’s the case, take some time and reflect. If you have proven to be a key worker many times in your company, kindly bring to light to your superiors how valuable your work is and remind them that what you’re being paid does not reflect your work or do you justice anymore.

More often than not, your words will be heard and you’ll be given a raise if you truly deserve one. Sometimes employers don’t have that initiative, not because they feel you don’t deserve it, but because they forget, being busy with their work.

So when you bring it up, be confident that you’re asking for what you deserve and keep in mind that nobody else but yourself will stand up for you. Nobody else will make a similar request for you, so do yourself a favour and don’t shy away from getting what’s rightfully yours.

4. Create a good set of skills and keep learning:

If you’re not happy with your current job, one good way to get a better one is by learning a new set of skills you might be good at and improving your CV. By getting a better job you will be able to have more money at the end of the month to save and invest.

Even if you don’t plan to get a new job, learning new skills can still be proven useful as it could open opportunities for you right where you’re at. It could help you move up in the company where you already work and be given new roles with a better pay.

5. Set a budget for your expenses:

One thing that people who are smart with money do; is that they think twice before spending money on anything. They probably don’t tell you this, because it doesn’t seem like great advice and so obvious but it is great advice and not always easy to figure out.

First of all, don’t spend money you don’t have, much less on things you don’t need. You might be tempted to do so because you see other people doing it, but that doesn’t mean it’s a wise choice for neither of you.

Wait for a time when you are more comfortable with your finances to spend money on secondary or unnecessary things. Also, pay attention to your current expenses and see if you can cancel subscriptions you don’t need anymore or change suppliers that offer better deals.

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