Imagine being in a place in life where you never worry about money again. Where you have enough money that you don’t really need to check the price tags before buying things. A place where you will not stress up after losing your job because you are financially prepared for anything. Well, i want to be in that place too, we all want to have that financial freedom.
WHAT IS FINANCIAL FREEDOM.
Financial freedom has a different meaning to all of us but to me, it simply means being able to do the things i love without worrying, without stressing, or being financially beholden to others. It means being able to spend, save, invest and even being able to pay an unexpected expenses.
TYPES OF FINANCIAL FREEDOM.
1). High-Net worth. A high net worth individual has sufficient money in savings and investments to maintain his/her lifestyle without working, or working very little. The term ‘high’ is relative since people live different lifestyles.
2). Residue income. A person with residue income, such as music recording artist, or book publisher, will usually have royalties when people purchase their products. These royalties can provide income for years and even decades, allowing the creator to have freedom to pursue other activities while still receiving an income.
ACHIEVING FINANCIAL FREEDOM.
Regardless of how you define financial freedom, or what financial freedom means to you, there are some things that you really need to do to achieve it;
1). Budget, Budget, Budget. Plan how you are a going to spend your money and on what. Most importantly, spend less than you earn.
2). Avoid debts. This is very important to live life peacefully. Compound interest just eats away your potential savings.
3). Establish a savings and investment plan. These two are not the same, but, they are both very important because they both help you achieve a more comfortable financial future. They are great and smart strategies to accumulate money.
It is important to know that financial freedom is not being able to spend money freely, this can lead to financial entrapment, financial worry and sometimes bankruptcy. Having a plan for your spending will more often lead to financial freedom. Make sound financial planing and managedebts.