Money can buy you a lifetime of freedom. Many people work their entire lives just to get a few years at the end of life where they don’t have to go to work any longer, but this is not the only path. Financial freedom doesn’t necessarily mean that you stop working, but it does mean that you can only work on passion projects and only when you feel like it. The tips below can help you pursue this lifestyle of financial independence.
What It Means to You
First, think about what financial freedom means to you and what kind of lifestyle you want to pursue. Let your imagination go wild, and see what other people in that position are doing. Maybe you want to be able to start one or more businesses, buy some land and start homesteading, or travel the world. Having a plan lets you know how much money you will need and what steps you must take to reach your goal. If you are planning on spending most of your time in a country with a very low cost of living, you will not need as much as someone who hopes to spend the time in a place with a higher cost of living.
Start Investing
You should start investing now, even if you only have a little money to put toward investments. There are many different ways to approach this. You can open a brokerage account and set up a robo-advisor to help you decide where to invest to start with. The process of learning how to invest in order to meet your goals is an ongoing one. Learning about finance is like learning a new language, and it comes with its own terms and jargon.
You might be interested in investing in real estate. You don’t have to purchase an entire property and can actually invest in shares just as you would with stock. Like any investments, these are made by looking at the numbers. In real estate investing, you would review a pro-forma, or an estimate of costs based on industry data, experience and similar properties. Purchasing real estate shares can be an excellent way to get started in property investing. Later, you might want to diversify into buying one or more full houses or buildings you can rent out for a reliable source of passive income.
Live Frugally
Financial freedom does not mean spending profligately. In fact, it means being frugal, particularly in the years leading up to cutting free. Create a budget and stick to it. Many people spend their earning years putting half or more of their income away in investments. Ideally, you will combine your savings with being a high earner, but if you are smart with your money, you don’t necessarily have to have a big income in order to achieve independence. It may be helpful to pick up some gig work or a part-time job so that you have a sum of money you can sock away each month without having to worry about putting it toward bills.
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