Financial independence is something any earning individual is striving for. Planning and setting financial independence goals need to be realistic and should follow the SMART principle. This is broken down as Specific, Measurable, Attainable, Realistic, Time-bound. To do so, the individual should first have a vision of what he/she needs to achieve, set out to create a plan and be disciplined and determined to pursue the plan and implement its steps until results and ultimately, success is achieved.
Visualization and Planning
These are the first things to do when pursuing financial independence. One thing to consider is your age and current financial situation. The younger you are the better your chances of getting a better plan and financial independence course. This is because you have more time to save and invest. But don’t fret if you’re not so young when you realize this. You can still achieve your financial independence goals just by starting with a plan based on realistic factors.
Budgeting starts with tracking your finances. You got to know how much your income is, how much you spend of it for expenses and decide how you can increase the remaining amount or savings. Spending less than your earning is a good way of achieving savings. This is easy to say, but quite hard to execute. The ideal scenario is setting aside at least 10% of your income in savings or investments. Having a bank account and arranging for an automatic contribution into this account can be a sure way of saving up a part of your regular income.
Saving is just one part of the steps to achieving financial independence. To significantly increase your earnings and the money you have set aside from your income, have to think of ways to earn money through investments. There are many investment options you can choose from, and you need to choose one that is in sync with your current financial status, without compromising your much-needed expenses and needs.
Buy or sell assets that generate income
Real estate is a promising asset that has several options for generating income. If you have your own home and you are considering making an income out of your own home, you can sell your home yourself if you know the dealings of the real estate industry or you can sell the home fast to a trustworthy company. A trustworthy company is one that processes the necessary paperwork for you, saves you from fees and simplifies your selling process. If selling your house is not yet an option for you as of the moment, you can have the rental option to work with. You can still earn with this option.
Buying a home can be a good investment if you are considering selling or having it for rental in the future. Real estate assets are always appreciating and would increase in value as time passes, so it’s still something worth spending money on.
Free yourself from debts
This is also one of the key points when trying to achieve financial independence. Think of your options for paying back your loans and debts. You need not pay your loans in full or all at once. Keep debt repayment as one of your priorities and find ways to consistently shave off your loans’ amortization amounts. Pay your debts from the least first to greatest last. Chances are if you reverse the order, the loans with the least amount will eventually catch up to your loans with greater amounts, and thus further crippling your finances.
Track your progress
Never miss to include this in your financial independence plan. It pays to not assume that you’re already set and to know where you currently stand financially. Changes and unpredictable events in life are things that are going to test the flexibility and stability of your action plan. They can either make or break your financial stability efforts. So always keep a tangible record of your progress in the road to financial stability. There may be times you need to stop, slow down or take a detour while walking the path to financial independence, and a reliable record of your progress will be a trusty thing to keep with you.
Money doesn’t grow on trees so learn to take good care of every penny you earn. You don’t need to feel burdened by debts and constant struggles to make ends meet. It just takes will, determination, perseverance and discipline. Do not worry about how small you start. Great things eventually from small beginnings after all.