5 Fundamental Steps to Achieving Financial Freedom
5 Fundamental Steps to Achieving Financial Freedom

Five Fundamental Steps to Achieving Financial Freedom

Financial freedom is the ability to afford your lifestyle without having to worry about bills or the stress of debt. It allows you to make substantial life decisions without having to worry about the monetary aspect of things.

Achieving financial freedom is probably at the top of most people’s bucket lists. Although this seems like a rather unachievable goal, the reality is that becoming financially free is much simpler than you think.

Here are five fundamental steps that you should consider whilst trying to achieve financial freedom.

Patience

When thinking about accumulating wealth and becoming financially free, an infamous saying springs to mind: ‘Rome wasn’t built in a day’.

Just as Rome was not built in a day, you cannot expect to become financially free overnight. Patience is a fundamental virtue that will help you reach your end goal (eventually). Unless you miraculously win the lottery, it is very unlikely that you become a millionaire overnight.

The Stock Market for Beginners [Quick Guide]
The Stock Market for Beginners [Quick Guide]
A helpful example that highlights the importance of patience is investing. If you invest in the stock market, real estate market, or even cryptocurrency, you cannot expect to make large returns overnight.

Having patience and faith in your financial decisions is ultimately what will ensure that you attain economic success.

If you consider yourself to be a rather impatient person, appreciate how far you have come in regard to achieving your financial goals.

Once you have begun your journey, try to compare your returns and expenses. Have you noticed a change? Even if there is a small difference this is still something to be proud of. Many small differences can create an impactful and large change in your life.

Create a Financial Plan

If patience is the first characteristic you need to achieve financial freedom, the second is structure. Managing your finances can be achieved by creating a financial plan. This can be done in a short-term basis as well as a long-term basis. In order to achieve your financial goals, you must first outline what they are.

Is your main goal to rid yourself of any debt you may have with the bank?

Or, maybe your financial plan consists of saving up enough money to invest in real estate or stock? Whatever these may be, you should create realistic goals that are achievable, specific, measurable and relevant.

Don’t lump in all of your financial goals together. Differentiate between your short-term, mid-term, and long-term financial goals. Your shorter-term goals should span over the course of a year and can consist of things like paying off a specific loan.

Mid-term goals are not immediately achievable and should encompass things you wish to accomplish within the five-year mark. Anything longer than this is considered a long-term goal and your ultimate target should be reaching financial freedom.

Cut Down on Your Costs

A relatively straightforward way to accumulate wealth is by cutting down on your costs. As a society, we have progressed from using cash to paying with card and now we simply use contactless.

Given that paying for something is as easy as whipping out your smartphone, we tend to make many more unnecessary purchases. All of these small purchases seem insignificant, however, at the end of the month they add up to a hefty sum.

You can also consider cutting down on expenses like streaming services. Rather than having multiple music or video streaming platforms, choose your favorite. This effortless change can result in you saving hundreds of dollars each year.

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Streamers Advice – Budgeted Game Streaming Setup

Try not to live beyond your means, especially if you are working within a budgeted financial plan. This will allow you to save money, which can then be reinvested into your financial goals.

There are a lot of ways to save money – big and small. Rather than eating out every other day, why not try to make most of your meals at home or bring a packed lunch into work.

Another way to save money is by minimizing your house costs. Look for deals with energy providers or you could even consider changing your phone contract.

Coronavirus Saving Habits
Coronavirus Saving Habits

The coronavirus crisis has provided a worthwhile opportunity to change your financial habits and save money whilst keeping safe.

Invest, Invest, Invest

One of the easiest ways to achieve financial freedom is to ensure that you have multiple streams of income, both passive and active. Active income refers to the money that you earn working a typical job or running a business. However, passive income includes assets and investments that accumulate money whilst you sit back and relax.

Gold vs Bitcoin - Which Is A Better Investment
Gold vs Bitcoin – Which Is A Better Investment

There are many different ways you can invest your money. This includes real estate, bonds, investment funds, stocks, ICOs, cash equivalents and more.

There are many strategies and options to choose from.

However, if you are struggling to decide where to put your money, here are some of the best investments in Canada. Not only will investing allow you to earn additional income but it will also allow you to stay ahead of inflation.

However, as previously noted, investing will only provide you with sizeable returns in the long term. You need to be patient and have a financial plan in place to create wealth and become financially free.

Knowledge is Power

Finally, the last step to achieving financial freedom is having extensive knowledge of what is going on in the world. Investments do not exist in a vacuum, instead, their value fluctuates with the demands of the market.

Making sure that you are up to date on issues regarding business or finance can help you achieve financial freedom.

In order to make informed decisions on your investments, you should get into the habit of reading about the market and current affairs on a weekly basis.

Top 15 Best Business Websites You Should Read This Recession
Top 15 Best Business Websites You Should Read This Recession

There are many resources available online for you to continue learning about strategies, investments and trends in the financial sector. Just to mention a few: Monetize.info, Investing.com, Investopedia.com

New ways to make money are always waiting to be discovered. Take these fundamental steps into consideration and stay determined, as your journey towards financial freedom awaits.

If you’ve got a money saving tip, some advice, or ideas you think our audience would be interested in, then we’d like to hear from you. Now you can write about Personal Finances.

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Daily Money Saving is a community built around the notion that saving money is good. We offer free articles and information on all aspects of personal finance including debt reduction, how to save money, how to make money and how to invest.

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