Advertising
Advertising

4 Secrets of Financial Freedom

4 Secrets of Financial Freedom

Everyone is looking for financial freedom, and we try to do it by getting involved in something we are passionate about. Many people have found this freedom by starting a business or working their way to the top in a company. In the past 5 years, there have been more millionaires than in any other period looking back. Much of their success can be attributed to the popularity of the internet, and the resources available online. The cool thing is that many people have written about this success offering their insight into what makes a person successful, or what someone must do to stay ahead of their competition. These same people have mentioned the “secrets to financial freedom” and have written lengthy books while making millions of dollars through sales. Today, we’ll be going through something very special…

We’ll be exploring the “so-called” secrets and what you can do right now to start working your way towards financial freedom. However, it’s very important to mention that this freedom does not necessarily mean you’ll be happy because no amount of money can buy happiness. However, you can use the money you earn to help others and build a wall of happiness around you.

Let’s get started and your feedback will be greatly appreciated:

Advertising

1. Money Management

You might have a great foundation with your family supporting you or have a high paying career, but you won’t get closer to financial freedom if you don’t know how to manage your money. I know many people who spend more than they make, and this doesn’t bring them closer to their bottom line. To achieve true financial freedom, you must know how to manage your money and learn how to save, letting your money work for you. Many of the top money managers have stated that if your spending habits are uncontrollable, then you’ll end up worst off then some of the people who don’t make much at all. Therefore, saving money is one of the most important steps to financial freedom.

Start to understand your spending habits, and jump back on track by controlling your expenses, learning about savings and budgeting. Know what’s important right now in your life and what you can do to reinvest into your savings. Identify the areas where money spent truly pays off in a better quality of life for your core interests. For example, some people spend money on their business because they know long-term this will increase profits, grow their customer base and ultimately their business.

2. Your Career Choice

This is going to be one of the most important decisions you’ll make ever, and you should spend time making it by researching growth markets. For you to get closer to financial freedom, you must love what you do, and be earning enough money doing it. However, on the other hand, I know a lot of people who make enormous money but are miserable getting up to go to work in the morning. Follow your passion and everything else will fall into place accordingly.

Advertising

Some of the best advice I can give you about choosing a career is to get involved in one which plays to your best strengths, and where you’ll be an asset to the company. If you start your own business, then base it around those very same set of skills.

3. Always Set Goals

Someone once provided me with a great analogy about why setting goals is important, here what they said –

“When you set goals, you’ll be like a ship with a compass knowing exactly where it’s going. However, without goals, you’ll be lost at sea”.

Advertising

Therefore, you should have a clear-cut plan about what you want to accomplish, and how you’ll get there. You should set small goals which, when combined” will lead you to a higher purpose. Setting smaller goals provide you with motivation each time you check something off your list. So, what makes a great goal plan?

Let’s look at some of the questions you should be asking:

  • What is my main objective?
  • How can I achieve my end goal?
  • What is the time-limit I must meet this goal?
  • Can I network with others for help?
  • What other way can I achieve my end goals? Hiring help, working for others, etc.

4. Network with Others

This can also be commonly grouped with helping others, and building a network of people that you can rely on to get the job done No matter what successful entrepreneurs you ask, they’ll all give you the same advice – you must get help and then help others to succeed. There are people who have been involved in the same business before you so know creative ways to get the job done. They know the right people which will be a great asset when trying to grow your business, and to your bottom-line. However, for you to benefit you must reach out to people in your industry and build close relationships with them. These people can help increase your brand awareness, profits, guide you in the right direction, and finally help you from making common mistakes.

Advertising

How can you find the right people to network with? Luckily, we live in a period where resources are available online so all you should do is a quick search. I would search in Google and find bloggers, companies or even marketing companies who are in your niche. Find and connect with the right person and reach out to them making sure your follow-up afterward. Tell them about your passion and ask them for advice on how you can grow your business leading you to faster financial freedom. Remember, financial freedom is all about making enough money to save, invest and using it to provide you the freedom you are looking for.

Final Thoughts

In the end, everyone is trying to achieve that complete financial freedom so they can live a more enjoyable fulfilling life. However, gaining this freedom does require smart investing and money saving. For example, it’s difficult to gain that freedom when you have uncontrollable spending habits without a clear vision. It’s time you start saving and investing in your business so you achieve that complete financial freedom.

More by this author

Rizvan Ullah

Online Blogger

A General Guide to Disputing Your Public Record In New York 4 Major Changes in Men After Turning 50 Years Old Success Habits of The Worlds Wealthiest People Strategies to Find the Best Attorney When You Need One How to Create an Effective Sales Funnel

Trending in Money

1 How to Invest for Retirement (The Smart and Stress-Free Way) 2 How to Nix Your Credit Card Debt in Less Than 3 Years 3 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2019 4 How to Use Credit Cards While Staying Out of Debt 5 How to Use Debt Snowball to Get out from a Financial Avalanche

Read Next

Advertising
Advertising
Advertising

Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

Advertising

A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

Advertising

Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

Advertising

Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

Advertising

More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

More Articles About Making Wise Investment

Featured photo credit: Matthew Bennett via unsplash.com

Reference

Read Next