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How to Get Rich and Achieve Financial Independence

How to Get Rich and Achieve Financial Independence

If you’re coming here for another get-rich-quick scheme, this is not the article for you. I’m not about to sell you on a pie-in-the-sky fairytale that will have you driving a Maserati into the driveway of your mansion by next May. But if you’re looking for actionable advice on being smart with money while working hard to achieve financial independence, then let’s explore this concept further together.

First, let’s clarify by what I mean by “rich,” as this is a very nebulous term. The definition of “rich” is as individual as taste preferences of food or fashion. Many times, even when you are considered by others to be rich, you don’t think of yourself that way. After all, it’s all about perspective. In poorer countries, people would consider $20,000 per year to be rich, where in more prosperous countries, it is considered poverty. So, to make this topic much easier to follow, I will leave the number of what you would consider to be rich up to you. Whatever it is, here are some important concepts to ensure success.

Keep Breathing Room in your Budget

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breathing room for wallet

    No matter what your paycheck says, if every bit of that money is allocated to paying someone else, you will never feel rich. Only you can decide what percent of your paycheck you want to live on, but I don’t recommend pushing it to 100%. Keep your expenses down to a level where you aren’t strapped every month. You can have the most amazing home, car, and high-paying job, and still be stressed out and unable to pay your bills. Live within your means and save the rest of your income to build up your long-term economic equity.

    Limit Expenses on Bobbles and Bling

    diamond ring

      Whenever you are about to buy something, consider if that is the best investment for your long-term financial goals. Now, I’m not saying don’t enjoy life, but keep in mind when you buy that boat, that brand-new car, the time-share in Tahiti, the new diamond earrings, or that designer leather jacket, that you are making a purchase where you are most likely losing money. The boat, car, time share, earrings, and leather jacket will not normally gain value over the years. The more you limit these expenses, the more money you can keep for smarter investing.

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      Stop Living to Impress Others

      Sometimes, we can make some very foolish decisions to impress others. The sooner we understand that our self worth is not tied up in our possessions, the more likely we are to achieve financial independence. Keeping up with the Jones’ means a very flashy facade of big-ticket purchases followed by years of financial struggle to pay back the debt with interest accrued. There is no shame in driving a used car with some miles on the engine or finding clothes in thrift stores. You will have much less stress than those working extra hours at jobs that they hate to pay their high credit card payments.

      Avoid Debt, Unless It Makes You Money

      While no debt is necessarily embraceable, there are a few scenarios where debt is often necessary. For example, my husband is in medical school. Since most people right out of college don’t have $250,000 lying around to attend medical school, taking out loans is often the only option. Education loans eventually pay you back much bigger dividends in higher earning potential over the rest of your life. The same goes for real estate. Rather than tie up all of your money by paying off one house, you can use the same amount to put down a deposit to purchase five homes or businesses that you can rehab or rent at a profit, while paying off the remaining loan amount with money from the rent or sale. If the profit gained by utilizing the bank’s money is greater than the interest you are paying to use the money, you come out ahead. You can also utilize credit cards to build up your credit line and get points to reduce other expenses like airline travel. Just make sure you can always pay them off at the end of the month so you don’t waste money on interest.

      Get Out of Bad Debt

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        Think of your financial security like a bucket of water. In order to fill it up, you have to make sure you plug all the holes where it is leaking. Avoid the type of debt that has you paying interest on non-necessary items like the plague. When you carry this debt, you are making someone else richer while you stay poorer. If you already have this debt, make it a priority to pay it off as quickly as possible. Pay the highest-interest balances off first and make minimum payments on the rest of the cards. Then, when the worst offender is paid off, take the exact amount you were paying on the card you have paid off and roll it into the minimum payment of the next card. Continue doing this until you are out of bad debt.

        Revisit the Time = Money Concept

        Most people understand the thought process that when they give their time, they get a certain amount of money back. Unfortunately, there is a limit to this, as there is a limit to how much time you can give. The financially free people often learn to create multiple streams of income and get mailbox money. Think about someone who owns real estate. They do not put any time or effort into your rent check, they just collect the mailbox money every month for allowing you to live there. Or, think about when someone creates a new invention or writes a book. Even if they sell the product to others to market, if they are smart they will set up the contract to continue to collect royalties for the life of the invention. This is mailbox money. After the initial work launching or selling the product, they simply sit back and collect the checks. Or, consider those who invest in the stock market. Once they go through the up-front work to become educated on market trends and how to invest wisely, they put their money in a company and simply ride the market up or short-sell the market and make money as the market goes down. When you realize that you can make money beyond the typical hourly rate, your financial horizons expand exponentially. Most people feel intimidated by this initially. After all, this can push people outside of their comfort zone. But, this is where the truly rich play. They are no different that anyone else, they just learned to invest their time in educating themselves in these concepts.

        Follow a Budget and Set Aside Money for Saving and Investing

        Most people are shocked when they document where their money goes each month. There are so many online tools now that link with your bank account and help with budgeting. It makes it very easy to analyze your spending habits. Try to limit your purchases on frivolous items and learn to set aside a certain percent of your income for saving and investing. Take advantage of company-sponsored 401Ks, set up tax-sheltered retirement accounts, and learn about investing in the stock market or real estate. All of this can be done while still working your day job.

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        Budget Your Time Wisely

        Many people in America watch four or more hours of television per day. Now, if you’re watching the latest investment news, I will give you a pass. But, if your filling up that time with Honey Boo Boo episodes, then it’s time to revisit your priorities. I would challenge you to take just one hour per day you normally watch T. V. and read a book on investing. Or, start a business out of your home in the evening and enjoy additional tax breaks offered to business owners while making money on the side. Or, find other people who are financially free and ask them their advice. If you follow people who are successful, you find they are always learning and broadening their minds on new ways to improve their financial status. And, in my experience, they don’t mind giving advice or helping others along the way. Being rich is not a golden ticket only offered to the fortunate. While some wealth is certainly inherited, there are enough rags-to-riches stories out there to inspire us. It’s simply that few people are willing to change their lifestyle and achieve their financial dreams, because, frankly, it takes hard work and reality shows are just so much more intriguing.

        While this is not a get-rich-quick article, if you apply all of these concepts, you will find that you are well on your way to financial success, whatever your definition. With the right amount of passion, education, and hard work, anyone can achieve their financial dreams. Like most adventures, the length of time to get to the finish is different for everyone. But, like all great journeys, with each step taken, you are that much closer to freedom.

        More by this author

        Sarah Hansen

        A corporate-sales professional turned entrepreneur

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        Published on January 17, 2020

        How to Eat Healthy on a Budget (The Definitive Guide)

        How to Eat Healthy on a Budget (The Definitive Guide)

        Have you ever looked at health gurus and wondered how on earth they can afford all that health food? Or maybe you’ve tried multiple times to start eating healthy only to find the $600 monthly budget overwhelming?

        If you’re anything like me, you know exactly what I’m talking about! I absolutely understand the sinking feeling of looking back over a grocery budget and finding you went way over what you intended. And besides that, it can be hard to justify buying a tiny $5 bag of carrot chips while a $1 mound of potato chips is sitting right next door.

        My husband and I recently ran into that struggle. We got married this past year and soon found ourselves trying to balance 12 hour work-days with keeping our relationship strong and trying to keep our personal businesses afloat. Granted, our budget was the one thing that took a hit! After we started tracking our spending, we were shocked to see we were spending over $1000 a month just on food! A little planning cleared that right up.

        So, how to eat healthy on a budget?

        Here’re the top tips I learned that helped us shave over $600 monthly off of our food budget so we could reinvest that in the areas that really mattered to us![1]

        1. Meal Plan

        You’ve probably heard the saying “Fail to Plan, Plan to Fail” right? Well, this saying couldn’t be any more true than in the area of healthy budgeting! The fact is, most healthy foods don’t actually cost that much… the pre-made time saving ones do!

        If you go about creating a healthy meal plan within your budget, you could easily cut costs down to around the same price you are paying for junk food.

        Meal planning is as simple as working in foods you already have in your fridge/freezer, adding in several meals with simple ingredients and seasonal veggies, and breaking it down into a shopping list.

        Often, finding a few meals to make in big batches will save you the most money in the long run, which leads me to my next point.

        2. Cook in Bulk

        Not only will cooking in bulk save you a whole lot of time, it will save you a whole lot of money too! Believe it or not, if you find meals to make with similar ingredients, you can easily save more money than when you were eating unhealthy.

        Don’t believe me? Just look at a $4 frozen pasta dinner. Now, sub that with a veggie pasta dinner. 5 zuchinni ($3), Pasta sauce ($2.50), and chicken ($5) could last you a full 5 meals which adds up to a whopping total of just over $1 per meal!

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        That’s not even digging in to all the money you will save from fast-food. Trust me, a little $10 spent here and there add up! You’ll be saving a whopping amount from all the meal prep you will do!

        3. Cook all Your Meals in One Day

        The science behind this is 2-fold.

        Number one, if you have lots of meals to grab and go, you will be far less likely to binge on pricier food when you get hungry. Let’s be real, you’re not going to spend 1 hour cooking when hub-n’-grub is at your bekon-call!

        Number 2, meal prepping ahead of time will help you stick to your meal plan better when you’re not in the mood. Let’s face it, we’re all going to have days when protein and veggies doesn’t exactly sound appealing. But, if you have a full meal that’s quick to grab in the fridge, it will be easier for you to fill up on the good stuff rather than spending money on what you don’t really need.

        4. Cut Back on Snacks and Specialty Items

        I can almost hear you from across the screen. “But, I thought snacks were good for me!” Here’s the deal: Snacks are expensive! And healthy snacks, oh my goodness, say goodbye to your paycheck!

        Look, I’m definitely not saying that healthy snacks are bad. Quite frankly, I would much rather you chow down on Halo Top than a triple-butterfinger-fudge sundae. It’s just that… healthy snacks are why eating healthy gets a bad rap for being expensive.

        Look at it this way: You could either buy a week’s worth of groceries full of chicken, fish, beans, veggies, and fruits for $30. Or, you can spend that $30 on six snacks that will leave you hungry for more.

        What’s more, the ingredients for gluten-free baked goods, sugar free substitutes, or protein powders alone will add up to you eating a full week’s budget in one sitting. By all means, if you want to work some yummy items into your budget, do it! But don’t confuse that extra monthly $300 of delicacies as a necessity. Your body and budget will thank you!

        5. Satisfy Yourself with Your Favorite Subs

        We all have an emotional tie to food. Maybe pasta reminds you of home! Or maybe a fresh-baked pizza is what gives you a feeling of comfort. Whatever you favorite food, find a way to work it into your budget in the best way.

        We’re only human, and depriving ourselves of what we love will never end well. More often than not actually, it ends in take-out or a pricey-premade substitute.

        Instead of finding yourself in this situation, find a way to make your favorite foods fit your budget. Zuchinni noodle pasta might just give you that feeling of home without breaking the bank. Or maybe you could google a healthy pizza alternative you would like that you could make at home. Often, something similar to your craving will be enough to give you a sense of satisfaction.

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        Or, just buy your cheat meal and save it for a special day. That’s okay too!

        6. Stick to the Cheaper Proteins

        Okay, I know we all love steak. Unfortunately, buying pre-cooked or expensive cuts of meat are one of the easiest ways to drain a budget.

        Instead of purchasing those, try buying frozen chicken or eggs. A 5 lb bag of frozen chicken can be as cheap as $5, and you can buy a whole weeks worth of eggs for just over $1. You could even try going vegetarian for a few meals if you really want to cut down on costs!

        7. Buy Frozen Fruits and Veggies

        I know, we all love our fresh fruits and veggies! However, sometimes frozen might be the way to go if you’re looking to cut costs!

        Fruits and veggies are easiest to ship when frozen, making them a much cheaper option. Contrary to popular belief, scientists have actually found that frozen might be better for you too![2]

        The reason is, frozen produce is picked at its prime and shipped immediately. Fresh fruit tends to be picked much earlier so it will ripen while being shipped. Not only does this make it less nutrient dense, but sometimes the fruits are actually pumped with artificial flavors to make up for the lack of real nutrients.

        While I’m all for fresh fruits and veggies, don’t feel guilty if you opt for frozen foods due to a budget.

        8. Bump up the Calories with Rice and Beans

        The problem some people find when trying to eat healthy is that it can be hard to get the amount of calories you need without relying on expensive “specialty” items. Instead of stocking up on pricey gluten-free breads and pasta, I say stick to simple rice and beans as the bulk of your meals.

        Brown Rice is very cheap and easy to use as a base for bowls and dishes. Likewise, beans can add a bit of fiber making you feel full and satisfied without having to spend a lot of money.

        If you are trying to cut on body fat, use extra veggies as the bulk of your meal and add in rice and beans as a filler.

        9. Try Acai Bowls

        Acai Bowls can be a really cheap and satisfying meal as long as you do it right.

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        You can find cheap fruits at most stores or just freeze your fresh fruits before it goes bad.

        Making your own granola can save you a lot of money as well. The total cost for this delicious meal should only add up to a few dollars compared to triple that price if you were to buy one pre-made.

        10. Make Your Own Meal Kits

        Do you like your meals freshly cooked? Sending meal kits to your doorstep is an easy way to drain your budget. Instead, try making your meal kit at home! Not only is it fun, you will easily get a delicious taste.

        Simply find a few simple meal cards or print some out and fill a ziplock with the ingredients for each specific day. Don’t know what recipe to make? Another option is to order one month of meal kits and recycle the recipe into ingredients for the upcoming months with ingredients you picked up from the store.

        11. Don’t Drink Your Calories

        A few dollars spent here and there can really add up! Just as with specialty items, healthy drinks can be a blackhole for you. An energy drink and kombucha and coffee each day could easily have you spending and extra $300 each month!

        I you really need a special drink fix, try making your favorites at home. Bring a coffee in, make kombucha, or even try making lemonade with stevia or a healthy soda. You’ll be surprised w hat a big difference such a small change can make on your budget!

        12. Buy Cheap Online

        Just like anything else, it pays to be prepared. Buying foods from online retailers can be a really affordable way to save money as long as you’re prepared.

        Plan ahead for those more expensive specialty items you can’t live without. It will save you tons of money compared to having to buy food from a specialty store.

        13. Don’t Fret about the Clean Fifteen

        One of the huge things that can mess with a person’s budget is eating organic. For the record, I am 110% all for eating organic whenever you can. However, for some people, it can be hard to make organic food fit into a budget.

        Instead of scratching healthy eating for a smaller budget, try to buy meat and the dirty dozen organic, and don’t go crazy about the rest. The clean fifteen are the fifteen safest foods to buy that aren’t organic! Meanwhile, the dirty dozen is the most worthwhile avoiding. According to Produce Retailer, these are the dirty dozens:[3]

        1. Strawberries
        2. Spinach
        3. Kale
        4. Nectarines
        5. Apples
        6. Grapes
        7. Peaches
        8. Cherries
        9. Pears
        10. Tomatoes
        11. Celery
        12. Potatoes

        14. Pay Attention to Storage

        Keeping the food you have is just as important as how much food is in the first place. Try to stay on top of how much produce you can actually use before it goes bad. It might not be a bad idea to pencil an extra shopping trip in the middle of the week to keep food fresh.

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        Investing in good food storage containers could go a long way in saving you in the long run as well.

        15. Freeze Food Before it Goes Bad

        Instead of getting mad at yourself at the end of the week for all the wilted produce you need to throw out, try freezing it before you get to that point.

        Most frozen veggies will taste delicious in stir fries and soups. You can freeze fruits to make sorbet or smoothies. Frozen greens can be chopped up and tossed into just about anything for a nutrient boost!

        16. Consider Ditching Most Supplements and Powders

        I have nothing against superfood powders and supplements. However, if your budget is tight, it can be hard to fit supplements and powders in.

        Instead of adding in powders, add extra nutrients to you food. Add lots of greens and veggies to all your meals to meet your nutrient needs. If you need a specific supplement, you can find great deals online as well!

        17. Use Budget App

        There are so many great apps you can download for free. One of my current favorite is HoneyDue because you can track your budget easily with your spouse. There are many options available, just find the one that you’re most likely to use. The ones that download your spendings automatically are often the easiest and will give you a more accurate number.

        My husband and I use the same app, but have a separate budget for each of our weekly food plan and for our additional snacks. Keeping things separate can often be helpful to know exactly where your money is going. Plus, it can help hold you accountable if you have a significant other you are sharing money with.

        18. Use What you Have

        Most people have unused protein powders lying around in their cabinets. Instead of letting that go to waste, work them into your meal plan. Protein powders can make amazing doughnuts, pastries, or pancakes!

        19. Enjoy the Process!

        Finding ways to enjoy your new lifestyle will be helpful in sticking to it long term. Find fun in seeing how much you can save each month. Make a competition with someone to see who can stick to the lowest budget and create something fun to do for the winner with some of the money saved! Blast some music in the kitchen while cooking your new recipes.

        Budgeting and health doesn’t have to be a drag. Make it fun and you’ll enjoy your new lifestyle long-term!

        Featured photo credit: kevin laminto via unsplash.com

        Reference

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