If you asked five people what financial independence is, you probably would get five different answers. The most common answers are likely to “not work anymore” or “be able to pay all my bills and have some money” or even “not have any debts”. The question will be different for each. But if I asked five people how to achieve financial independence, I would probably look empty. This is not because it is very difficult, but because many people have not been taught how.
Here are some tips to help you find your way to financial independence as you define it.
1 – Focus, Focus, Focus – Know what you want and get a concrete plan for how you want to get there. If you do not have a goal, how will you know when you reach it? Make sure your goals are specific. Just saying, “I want to be rich,” will not change that. Think about how you will get there, and divide it into manageable steps. Write down these steps and you will see when you reach the milestones and can proceed to the next one. Also, on the way, do not forget to celebrate small victories on your trip.
2 – Smart Shopping: There are many things you can do to become a smarter shopper. There really is not one that is more important than others.
3 – Wishes and needs: Know the difference between desire and need. In its basic form, needs are things like a roof over your head, food and water. They are much more, but it will serve as an example. As for needs, here are some of them: cable, mobile phone, internet service or a new car.
4 – Save: This is a tip that is easier said than done. If possible, do not make a large purchase if you cannot pay in cash. This may mean that you have to wait several months to get a specific product, but you should not have the debt that you would have if you just put it on a credit card such as in Fintech SG.
5 – Emergency Fund: make sure you have at least $ 1,000 in an easily accessible emergency fund. This fund is designed for real emergencies, for example, if your car breaks down or your air conditioner goes out in the middle of summer. If you use part of this money in case of an emergency, make sure you replace it as soon as possible.
6 – Invest wisely – If you have the opportunity to start investing, make sure you know what you are investing in. Use a professional and do not depend on your friend to get “stock advice”.