Three Steps that can help you achieve Financial Freedom
Financial freedom -one of the most sought-after financial goals in life
Personal finance is mystified by financial advisors assessing your financial situation. They would not agree on what financial freedom means, but the phrase "Financial freedom" itself gives a clue about what it is. It is, in plain english, being financially free. It is building a life that is debt free, away from credit cards, and building good financial habits. Financial freedom is a long-term goal, and achieving this goal requires a plan. What follow is an outline of such a plan that will move you toward financial freedom.
There are three main steps to achieving financial freedom.
First, you need to become debt free.
This can be accomplished by creating a budget, sticking to it, and paying off all your debt as quickly as possible. The biggest culprit in recent times is student loan, and you cannot start investing in a true sense unless you get rid of it. Building a lifestyle geared toward financial freedom, one that consists of frugality, treating saving more important than spending, and having a clear retirement plan goes a long way towards this vision. Being debt free, having an emergency fund, and taking care of living expenses partially through your investing income, are all steps towards long-term financial independence.
Second, you should aim to become financially independent.
Financial freedom and financial independence are synonyms. Once you are debt-free, and have no student loan, or no credit card debt, you should focus on building an investment portfolio. This means having enough money saved up to live comfortably without relying on your job. Financial advice can take you only halfway to financial freedom, the key is to have a financial cushion that can protect you from vagaries of interest rates and other macroeconomic uncertainties. After you keep money aside for an emergency fund, the other amount should be allocated to your financial freedom fund.
Finally, you should have an Ikigai: a purpose that adds value in life and brings joy or satisfaction.
Ikigai is that area which combines "What you like to do," "What you do well," and "What pays you." This could include becoming a digital nomad and working from anywhere in the world, starting a business, or even starting a charity organization. Ikigai is the ultimate expression of financial freedom, and the life that one builds on the Ikigai principles is a life full of bliss and fulfillment. It is not only important to retire early and become wealthy with age and establish financial mileposts, but money in the bank should be complemented with the ability to live the life you want.
All of these steps will help you reach the financial freedom and live the life you’ve always dreamed of.