Financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses.
In this article, I have put together 6 crucial things to do if you want to be financially free.
Change the way you think about money – Let it work for you, Not the other way round
The reason why majority of people never accumulate a substantial nest egg is because they don’t understand the nature of money or how it works.
Cash can be likened to a person – living things. When you work, you’re selling a product (that’s yourself or more specifically; your labor).
When you realize that every morning, instead of you, your assets can wake up and have the same potential to work as you do, you have unlocked a powerful key in your life.
If your assets can work hard, they eventually will buy or hire more assets, so you no longer have to sell your own labor.
Understand the importance of making financial decisions now and the future consequences
You are responsible for where you are now.
Making an investment now is a good example of a financial decision. Some investments take time before you start to reap a reasonable ROI.
It is painful that many people are not willing to wait for some years before they become rich; if the Pay Back Period is long, they see an opportunity as a bad investment, so they fail to make reasonable financial decision.
If you cannot invest and wait (let’s say 2 years) but want to enjoy your money now, the odds are you’ll be alive in 3 years. The question is whether or not you’ll be better off when the 3 years is here.
Buying a piece of land now will be a reasonable financial decision than buying in the next 4 years. The reason? This free gift of nature will always appreciate in value.
Understand the power of small amounts
Every Naira that passes through your hands is a seed to financial freedom. The biggest mistake you can make is to think that you have to start with millions of Naira in your account.
An entire army is built one soldier at a time and so is it when it comes to your financial arsenal.
Becoming rich requires financial discipline. A friend of mine knew a woman who worked as a dish washer and made her purses out of used liquid detergent bottles.
This woman saved and invested everything she had, although it was never more than a few Naira at a time. Now her portfolio is so huge because she saved and invested from her little savings.
Lesson? Do not despise the days of small beginnings.
Cultivate healthy saving habit
The money you save will save you.
A survey of America’s affluent (those who make from hundreds of thousands to millions of dollars a year) revealed that 27 to 30 percent of all the income they make went into investment and savings.
That isn’t the result of being rich, that is why they are rich. If you cultivate healthy savings by paying yourself first, you are on your way to financial freedom.
Unless your parents were wealthy, don’t do what they did!
It is insanity to do the same thing over and over again and expect different results.
If your parents were not living the life you want to live, then don’t do what they did! Break away from the mentality of past generations if you want to have a different lifestyle than they had.
To achieve financial freedom and success, you have to do two things. First, make a firm commitment to get out of debt. Second, make savings and investing the highest financial priority in your life. One technique is to pay yourself first.
Study those who have achieved success…. Then emulate them
A very wise investor once said to pick the traits you admire and dislike the most about your heroes, and then do everything in your power to develop the traits you like and reject the ones you don’t.
Mold yourself into who you want to become. You’ll find that by investing in yourself first, money will begin to flow into your life. You have to find your way into that circle, and you do so by building your army one soldier at a time and putting your money to work for you.
If you’re diligent and responsible, financial prosperity is inevitable but you need to go through the process.