Financial Freedom – What precisely It is actually together with What precisely It’s not at all!
Throughout history freedom and independence has almost always come about through struggle. And even though this fight for “financial freedom” isn’t a struggle of flesh and blood, it is, none-the-less, a very real struggle that demands strategies, discipline, and sacrifice.
So just what’s Financial Freedom, and could it be worth fighting for?
To begin with, asking if financial freedom is worth fighting for is much like asking if satisfaction is an ideal state. Of course it is! So just what’s it? Can it be the financial place where you stand free of all financial responsibilities… ? Or the amount of money position where you’ve all you’ll ever need? No it’s not too at all. In reality “responsibility” is the core of the freedom.
So, for the purposes, financial freedom is an economic mindset and monetary position where money worries are at a minimum, and ease of buying what you want and need is easily and responsibly accomplished. Above all it means having income enough to sustain the desired lifestyle. This occurs when the income from all your assets exceeds your expenses.
It also means that for some people, no matter the amount of money they’ve, they will never attain financial freedom because they don’t have the desire or the discipline to obtain it. An individual earning $100,000 each year and spending $110,000 is in a much worse financial situation than the usual person earning $75,000 and spending $70,000. One core principle of financial freedom is to pay no more than you’ve coming in… and preferable less. Complacency, and surrender to the “wants” significantly more than to the “needs” are hallmarks of the financially oppressed.
So how do you win the battle for financial freedom?
In most battles, be it chess, game titles, life, or actual war; victory takes planning and implementation. In chess comment devenir rentier, you could quit a knight to trap a queen… or in war, exercise an ideal retreat to be able to win the war. So it is also in this battle for financial freedom. For most of us to be successful in this endeavor, it will end up essential to sacrifice some of our immediate wants and desires to be able to reach the stated financial goal.
You can find three major components to this battle:
The foremost is strategy… or developing a plan. Debt free (how to become), post debt free plan… You have to responsibly manage everything you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what’s necessary for the absolute essentials… commit that amount of your income to that use, and with what’s left create an idea of attack for eliminating all credit debt.
Begin by gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt. Examine the accounts and list them in accordance with interest rates. Choose one of many top interest rate accounts as usually the one to attack first. Make minimum payments on all the debts except usually the one you’ve chosen, then put all available funds toward eliminating that debt.
When the initial debt is eliminated, choose the following debt to remove and put all available funds until it too is eliminated. Continue this process before you eliminate all of your debts. It might seem slow in the beginning, but you will see the snowball effect that this may create… the past bills will be eliminated pretty quickly
A Very Real Caution
As you begin to remove your debt, don’t fall back in the trap that got you in this fix. That is, don’t think that given that you do not have any debt you can go out and get that “whatever” you’ve been wanting. Now you’ve only succeeded in winning the initial battle for financial independence. The war is now where over… STICK TO THE PLAN!
So, when all your credit debt is fully gone, the amount of money you’re using to cover them is available nowadays for sensible investing… that is area of the next step.
Hopefully, in accomplishing the elimination of your credit debt, and not succumbing to the temptation to pay, you’ve made the psychological changes essential to initiate the following phase… This change in attitude will enable one to truly succeed in the battle for financial freedom. Begin to create wealth by doing two things… first by continuing to tap into your new found discipline, spend less that you’ve coming in and make some low risk, long term investments.