Financial freedom

Have you ever stopped to plan when you will achieve financial freedom?

It is true that many people want to retire as soon as possible and therefore want to live in peace and without worries and financial difficulties.

But what is needed to achieve this? If you think that this is something very difficult to conquer, then you should know that a lot of the process depends on the magic word called “design”.

Then follow the advice given in this text and know what to do starting today!

What is financial freedom?

Financial freedom is the opportunity to do with your money what you want, when, how and with whom you want. In other words, it allows you to make decisions that will ensure fulfillment in your personal or professional life.

It means acting according to your will without debt. So you control your money, not who controls you.

Being financially free also means that you may not feel compelled to accept a certain job offer just to pay the bills. In other words, you have already achieved a satisfactory stability in your finances that allows you to live according to your decisions.

However, financial freedom does not mean becoming a millionaire or stopping working.
Robert Kiyosaki says the following in Rich Dad Poor Dad:

"Most people don't realize that the most important thing in life is not how much money you make, but how much money you have."

Remember that the ability to manage and save money is critical to achieving long-term financial stability and freedom.

What is the difference between independence and financial freedom?

They are similar concepts but have some differences.

Financial independence is characterized by being able to sustain yourself with your income thanks to the accumulated wealth. So you don't necessarily have to work to earn money.

This can be achieved, for example, through profitable investments or businesses that generate enough profit to maintain the standard of living.

That's why it's different from financial freedom, because it simply means that you have freedom of choice when it comes to your financial life. Therefore, financial independence is a later stage of financial freedom.

Financial Freedom Calculation: How Much Do You Need?

There are calculations to help you estimate how much capital you need to raise to achieve certain goals.
In the case of financial freedom, the account becomes more complicated because this stage is quite special. In other words, it means saying that what works for you may not work for someone else.

Do you want an example? You may decline the job offer if your current source of income is sufficient to maintain your standard of living.

And this standard of living is quite subjective, because each person has their own preferences, which are reflected in their expenses.

This is different than calculating how much it takes to stop working and live on income, which is what happens when we say someone is financially independent.

To be financially free, you probably don't need that much: you just need a source of income that allows you to make decisions each month about where your money goes.

8 tips to achieve financial freedom

Do you want to achieve your financial freedom? Live the step-by-step process to change your habits and start looking for the life you want.

After all, you want to be comfortable with your decisions, right?

1. Estimate costs

It is important to estimate your expenses to manage money well. It requires discipline and self-control, that is. Emotional intelligence in finance.

That is why it is important to know how to distinguish needs from desires: to avoid impulsively doing unnecessary things.

When shopping for something, make a list, compare prices, and see if you really need it.

Also, think carefully before buying an expensive item if circumstances don't allow it. Start by understanding the concept of a personal finance organization and how to set one up.

2. Don't go into debt

Do you feel pressured to pay all your bills every weekend? So is the debt always there? This is a sign that you are not yet financially free. Around the world there are countless cases of indebted families, whose income does not exceed three minimum wages. This is revealed by the majority of surveys carried out by each country on the household economy.

But don't worry, there is a solution. In order not to clutter these statistics, the first step is to delete all accounts and remove unnecessary items.

So if you pay your bills on time, you won't have to deal with late payments, which is a problem for anyone who wants financial freedom.

3. Create a financial plan

The importance of a financial plan cannot be ignored. You may think that only people with high incomes need a financial plan, but that's not true.

And because? It's easy to understand: the organization makes sure your finances are under control. This way you will know that you are working to achieve your goals and objectives.

Some of the main benefits of a financial plan include:

  • Better cost control
  • Short, medium and long term financial goals
  • Greater financial security
  • Reduced level of financial stress
  • less unnecessary debt
  • savings for investment
  • Preparedness for financial crises
  • financial discipline

4. Have an emergency reserve

An emergency reserve is a financial fund that is used to cover unexpected expenses or emergencies.
For example, job loss, unexpected medical expenses, auto accident repairs, and other events that can occur in people's lives.

This is a way to anticipate possible problems in the future and thus avoid taking out loans in crisis situations. Generally, this provision is equal to the covered amount and covers living expenses for at least six months.

5. Try to educate yourself financially

Another important step toward financial freedom is to keep learning. Taking financial education courses is a great way to succeed in a successful life.

Without basic financial knowledge, many people make inappropriate investments.

There are many free online materials you can explore on personal budget management and more sophisticated investing strategies.

6. Save

Saving is an important step to achieve the long-awaited financial freedom. When it comes to finances, experts say that saving is one of the signs of health.

If you're having trouble after paying your bills, here are some ways to save.

  • Compare prices before buying
  • Use discount coupons and offers
  • Shop with cash back programs
  • Reduce expenses with electricity
  • Avoid wasting water
  • Cook at home and take food to work
  • Use public transportation or walk instead of driving
  • Avoid buying expensive brand name products
  • Sell ​​things you no longer use

7. Make investments

Investing in passive income generating assets is also a step towards achieving financial freedom. If you have a more conservative profile, you can start by investing in fixed income.

People with a more moderate or more adventurous profile invest in stocks and know the importance of portfolio diversification.

It is also interesting to learn from great investors who you personally can search for free on many platforms and thus educate yourself little by little without spending money on it.

8. Increase your income

There are several ways to increase your income, whether it's looking for a better job or starting your own business.
You can do this by finding out what skills you have and what you can improve on so that you can grow in your career and earn a better salary.

It is always good to look for updates and training, there is no doubt about that. A digital presence also adds value whether through a website or social media. Also, entrepreneurship is a good idea to find another source of income. So if you want to build a business, try to combine something that you like and that brings you profit.