7 Smart Ways to Become Financially Independent
It is so simple and at the same time so difficult. The whole point is that the path to financial independence lies through self-discipline and the ability to control emotions and desires with the help of common sense. And this is much easier said than done. In this article, we suggest that you soberly assess your income and expenses, as well as get the most effective methods to achieve financial freedom, and even wealth, which is also likely.
1. Violate One of the Main Economic Laws
The essence of this method is well described by Brian Tracy in one of his books on achieving financial well-being. As you know, our needs are unlimited, which means that as soon as we start earning more, we begin to want more, and spend more money to cover our proportionally increased desires. This is the law of economics, and it works always and everywhere.
In this context, the only way to save is to spend less than you earned. That is, you must artificially stop your needs at the same level. And the one way to achieve financial independence is to invest the money saved, and then we will tell you how, why and where.
2. Set Aside 10% of Each Amount Received
This is the golden rule of all successful businessmen and simply financially independent people - first save, then spend. This should be done immediately, as soon as you receive a certain amount in hand or on a card. Because if you do not do it instantly, there will immediately be some kind of need to spend everything up to a penny.
Why do you need this money? Read in the next paragraph.
3. Find a Source of Passive Income
Fortunately, in our time it is absolutely real. For example:
- if you have even a small amount, you can participate in p2p loans programs or open a deposit
- if you have an apartment or car, you can rent it out (hereinafter we will explain the unobvious benefits of this approach)
- you can passively earn money on affiliate marketing with LeadsMarket
- you can act as an intermediary in the sale of services or goods
- and many other opportunities.
The essence of the approach is to make money out of money, regardless of what you are doing at the moment.
4. Spend Nothing a Few Days a Month
It is really simple. Here are some simple life hacks. If on a working day you go to work on foot, take a lunch box and a thermos with coffee, bypass shops and supermarkets, the likelihood of excess spending will be minimized. If on the day off you go for a walk to the park, and not to the shopping center, the result will be similar.
5. Resist the Influence of Marketers
Marketing specialists have long understood that it is necessary to cause a strong emotion in order to force a person to buy something, in most cases, not too necessary. In fact, we make most decisions being guided by emotions, not common sense.
Do not get fooled by this provocation. Try to turn your cold mind on when you see an attractive offer and ask yourself - hypothetically, can I survive without it at this point in time? In 99% of cases, your answer will be positive.
The same is true for consumer loans. The financial companies, or rather the technologies that they use, have reached such a level that they can already track our Internet search history or activity on social networks, supplement this with real data about our earnings, and develop an extremely personalized offer to take a very profitable loan for that thing which we really want to get.
It looks very profitable, but do not let them provoke yourself! Just one, even the most profitable consumer loan, is the path to the debt hole. Do you still remember the law of unlimited needs? When the desire to possess completely clouded your head, you will no longer be able to stop. As a result, it will be an unsatisfied desire to possess, constant debts and the need to pay interest.
6. Turn Liabilities into Assets or Abandon Them
This is the main point of the book Rich Dad, Poor Dad. If you have not read it, we will brief you in. Very often, we perceive our house and car as our most profitable investments. But in fact, this only increases our costs. Every month we pay interest on the mortgage, every two-three days we refuel the car. Do you feel? Something is wrong here.
In fact, even though the car seems somewhat affordable, it is still an expensive pleasure. This does not bring you extra income but takes away what you have earned. For example, if you are a taxi driver in a private car, then this is your asset. If you use the car just to drive to work or to shop, this is a liability that you maintain out of your pocket. Using a taxi, car sharing and delivery services, as well as not polluting the atmosphere with exhaust emissions, is much more reasonable, whatever one may say.
7. Record Your Expenses and Analyze Them at the End of the Month
Any strategy is good only when its results can be measured. Any of the aforementioned marketers who make us buy under the influence of emotions will tell you about it.
Therefore, it is very important to control your expenses, prepare summary reports for each category of purchases, and analyze the result. Your task is to find weaknesses, in other words, the most expensive categories of your budget, and try to find ways to spend less.
The most convenient way is financial control applications, which, by the way, can be integrated with your bank cards so that you do not have to enter most of the information manually. A reporting system is also built into most of these applications. Try this approach for a month, and you will understand which points of your financial strategy should be reworked.
Save before you spend, control your emotions, reduce liabilities and create several sources of passive income - and at some point, you will feel that the issue of financial independence and stability is no longer relevant for you.