Finance is one of the major factor which decides course of action for any individual. Whatever we work for is to have a sense of stability in our mind regarding money. So we are going to discuss ways to become financially independent.
First we need to know what actually means to be financially independent. It has different meanings regarding to individual needs. Majority individuals consider having a home, a car and some savings to be financially independent. So it takes a plan to visualise what financial independence means to you.
Here are few IDEAS to get you started in process of becoming financially independent :
- Develop self-discipline: Having a disciplined life is must to achieve your goals. No problem, most of us are not disciplined. We sleep late, wake up late, waste our time watching tv shows. It happens with majority of individuals. So it takes a motivation/will power to do things you are not accustomed to. So my advice is to start slow. Take one habit a time and develop it over time.
- Eg. You can just start be sleeping early. Make it a habit. Think of benefits of sleeping early. Later you can add more discipline goals to it like waking up early, reading, investing your time in things you want to do.
- Spend less: Spend only for things you need. I am not saying you to buy cheap clothes,watches etc. I mean to say spend your money wisely. If you want dresses , buy them during SALE (40-50% off). If you need to buy any gadget you need to think whether it improves your life for the money it costs. You must list down pros/cons before buying anything.Spending time searching for product on different sites may help you save money.
- Safety first: One of the key issues that is discussed very less is having insurances. It is very important to have at least medical and accident insurance. It may cost you a little each month/year , but help you save in long run.
- Avoid heavy use of Credit cards: We tend to use credit cards more that we need. A recent study shows people who own credit cards tend to spend more money monthly that others. It is normal human tendency. So better be aware of the purchases you are making with credit cards.
- Build passive income source: Apart from the money you make from salary , it is very important to have passive income sources which generates money for you. We know investing in stocks ,real estate, gold, cryptocurrencies can involve huge risks. So it is better to study them first before investing. Here is a post I wrote about technology involved behind bitcoin. Investing in mutuals funds can help you achieve big goals in future. Just start with investing small amount monthly.
- Have a secondary source of income: Having a mainstream career is important. But everything should have a backup. Just think of secondary source of income. It can be investment in case you understand stocks better that others. You can start blogging, Youtube channel etc. You need to invest a small amount from your free time to develop it to a stage where it starts giving you rewards.