Financial independence is what a sane person strives for, exactly strives for, and not just dreams. This means that he takes purposeful steps towards the realization of this goal, and does not engage in excuses. The biggest problem that you may face on the way to your financial independence is banal laziness because you understand that you will have to read a lot of financial literature, take some steps, deny yourself something, look for additional sources of income and do a lot of steps.
But, oddly enough, your laziness can be the impetus for financial independence. Let’s draw a simple analogy: laziness is the mother of progress because if people did not have this feature of the human character, we would not have cars, food processors and everything that can significantly reduce the time to work and perform some actions. The same is the case with financial independence: the sooner you decide on your path to realizing this dream, the sooner you start enjoying constant rest and doing nothing.
Steps towards financial independence
So, financial independence can be achieved if you have several sources of passive income, thanks to which money comes into your life, and you may not work at the same time. It can be investing, business in Nigeria, or forex trading with the help of MetaTrader 4. But before you start looking for these sources, you need to take the following steps:
1. Learn how to properly use the tools that you have at the moment
You have to understand one simple truth: only reasonable savings and cost optimization can provide you with a stable financial position, on the stability level of which all your further steps to acquire financial independence will depend. Make your financial plan: make sure that your monthly expenses do not exceed the sum of your income, ensure yourself safety from all sorts of surprises (financial cushion, medical protection), get rid of all debts and loans. Savings should be reasonable, and you can not deny yourself everything. When you start to implement your financial plan, you will see how easy it is to spend money, and, at the same time, not enter yourself into a minus, but always remain a winner, i.e., your monetary balance will be in a stable and normal state, while assets and savings will increase.
2. Be sure to take care of your “gold” stock
Open a deposit in the bank, which you will replenish monthly and receive your interest. Better when interest is capitalised, i.e., received interest is added to the body of the deposit and then interest is charged on interest. These will be your first real steps towards financial independence. And in the beginning, it is crucial to develop a habit of saving at least 10% of your income. You have to constantly improve your money-making skills and increase your income. You should also invest in yourself, in the skills of effective personal finance management, in exploring new opportunities to increase money. Only this approach will allow you to accelerate your movement towards the desired financial independence.
According to Forextime, the lower your current financial situation and the level of your financial literacy are, the longer your path to financial independence can be. Therefore, it is necessary to start, take steps as early as possible and strive for well-being.
From unstable financial condition to a stable one
This is one of the most important stages because it is an indicator that you are no longer a poor person and are going in the right direction. Also, you should:
- Continue to implement plans for new sources of active income and look for new ways of earning;
- Create your financial reserves, which will help to avoid crisis situations with a lack of funds in any circumstances;
- Create financial savings, with which you will replenish your reserves and acquire what is necessary for a stable life, i.e., create your material assets;
- Plan your personal (family) budget, which will help you to treat your funds wisely, not to make unnecessary expenses, etc.
As a rule, at this stage, the first incomes from your passive income instruments (deposits) begin to gradually appear.
It is crucial to know: that the peculiarity of this stage is its duration, so you must be prepared for the fact that this period will drag on for several years. This is a normal phenomenon, as a result of which, you will move away from your poverty line and create a fairly solid material and monetary base that will not allow you to slide back into the pit of poverty.
You should never think that only a high-paying job can make you financially independent. The only thing that will help you is to reduce your costs to the highest possible level. For you, the main rule should be one axiom: your expenses should not exceed your income.