Financial freedom is just as necessary as any other liberty. Not only does it give you a boost of confidence, but also a sense of security. People are confused regarding retirement; often, they don’t want to take a retirement. They’re just unhappy & wish to use their hobbies. It can be done by switching a job or giving time to their hobbies & passions. To become financially free, here are ten strategies you can follow to retire early & live your dreams:
1. Set Goals
Plan & set clear, determined & practical financial goals for yourself to achieve where you dream to reach. Review your goals from time to time to analyze your progress graph. They will help you to stay on track & motivated to go one step further every time. It is essential to evaluate progress to change strategy in fast-paced changing markets.
2. Passive Income
Learn to generate wealth without putting much effort directly. Some passive income sources with high Return On Investment (ROI) include renting out property, investing in the Stock market, Freelancing, an E-commerce store, Affiliate Marketing, or a Course online. Passive income prohibits relying on only one income source & ensures financial freedom.
3. Downsize Your Lifestyle
Create a monthly budget; review your Utility expenses (needs) and spending on unnecessary wants. Find out any overspending costs & downsize your lifestyle accordingly. This will help save a pile of money that you could’ve spent in routine otherwise.
4. Save & Invest
Start to save 20% of your income in a savings account from an early age. Use the saved money to invest in the share market or any other profitable passive income source. By the time you retire, you have enough money to Switch your job & start a business. Think of a medium that can offer greater profits
5. Methods & Techniques
Different methods & techniques are used to calculate the retirement period & money required. The two most important rules include the 4% rule & FIRE method. The FIRE method calculates time horizon, risk tolerance & financial goals. On the contrary, the 4% rule says, “Calculate your annual expenses, multiply it by 25% & invest that money in 60:40 equity to debt allocation mix & with this, you can live easily for years.”
6. Insurance
People usually save aggressively for their retirement plan & don’t own any emergency fund. It can result in spending all your funds in case of emergency. Buying insurance (life/auto/land) over penny-pinching is better to avoid such instances. It provides peace of mind & security to the “policyholder,” using which you can better focus on your goals.
7. Money Management
Manage your finances wisely. Live within your budget limits. Switch credit cards with debit cards to diminish unnecessary immediate wants. Pay off high-interest debts on time & avoid them. Educate yourself about financial management & learn to pay taxes efficiently or save legally.
8. Financial Advisor
Consult any financial advisor (Investment Banker/Management Consultant) to assess your income, liabilities, goals & assets. They offer their services in exchange for some fees to build you a retirement plan, perform documentation & manage taxation. You should go for a financial advisor if you’re not interested in conducting complex accounting, research analysis & strategy formulation.
9. Think Before Making Purchases
Every time you’re going to make a purchase. Take a pause & review your decision, whether it’s your need or just an emotion-influenced decision. In most cases, people end up buying things that they don’t even need at all. Understand if your purchase is justified & worth the value you’re paying.
10. Planned Retirement
Take small & gradual steps. Don’t rush things at once; instead, make an informed decision. You can start a side hustle, moonlight business, or freelance career. Once you get that sense of security, you can consider planning a retirement & choose to live life up to your dreams.
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How I make $11,000 per year renting out my spare rooms?
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How I make $11,000 per year renting out my spare rooms?
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