Throughout history freedom and independence has almost always come about through struggle. And even though this fight for “financial freedom” isn’t a struggle of flesh and blood, it’s, none-the-less, an extremely real struggle that demands strategies, discipline, and sacrifice.
So just what’s Financial Freedom, and can it be worth fighting for?
To begin with, asking if financial freedom is worth fighting for is much like asking if satisfaction is an ideal state. Obviously it’s! So just what’s it? Is it the financial place where you are free of all financial responsibilities… ? Or the money position where you’ve all you’ll ever need? No it’s not that at all. In fact “responsibility” may be the core of the freedom.
So, for the purposes, financial freedom is an economic mindset and monetary position where money worries are at a minimum, and ease of purchasing what you want and need is easily and responsibly accomplished. Especially it means having income enough to sustain the desired lifestyle. This occurs when the income from all your assets exceeds your expenses.
It also means that for a few people, irrespective of the amount of money they have, they will never attain financial freedom because they do not have the desire or the discipline to obtain it. An individual earning $100,000 annually and spending $110,000 is in a much worse financial situation than the usual person earning $75,000 and spending $70,000. One core principle of financial freedom is to invest no more than you’ve coming in… and preferable less. Complacency, and surrender to the “wants” more than to the “needs” are hallmarks of the financially oppressed.
So how do you win the battle for financial freedom?
In most battles, be it chess, game titles, life, or actual war; victory takes planning and implementation. In chess you might stop trying a knight to trap a queen… or in war, exercise an ideal retreat in order to win the war. So it is also in this battle for financial freedom. For many of us to be successful in this endeavor, it will end up necessary to sacrifice a number of our immediate wants and desires in order to reach the stated financial goal.
You will find three major components to the battle:
The foremost is strategy… or creating a plan. Debt free (how to become), post debt free plan… You need to responsibly manage that which you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what’s necessary for the absolute essentials… commit that amount of one’s income to that particular use, and with what’s left create an agenda of attack for eliminating all credit debt.
Begin by gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt comment devenir minimaliste. Examine the accounts and list them based on interest rates. Choose one of many top interest rate accounts as the main one to attack first. Make minimum payments on all of the debts except the main one you’ve chosen, then put all available funds toward eliminating that debt.
When the first debt is eliminated, choose the following debt to get rid of and put all available funds until it too is eliminated. Continue this technique before you eliminate your entire debts. It may seem slow in the beginning, but you can see the snowball effect that this can create… the last bills is going to be eliminated pretty quickly
A Very Real Caution
As you begin to get rid of your debt, do not fall back to the trap that got you in this fix. That is, don’t believe that given that you do not have any debt you are able to venture out and get that “whatever” you’ve been wanting. At this point you’ve only succeeded in winning the first battle for financial independence. The war has become where over… STICK TO THE PLAN!
So, when all your credit debt is fully gone, the money you had been using to cover them is available nowadays for sensible investing… which can be area of the next step.
Hopefully, in accomplishing the elimination of one’s credit debt, and not succumbing to the temptation to invest, you’ve made the psychological changes necessary to initiate the following phase… This change in attitude will enable you to truly achieve the battle for financial freedom. Begin to build wealth by doing two things… first by continuing to tap into your brand-new found discipline, spend less that you’ve to arrive and make some low risk, long haul investments.