Throughout history freedom and independence has typically 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, a very real struggle that demands strategies, discipline, and sacrifice.
So just what is Financial Freedom, and could it be worth fighting for?
To begin with, asking if financial freedom may be worth fighting for is similar to asking if reassurance is an ideal state. Of course it’s! So just what is it? Is it the financial place where you are clear of all financial responsibilities… ? Or the amount of money position where you have all you’ll ever need? No it’s not too at all. Actually “responsibility” may be the core with this freedom.
So, for our purposes, financial freedom is a financial mindset and monetary position where money worries are at least, and ease of purchasing what you need and need is easily and responsibly accomplished. Most importantly it indicates having income enough to sustain the desired lifestyle. This occurs once the income from your entire assets exceeds your expenses comment devenir minimaliste.
It entails that for a few people, no matter how much cash they’ve, they’ll never attain financial freedom because they don’t have the desire or the discipline to obtain it. An individual earning $100,000 each year and spending $110,000 is in a much worse financial situation than a person earning $75,000 and spending $70,000. One core principle of financial freedom is to spend a maximum of you have 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 many battles, be it chess, video gaming, life, or actual war; victory takes planning and implementation. In chess you could give up 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 the majority of us to be successful in this endeavor, it will become required to sacrifice some of our immediate wants and desires in order to reach the stated financial goal.
There are three major components to the battle:
The foremost is strategy… or having a plan. Debt free (how to become), post debt free plan… You need to responsibly manage everything you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what is needed for the absolute essentials… commit that amount of one’s income to that use, and with what is left create an agenda of attack for eliminating all credit debt.
Start with gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt. Examine the accounts and list them based on interest rates. Choose among the top interest rate accounts as the one to attack first. Make minimum payments on most of the debts except the one you have chosen, then put all available funds toward eliminating that debt.
When the very first debt is eliminated, choose the following debt to remove and put all available funds until it too is eliminated. Continue this method before you eliminate your entire debts. It might seem slow initially, but you will see the snowball effect that this can create… the last bills will undoubtedly be eliminated pretty quickly
A Very Real Caution
As you begin to remove your debt, don’t fall back in the trap that got you in this fix. That is, don’t believe that since there isn’t any debt you are able to head out and get that “whatever” you’ve been wanting. Now you have only succeeded in winning the very first battle for financial independence. The war is currently where over… STICK TO THE PLAN!
So, when your entire credit debt is finished, the amount of money you were using to pay them is available these days 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 spend, you have made the psychological changes required to initiate the following phase… This change in attitude will enable one to truly achieve the battle for financial freedom. Begin to create wealth by doing two things… first by continuing to tap into your new found discipline, spend less that you have arriving and make some low risk, long term investments.