Achieving financial freedom is not an easy task, because it requires a lot of discipline and sacrifice and most important of all being focused on your goal. When I say being and staying focused, I don’t mean for a few weeks or two months, I mean six months and above, because clearing once debt will take a few months and building a handsome emergency fund will also take another few months. The following article by Michael Pound illustrates the steps one has to follow to achieve financial freedom.
Were you ever shown a guide to financial freedom in school? Why is it that schools insist on teaching us about things we don’t use in real life, other than maybe at a dinner party? When last did you have to know about how and why plants photosynthesise or when Columbus first landed in the Americas? I am not saying that these are not useful and interesting pieces of information, but compared to our financial futures pretty insignificant.
I have done a lot of research on the subject over the past few years, and have put together this guide to financial freedom. I live by the principles in this guide on a daily basis and the results have been phenomenal.
The first stage of the guide is to set goals. It is not good enough to just say you want to be financially free, it’s too ambiguous. People fail in life because they don’t know exactly what they want to do, have or be with their life. They might say that they want to make a lot of money, or would like to live in a big fancy house etc, but the truth is they don’t really know what they want. These are just day dreams, they’re not definite goals. Take out a pen and some paper, and start to think about what you really want from life; be specific!
List down every detail, and include all your senses for example it’s no good to say “I would like a new house” What type of house? How many bedrooms and bathrooms? In which area is this house? What colour is the house? Imagine walking through the house? How does it feel to own the house? Only when you involve all your senses does a dream become a burning desire! Why do you need to make a list of goals? Simple: If you don’t know where you are going, how do you know when you have arrived? How can you strive for something if you don’t know for what?
The second process in the guide to financial freedom is to learn how to make money. Learn about the different methods, and different strategies that there are to make money. There are proven methods that you can use to achieve your financial goals.
Start a home based business. The biggest problem with being an employee is that you trade time for money, and we all only have 24 hours in a day. Another big problem with being an employee is that you don’t get paid your full worth, you can’t get paid your full worth because your company has to make a profit from you or they will go out of business. Start a home based business, and earn 100% from your efforts and even better, learn to leverage off other people – a great example of this is Network Marketing.
The next step is to clear your bad debts. This can and should be done in conjunction with the first two processes above. Set aside money each and every month to clear your bad debts. There is a difference between good and bad debt. Good debt makes you money, bad debt costs you money. An example of good debt might be a buy-to-let mortgage on a rental property with a tenant paying off the mortgage. Bad debts are credit cards, car loans, personal loans etc. Formulate a plan to clear these debts as soon as possible. You will never have financial freedom if you continue to fork out on high interest rates every month. As you pay of your debts, don’t just spend the now surplus money on gadgets, save.
This brings me neatly on to the last step in the guide to financial freedom – Save. Set aside money every month for in case of an emergency. I like to call it the emergency fund. This is not drinking money or money to buy new shoes, this is for when the car breaks down and you need it fixed, or if you lose your job and need money to live off. It is also beneficial to set aside money for the purpose of future investments. By doing this you giving your money a chance to work for you instead of you always having to work for money.
In conclusion, the above is simply a guide to help you get started. Each of the above processes will require further research, and hard work before you realise your ultimate dream of becoming financially free ,but if there is only one thing you do, never give up.