We all want to retire early, take a break from the rat race and enjoy our lives. Moreover, we want to be in control of our finances. This means achieving financial independence.
In essence, that just means having enough income or assets to support your desired lifestyle without working. You can achieve financial independence at any age. However, it generally requires that you start saving and investing early on in your career. The more aggressively you save, the sooner you will achieve your goal.
There are many ways to reach financial independence before retirement age. Here are seven steps to get there as quickly as possible.
Set Financial Goals
The first step on how to be financially independent according to InvestoRunner’s article is setting financial goals (please note that the article is written in Swedish).
Also, thinking about what you want from life in general. It is worth giving some thought to specific financial goals. Do you want to buy a house? Do you want to take an extended trip around the world? Are there any investments or savings plans you would like to set up? Think about both short-term and long-term goals. Afterwards, write them down and plan how you will reach them.
Keep a Budget
Every journey must start with a single step. For those beginning to take control of their finances, the second step is creating a budget.
Creating your budget involves listing all your monthly expenses and income. Moreover, ensure to include all your fixed expenses and variable expenses such as groceries, entertainment, gas and so on. In case of irregular income, for example, if you work on commission, you could average out the past few months of income to project what you will make in the future.
Start a Side Hustle
Another great option is to start a side hustle, whether selling a product, working as a freelancer, or starting a business. Not everyone will have the bandwidth to do this, but it is a great way to put extra cash in your pocket right away.
Find a Mentor
Benefit from someone else’s success by having them advise you and show you the ropes. While this doesn’t have to be someone who is wildly rich – it should be someone who is, at a minimum, on their way to financial independence. All they have to be is willing to share their experiences when it comes to wealth creation and wealth management.
Invest Your Savings
After finding a mentor, you will need to start investing wisely to grow your wealth. You have many options for investing, including stocks, bonds, and real estate. The best option will depend on your risk appetite, personal situation and financial goals. Therefore, take the time to learn about each type of investment before choosing.
Save money
Saving money can seem daunting, and it certainly isn’t easy. However, the key to saving is starting small and increasing your savings each time you get a pay raise. When at a loss for how to start, set up your payroll to automatically transfer a certain percentage of your paycheck into a savings account. This is the easiest way to save money because it is automatic and out of sight.
Invest for the Long Term
The final step towards becoming financially independent is to invest for the long term and build a portfolio of investments that will earn you good returns in the long run. This is one of the most straightforward ways to make money and become financially independent over time.
Final Takeaway
The sooner you start, the better, but there’s no time like the present to begin your journey towards a more fulfilling and financially secure life. Hopefully, we’ve inspired you to consider the possibilities of achieving financial independence. If you work hard and make smart choices, the rewards will follow. There’s no time like the present to start on your path to becoming financially independent.
