One of the greatest contributing factors to stress in your life is financial issues. People get divorced over financial issues. People get sick (mentally and physically) over financial issues. There are many different reasons why people have financial issues but if you can become financially independent, your life will be in a better state.
I know some of you are saying that you are living from paycheck to paycheck and the cost of living is so high so how can you become financially independent. Becoming financially independent is not something that will happen overnight but it is something that we should aim for.
I caution you though that you should be wary of these quick rich schemes. When something sounds too good to be true, don’t do it.
How to become financially independent?
Sometimes you may find yourself in a tight financial position and you desperately need some money so you end up borrowing money from so many people and when it is time to payback, you cannot pay it back. In fact, some of you may have misrepresented your true financial positon on the application form just so you can get a loan. The best thing to do if you can is to avoid getting a loan. Assess your financial condition and develop a budget that you can comfortably live off.
Too many times, we are living our lives to please people and as a result we live above our means. In order to become financially independent, you will need to make some major sacrifices. This may mean moving into a smaller apartment, putting that child in a public school, forgoing that vacation you desperately wanted.
It doesn’t make sense getting into so much debt unless you are getting debt for investment purposes and your investment will pay off the debt. Even that can be risky at times because sometimes the investment does not yield the returns you expected. Furthermore, you may be faced with unexpected issues in your life such as health, the loss of a job and of course a pandemic like COVID 19.
I know the dream of most people is to have a house and that is fine but don’t get into much debt to get a house. Some of you are better off by just renting an apartment rather than getting a loan to build a house. When you build a house, you are faced with other expenses such as insurance and maintenance.
One of the keys to becoming financially independent is to save something on a monthly basis. No matter how much your income is, put aside something in a savings account and don’t have any access to that account. Have your employer transfer a portion of your salary to that account on a monthly basis.
Another key to becoming financially independent is to stop comparing yourself to others. Some of us are in a financial disaster because we want to be like others. It is ok if you do not have the things your friends and family have. I rather not have those things than to have those things with a lot of debt.
Stop focusing on brand name items. Some of you are spending all of your money on purchasing brand name items when you can get the same results from generic items.
Control your spending habits. Some of the things you have acquired, you really do not need. Some of you have purchase things and you have only used them once. There are some of you who have not used some of the things at all.
If you want to become financially independent, consider investing in an investment property such as an apartment or a condo rather than just a house unless you plan to rent the house. Now if you have a house, don’t think that you have made a mistake. Try to pay off your house as quickly as possible and enjoy your financial freedom. If you don’t have a house, don’t feel bad either. The important thing is to be financially independent whether you have an asset or not.
Consider also starting business, particularly in the tourism sector. Once the business is able to generate significant profits, put aside some of the profits into a savings account or reinvest the profits in another business opportunity.
For some of you in order to become financially independent, you may need a second job. Try to save as much as you can from the second job. However, be very careful with a second job as you must find a balance for time with your family.
It is possible for you to become financially independent. It will take some time but it can be achieved. However, do not become greedy in the process. There are some things in life you will have to give up. Quite frankly, there are some things you have that you really do not need. You may have to sell some of the things you have and start all over but that is ok. Don’t get in too much debt if you don’t have to. I know there are many who will encourage you to get debt particularly if you are in the US for a good credit score but honestly if you can avoid the debt and live financially independent, you will have a good life. You may not have a huge house or a fancy car but if you are financially independent, what else do you need other than a good health.