By Nafa Danfad
Some people would dream of getting rich quickly, whereas others do not mind taking it one step at a time. But what do they have in common?
They all want to get rich!
In actual fact, wealth is not measured by how much you have in your savings; but rather, it is measured by your ability to upkeep and take full control over your personal income and expenditure. Having a million dollars in your pocket is not a shear guarantee that you will be rich for life. You would need to master the art of maintaining the million dollars in your pocket.
That is the ultimatum that determines your wealth status and how long that status can be preserved.
Everyone wants to live a debt-free and financially secured life, and if possible, we would not want to have to slog and sweat our way just to earn that income for the month.
In other words, we should work towards financial independence.
First and foremost, we ought to comprehend the true meaning of financial independence. Many a times, people would perceive the terminology as the ability to work for money and support oneself, without having to receive financial support from another party, particularly parents and guardians.
But you would be surprised to learn that the true definition of financial independence is the ability to earn income at your own pace and the way you wish to. In other words, you can choose the type of lifestyle you want to live, like enjoying flexible working hours or working from home, and yet still stay financially stable.
So if you have reached the stage where you have the freedom to decide how you want to earn your income and control your personal finances without any constraints, you are said to be financially independent. Believe or not, if you study the techniques to it thoroughly, you can achieve it even before turning 50!
Enticing, isn't it? So why not plan for it from now?
Here are some effective tips to guide you in your plans to achieve financial independence:
1. Simplify your life. Avoid getting yourself tied up with situations that could cause restrains to your finances eventually. You can do so by giving yourself ample time to decide on the biggest issues in your life, like marriage, job and where to live. Take marriage for instance! If you only began realizing that your marriage is a mistake months or years after your solemnization, you would have to resort to filing a divorce, which could cost you a certain sum. Wouldn't it be infuriating to know that that sum of money has been used up for a calamity when it can be used for you to attain a more luxurious life?
2. Reflect on the things that are most precious to you and that you cannot afford to live without. Think about your health, your children's education, your dream job, and most of all, the quality time that should be set aside for your loved ones and for yourself. You should ponder on this during your youth. Cut down on those exorbitant products that will not be helpful for you and your family in the long run, and accumulate as much savings as possible. You will find that later in life, you can provide all the things that would be worth your money and would make you and your loved ones happy, like a TV set, a car and a vacation.
3. Explore hobbies that do not incur too much cost. For example, take up tennis or cycling rather than golf, skiing or playing with electronic doodads. That will save you lots of money!
4. NEVER accept a deal or sign a contract with anything that is offered by a door-to-door salesman or through the phone, and refrain from being bonded with anything that requires you to pay up service charges every month. Do not waste your money on them.
5. You should attain a debt-free life by the age of 50 to 60. Hence, do not sign up for too many credit cards or anything that will get you in debt, and target yourself to settle your debts, other than housing debts, by the age of 40.
6. Make it a habit to save, especially when you have reached a middle age, and educate your children to save as well, because if you can save up as a family, life would be so much more secure for you and for them too.
One thing for sure about financial independence is that it is viable by everyone from all walks of life.
Take slow steps, follow the techniques mentioned above, and you are on your way to being a financially independent individual.