Many people dream about achieving financial independence. That’s because the theme means the complete freedom of not having to work to support yourself or your family.
Most people need to work to pay their expenses and guarantee their livelihood. They know that if they quit their jobs, they will not be able to maintain their standard of living. However, financial independence is not just a dream. She is very real to some people.
And financial independence means living on income. And that’s quite different from having to survive through your work. The cost of living is covered by the income that your assets bring you, either through the profitability of financial applications, rents or dividends.
But how to achieve financial independence? How is it possible to realize this dream? In this post we will show you how you can achieve this achievement. Read and share with your friends!
How do I achieve financial independence?
Projections and calculations can always be a motivation for anyone. But for your results to become reality, you need to get your hands dirty. And that means you have to spend less and increase your assets.
At this point, a great ally is financial planning. Creating long, medium and short term goals and setting a schedule for your next actions that can be met will bring organization to your plan to live on income in the future.
There are several objectives to be fulfilled:
· Create an emergency reserve;
· Choose brokers; It is
· Choose investment funds that are compatible with your needs and your profile, among other things.
However, you need to keep in mind that even with all the planning, adjustments to that route must occasionally be made. If you feel the need, seek help from specialized professionals to make the best choices.
Next, we’ll give you some tips that can help with your planning to achieve financial independence. Are they:
1. Mapping the income and expenses of your family budget:
To define which will be the safest path to achieve financial independence, it is necessary to know the beginning of this path. Therefore, it is ideal for you to start mapping the expenses and income of your family budget today.
For this, you can use an app or create a spreadsheet. Having all the information, it will be easy to see that, in general, few people know very well where their money is going.
Therefore, being aware of your budget and taking control of it is the number one step towards becoming financially independent.
2. Organize your financial life:
After mapping your expenses and expenses, you will need to organize your finances. That’s when you’ll cut out superfluous and change patterns.
If, for example, you usually pay your bills by credit card, you need to be aware that this can lead to a financial lack of control. After all, you won’t feel the money leave your account.
At this stage you will also keep an eye on your credit card statement. If keeping it under control is too much of a struggle, it’s best that you start paying off debt.
Bigger decisions also need to be taken. Could it be that the moment of the market is not more advantageous to leave your resources invested than to finance a property? All of this is part of the financial organization.
It is still necessary to do this organization thinking about the flow of annual payments. Expenses such as IPVA and IPTU happen once a year, but it is possible to provision them in other months, so that you can guarantee a discount even on cash settlement.
3. Create and adopt strategies that increase your earnings:
Increasing sources of income is an excellent strategy to invest more and gain your financial independence. There are many ways to do this, but none are simple. Let’s go to some of them:
· Look for another professional occupation. Lawyers, for example, in addition to exercising their profession, can also be consultants or university professors;
· Increase your level of expertise in the profession. By having a differentiated curriculum in hand, you can conquer opportunities with higher remuneration;
· Work as a consultant or as a freelancer in your area of expertise;
· Create an extra passive source of income, such as selling info products; It is
· Be a partner in small projects.
4. Make more savings:
You need to understand how to save in all areas of life. As people move up in life, more expenses and new costs appear. However, the idea here is not to reduce comfort to the extreme. It’s just opting for more economical alternatives.
Keep in mind that the rule should always be to live one step below what your current income level allows. That way, even if you grow even more in your profession and earn more, the economy needs to continue to be done so that you can invest in the future.
Simple measures also help in the long run. Spending less on transportation, renegotiating your health plan, living closer to work, changing your internet and cable TV subscription are just a few examples.
5. Invest in a diversified and better way:
One piece of advice that the vast majority of financial experts give is that you shouldn’t invest in just one place or one way. You need to diversify. And for that, you need to study a lot about financial education, know your investor profile and know the best strategies for diversifying investments.
In addition to protecting your investments against risks, investment diversification gives you a greater return in the long term. That’s because you’ll be exposed to multiple asset classes, getting the best out of each.
One of the places where there is a large amount of recommended assets to increase profits in long-term investments is the Stock Exchange. However, its volatility is higher. Still, stocks tend to outperform. But for that you will need to choose good companies to invest in and use the “buy and hold” mentality.