One goal that we all have in common is that we all want to make more money in order to achieve financial freedom.
However, only a small percentage of us actually achieve the financial freedom we long for.
We all want to have enough money so that we never have to worry about money again. The only question is, “Are you ready to do it or not?”
The good news is that more people are achieving financial freedom faster today than ever before.
Through proper financial planning and making it a goal to improve your personal finances, you can become one of them too.
The Formula For Financial Freedom
Financial freedom means you have the ability to live your life without worrying about being tied down by monetary limitations, relying on an emergency fund, or worrying about money in general.
A certified financial planner can play a crucial role in achieving financial freedom by providing expert guidance and helping you navigate essential steps to reach your financial goals.
If you’re ready to reach financial freedom and achieve financial independence, here is a seven-point formula that you can use to help accumulate wealth, become happier, and achieve financial freedom in the years ahead.
Begin To Think Positively About Money
Part of becoming rich and achieving financial freedom involves thinking positively about money.
Thinking negatively about money is an emotional obstacle that you must eliminate in order to achieve financial freedom.
You must eliminate the thoughts that having more money leads to evil or that money can’t buy you happiness.
When you begin thinking positively about money, you will attract opportunities and open up more doors than you ever thought possible.
Rewrite Your Major Goals For Financial Freedom
Set financial goals for yourself.
Rewrite and review your goals on paper every day and think of how you could accomplish them. This will take you between five and ten minutes.
The very act of writing and rewriting your goals, and thinking about them each morning before you start off, will increase your chances of accomplishing them.
Plan Every Day In Advance
Plan every day in advance. The best time to do this is the night before.
The very act of planning each day, each week, and each month in advance will make you far sharper and more precise at everything you do.
You will find yourself with better focus and a greater sense of self-control and personal power when you work from a list.
When you plan every day in advance you will be better able to control and track your spending habits as well.
Plan how much you have to spend for the week, month, or year, and decide where you will be able to save.
From there, put as much as you’ve allocated into a savings account, some into an emergency fund, some aside for normal bills and paying off any student loan debt you may have, and maybe even consider budgeting for investing money in the stock market.
Additionally, managing high-interest consumer loans is crucial as they can significantly impact your financial health and hinder your long-term wealth-building strategies.
The Principle Of Concentration
Concentrate single-mindedly, every hour of every day, on the most valuable use of your time.
The principle of concentration is absolutely essential to achieving financial freedom.
Virtually everything you do in terms of goal setting and financial planning is aimed at enabling you to determine the one or two things that you should concentrate on more than anything else.
Your ability to develop the habit of concentration will do more to ensure your personal finance success than perhaps any other skill or habit you can acquire.
The things you focus the most on and spend the most time doing should be in direct alignment with your financial goals.
Spend your time focused on what will make you the most money.
Invest In Yourself To Generate Passive Income
Listen to audio programs in your car. The average person spends 500 to 1,000 hours per year behind the wheel.
By turning your car into a university on wheels, you can become one of the most knowledgeable and skilled people in your profession.
Purchase courses on money management, read books on personal finance and find articles online about money. You may even invest in yourself by investing in the advice of a financial adviser.
Very soon you will have so much knowledge in the area of money that people will come to you for advice.
Ask Yourself These Magic Questions
Ask yourself the two “Magic Questions” after every meeting and every event of importance in your life.
The first question is, “What did I do right?” And the second question is, “What would I do differently, next time?”
By reviewing your performance immediately after every meeting, sales call, and presentation, you will become better and better, faster than you can imagine.
The answers to both of these questions are positive.
By reviewing what you did right and what you would do differently next time, you program into your mind a predisposition to be even better the next time out.
If you take a few minutes and write down everything you did right and everything you would do differently immediately after a call or presentation, you can double and triple the speed at which you learn, grow, and improve your work.
Improving yourself and your quality of work will, in effect, improve the money you make.
Be Generous To Others
The final point is to treat everyone you meet like a million-dollar customer.
Treat every single person, at home and at work, as if they were the most important person in the world.
Since everybody believes that he or she is the most important person in the world, when you treat them as if they were, they appreciate your recognition and acknowledgment more than you can imagine.
It is a proven fact that being a more generous person will help you attract more wealth and become a happier person.
We’ve often heard it said, “Money doesn’t buy happiness”.
But, the truth is that:
- Money is essential to happiness.Material prosperity predicts life satisfaction,And the more economic status we achieve, the more we’ll feel satisfied with our lives.
Not only do our measurements of happiness rise as our income rises, but so do our sense of well-being and life satisfaction.
So, by choosing to focus on money goals that motivate you, while also embedding a positive mindset towards money, towards yourself, and life in general, you will help to achieve both increased wealth and happiness.
And when you get there – evidence clearly shows us that being generous with our money makes us happier – and richer!
How To Save Money And Achieve Financial Freedom
Did you know that the decisive factor in the achievement of financial freedom is the development of specific habits?
Well, it is.
In fact, most self-made millionaires have already learned these habits and as the result of practice and repetition, have reached financial freedom.
It’s also important to consider your financial health, as poor physical health can lead to increased medical costs, impacting your financial stability and overall financial well-being.
This is great news!
Why?
Because you can learn to save money and think like self-made millionaires to become financially independent yourself.
Create a Budget
Creating a budget is a crucial step in achieving financial freedom. A well-structured budget helps you track your income and expenses, identify areas where you can cut back, and make conscious financial decisions. To start, gather all your financial documents, including pay stubs, bills, and bank statements. This will give you a clear picture of your financial situation.
Next, categorize your expenses into three main groups: needs, wants, and savings. Needs include essential expenses like rent, utilities, and groceries. Wants cover discretionary expenses such as dining out, entertainment, and hobbies. Savings encompass any money you set aside for long-term goals, such as retirement or a down payment on a house.
Once you have categorized your expenses, it’s time to establish financial mileposts to track your progress. For instance, you might aim to save a specific amount each month or pay off a certain amount of debt. These mileposts will serve as benchmarks, helping you stay focused and motivated.
Review and adjust your budget regularly to ensure you’re on track to meet your financial goals. Life is dynamic, and your budget should be flexible enough to accommodate changes in your financial situation. By diligently following your budget, you’ll be well on your way to achieving financial freedom.
Pay off High-Interest Debt
High-interest debt, such as credit card debt, can be a significant obstacle to achieving financial freedom. The first step in tackling this issue is to make a comprehensive list of all your debts, including the balance and interest rate for each. This will help you prioritize which debts to pay off first.
Focus on the debts with the highest interest rates, as these are costing you the most money. Consider consolidating your debt into a lower-interest loan or a balance transfer credit card to reduce the amount of interest you pay. This can make it easier to manage your payments and pay off your debt faster.
Make more than the minimum payment on your debts each month. One effective strategy is the snowball method, where you pay off smaller debts first to build momentum. As you eliminate each debt, you’ll feel a sense of accomplishment that will motivate you to tackle the next one.
While you’re paying off your existing debts, avoid taking on new debt. This might mean cutting back on discretionary expenses or finding ways to increase your income. By freeing up more money in your budget to put towards your debt, you’ll accelerate your journey to achieving financial freedom.
Build an Emergency Fund
An emergency fund is a crucial component of achieving financial freedom. It provides a financial cushion in case of unexpected expenses, such as car repairs or medical bills, and can help you avoid going into debt. To build it, start by setting a goal to save three to six months’ worth of living expenses.
Consider setting up an automatic transfer from your checking account to your savings account to make saving easier and less prone to being neglected. This way, you’ll consistently contribute to your emergency fund without having to think about it.
Keep it in an easily accessible savings account, such as a high-yield savings account or a money market fund. Avoid investing it in the stock market or other volatile investments, as you may need to access the money quickly in case of an emergency.
Review and adjust it regularly to ensure it’s adequate to cover any unexpected expenses that may arise. By maintaining a robust emergency fund, you’ll be better prepared for financial surprises and more confident in your journey to achieving financial freedom.
Live Below Your Means
Living below your means is a cornerstone habit for achieving financial freedom. It involves prioritizing your needs over your wants and avoiding unnecessary debt. By adopting a frugal lifestyle, you can significantly reduce your expenses, save more, and invest in your future. Here are some practical tips to help you live below your means:
- Create a Budget: Start by creating a detailed budget and tracking your expenses. This will help you understand where your money is going and identify areas where you can cut back.Prioritize Needs Over Wants: Focus on essential expenses like housing, utilities, and groceries. Cut back on discretionary spending such as dining out, entertainment, and hobbies.Avoid Impulse Purchases: Take time to think before making any purchase. This helps in avoiding unnecessary spending and ensures that your money is spent wisely.Cook at Home: Preparing meals at home can save you a significant amount of money compared to eating out. Plus, it’s often healthier.Cancel Unused Subscriptions: Review your subscription services and cancel any that you don’t use regularly, such as gym memberships or streaming services.Shop Smart: Take advantage of sales, use coupons, and buy in bulk to save on groceries and household items.
By living below your means, you can accelerate your journey to achieving financial freedom and reduce financial stress. Remember, financial freedom is not just about having a lot of money, but also about living a life that aligns with your values and goals.
Some Tips To Save Money And Build An Emergency Fund
In this case, which is quite common, I recommend a gradual process of learning to save money where you begin by saving 1% of your income and living on the other 99%.
For example, if you are earning $2000 per month, make a decision today to save $20 per month or $.67 cents per day.
You can then live on the other $1,980. Save money in the long run by opening up a separate bank account, your “financial freedom” account.
Money that goes into this account only flows only one way- inward.
Once you put money into this savings/investment account, you never, ever take it out or spend it for any reason.
It has only one purpose:
To enable you to achieve financial freedom as soon as possible.
Once you have become comfortable living on 99% of your income, increase your monthly savings rate to 2% off the top.
Within one year, you will find yourself living quite comfortably on 10% of your current income.
Continue this process until you are saving 15% and then 20% of your income, off the top.
You will not even notice the difference in your standard of living because it will be so gradual.
But the difference in your financial life will be absolutely extraordinary.
Regularly reviewing and adjusting your investment portfolio is also crucial to ensure your financial strategies align with life changes and market developments.
There is an especially special habit that financially successful people learn or develop over time.
It is the habit of responding to incoming money in a particular way.
When we are growing up, we are encouraged to save money from our allowances.
However, as children, we look upon money as a tool with which to buy candy, toys, and other things that make us happy.
As a result, we naturally begin to look upon saving as a punishment, something that hurts us and deprives us of the candy, toys, and enjoyable things we desire.
At an early age, most people begin to associate savings with pain, sacrifice, with loss of pleasure, satisfaction, and happiness.
As adults, this negative habit is manifested in our desire to spend money as soon as we make it.
Many people in their late teens and twenties look upon every paycheck as an opportunity to go out and spend as much money as they can.
This is why it is generally known in the restaurant business that they will be the fullest at the middle and at the end of the month, on paydays.
People very early begin to associate spending with happiness and saving with pain.
Since the basic human motivation is to move away from pain toward pleasure, from discomfort toward comfort, and from dissatisfaction toward satisfaction, most people develop the habit of associating spending with enjoyment and saving with unhappiness.
Using The Law Of Attraction For Financial Freedom
When you begin to save money, and you feel positive and happy about your growing account, these positive emotions imbue that money with a form of energy that begins to attract more money into your life, and into that account.
Creating passive income through investments and business ownership is crucial for achieving financial freedom, as it provides the financial stability needed to live without relying on traditional employment.
Old friends will pay you back debts that you had forgotten a long time ago.
You will have opportunities to earn additional amounts of money that had not occurred to you.
You will sell things that you had had for a long time that you thought had no value.
And as you add these amounts to your account, your account will develop even more positive energy, and attract even larger amounts of money.
This is an extraordinary discovery…
I had heard about this concept for many years, but I was always broke and there was never anything I could do about it.
Then, about two years after I got married and started my own business, I ran out of money.
I had been able to buy a house with my lifetime of savings, but now I had to sell the house to get the cash, and then move to a rented house.
At this point, my wife Barbara demanded that I turn over to her $10,000 from the proceeds from the sale of the house.
After some arguing, I gave in. She took the money and deposited it in another bank account which I could not access.
No matter how many financial problems we had in the months ahead, she refused to even consider the possibility of spending that money.
This was her security blanket. The most remarkable thing happened.
From that day forward, we were never broke again. Even though it was the middle of a recession and businesses were going bankrupt all around us, we were never again out of money.
Every week, every month, business came in, the bills were paid, and opportunities opened up and exciting possibilities seemed to be attracted into our lives.
Within a couple of years, we were able to move out of the rented house and buy a beautiful new home in a lovely neighborhood.
Two years later, we were able to buy a home that cost five times as much on a beautiful golf course, overlooking two lakes with the ocean in the distance.
Rewire Your Thinking And Gain Financial Independence
Your job is to reverse the wiring on this habit.
It is to detach the wires from one set of attitudes and reattach them with a different set of attitudes.
Your job is to begin thinking in terms of pleasure whenever you think of saving and accumulation, and pain whenever you think of spending and getting rid of your money.
Investing for the Future
Investing for the future is a critical step in achieving financial freedom. By investing your money wisely, you can grow your wealth over time and reach your long-term financial goals. Here are some tips to help you get started:
- Start Early: The sooner you start investing, the more time your money has to grow. Compound interest can significantly increase your wealth over time.Diversify Your Portfolio: Spread your investments across different asset classes, such as stocks, bonds, and real estate, to reduce risk and increase potential returns.Utilize Tax-Advantaged Accounts: Take advantage of tax-advantaged retirement accounts, such as a 401(k) or IRA, to save for retirement and reduce your tax liability.Consider a Financial Advisor: Working with a financial advisor can help you create a personalized investment plan and provide guidance on investment decisions.
Some popular investment options include:
- Stocks: Stocks offer the potential for long-term growth but come with higher risk.Bonds: Bonds provide a fixed income stream and are generally less risky than stocks.Real Estate: Real estate investing can provide rental income and potential long-term appreciation in value.Index Funds: Index funds offer a diversified portfolio of stocks or bonds and often have lower fees than actively managed funds.
Investing for the future requires patience, discipline, and a long-term perspective. By starting early and investing wisely, you can achieve financial freedom and secure your financial future.
Start Investing Now
Starting to invest now is crucial for achieving financial freedom. The sooner you start, the more time your money has to grow. Here are some compelling reasons to start investing today:
- Compound Interest: Compound interest can help your investments grow exponentially over time. The earlier you start, the more you benefit from compounding.Time is Money: The longer your money is invested, the more it can grow. Delaying investing means missing out on potential growth.Achieve Financial Freedom: Investing now can help you achieve financial freedom and reduce financial stress in the future.
To get started, consider the following steps:
- Open a Brokerage Account: Choose a reputable online broker and open a brokerage account to start investing.Fund Your Account: Transfer money from your bank account or other sources to fund your brokerage account.Choose Your Investments: Select your investments, such as stocks, bonds, or index funds, and start investing.
Remember, starting to invest now is essential for achieving financial freedom. Don’t wait – take the first step and start investing today!
Monitor Your Credit Score
Monitoring your credit score is essential for achieving financial freedom. Your credit score can affect your ability to get loans, credit cards, and other forms of credit. Here are some reasons why you should keep an eye on your credit score:
- Interest Rates: A good credit score can help you qualify for lower interest rates on loans and credit cards, saving you money in the long run.Creditworthiness: A good credit score indicates to lenders that you are a responsible borrower, making it easier to qualify for credit and loans.Financial Health: A good credit score is a sign of good financial health and responsibility, which can open up more financial opportunities.
To monitor your credit score, consider the following steps:
- Check Your Credit Report: Obtain your credit report from the three major credit bureaus (Experian, TransUnion, and Equifax) to ensure it is accurate.Use a Credit Monitoring Service: Services like Credit Karma or Credit Sesame can help you track your credit score and report any changes.Make On-Time Payments: Consistently making on-time payments on your debts is one of the best ways to improve your credit score.
By keeping track of your credit score, you can improve your financial health and achieve your long-term financial goals.
The Major Obstacles To Financial Freedom & How To Overcome Them
Many major mental obstacles deter financial success.
The most common reason is that some people believe, for whatever reason, that they don’t deserve to be rich.
Poor health can also have negative financial implications, such as increased medical expenses, higher insurance premiums, and potential job loss or early retirement, all of which can severely impact financial stability and overall well-being.
Now, I know some of you may be asking, why is that?
Some people, including myself, have been raised with a steady drumbeat of destructive criticism.
This has led them to conclude, at an unconscious level, that they don’t deserve to be successful and happy.
Of course, this is untrue.
Yet, this negative way of thinking can lead to destructive financial habits.
These habits can be hard to break.
Change Your Attitude Toward Money
Negative experiences in childhood, which are all too common, can have terrible effects.
For example, when people actually do succeed as a result of hard work, they feel guilty.
These guilt feelings then cause them to do things to get rid of the money, to throw it away.
- They spend it or invest it foolishly.They lend it, lose it or give it away.They engage in self-sabotage.
It can come in the form of overeating, excessive drinking, drug usage, marital infidelity, and often dramatic personality changes.
To change your results with money, you have to change your attitude toward it.
You have to make a habit of seeing money as something positive.
The fact is that money is very much like a lover. It must be courted and coaxed and flattered and treated with care and attention.
It gravitates toward people who respect it, value it, and are capable of doing worthwhile things with it.
It flows through the fingers and flees from people who do not understand it, or who do not take proper care of it.
See Yourself As Deserving Of Money
Sometimes people say that they are not very good with money.
But being good with money is a skill that anyone can learn through practice.
Usually, saying that one is not very good with money is merely an excuse or a rationalization.
The fact is that the person is not very successful or disciplined with money.
The person has not learned how to acquire it or to hold on to it.
The starting point of accumulating money is for you to believe in yourself.
You have an unlimited capacity to obtain all the money that you will ever need.
Look at yourself as a financial success waiting for a place to happen. And see yourself as deserving of all you can acquire.
Money Is Essential To Our Lives
Money is good. Money gives you choices and enables you to live your life the way you want to live it.
Money opens doors for you that would have been closed in its absence. Additionally, your credit score can impact your life insurance premiums, with lower scores often leading to higher costs due to perceived risk.
But just like anything, an obsession can be hurtful.
If a person becomes so preoccupied with money, he may lose sight of the fact that money is merely a tool.
If money becomes something used to acquire happiness, then it becomes a harmful thing.
Money is essential to our lives in society. It is also neutral. It is neither good nor bad.
It is only the way that it is acquired and the uses to which it is put that determines whether it is helpful or hurtful.
Take Action!
Here are two things you can do immediately to put all of these ideas into action:
First, recognize and accept that virtually everyone who has money today at one time was broke and probably broke for a long time.
Then they learned the skills of accumulating money and they are now financially independent.
Whatever they have done, you can probably do as well.
Second, become a student of money from this day forward.
Study it, learn about it, and apply the lessons you discover toward your own financial life until you begin to attract more and more money in your direction. Staying informed about financial news and developments in the stock market is crucial to making informed investment decisions and maximizing your returns.
Work with a Financial Advisor
Working with a financial advisor can be a game-changer in your journey to achieve financial freedom. A financial advisor can provide personalized advice and guidance on investment decisions, retirement planning, and other financial matters. Here are some reasons to consider working with a financial advisor:
- Personalized Advice: A financial advisor can offer tailored advice based on your unique financial goals and situation.Investment Guidance: They can help you create a diversified investment portfolio and provide insights on making informed investment decisions.Retirement Planning: A financial advisor can assist in creating a comprehensive retirement plan, ensuring you have a strategy for retirement savings and income.
To find a financial advisor, follow these steps:
- Ask for Referrals: Seek recommendations from friends, family, or colleagues who have had positive experiences with financial advisors.Check Credentials: Verify the financial advisor’s credentials, such as their certification and experience, to ensure they are qualified.Interview Potential Advisors: Meet with potential advisors to find one that aligns with your needs and goals.
By seeking professional advice, you can make informed decisions and achieve your long-term financial goals, ultimately reaching financial freedom.
