6 Steps to Financial Freedom
This post contains affiliate links. Please see our affiliate disclaimer page for more information.
Everyone dreams of financial freedom, but relatively few ever achieve it. True financial freedom is possible, but it’s a goal that requires planning, hard work, and dedication. If you’re ready to stop dreaming and set yourself free, consider these key steps to financial freedom.
1. Change Your Mindset
You won’t ever get anywhere if you continue to think like a consumer. A consumer thinks about money in terms of what it will buy. An investor thinks about money in terms of what it can do.
Once you set your mind free in this way, you’re ready to set your finances free. Instead of looking at that bonus, raise, or gift from your great-aunt as a way to afford a night out at the movies or grab the latest gaming console, you’ll be able to see it as X fewer hours till the moment you’re free.
2. Be Willing to Go Down to Go Up
This follows on the first tip. Once you’ve changed your mindset, it’s time to change your habits. If you’re struggling to put aside the down payment you need for a rental property or other passive income investment, you have to start by making some changes.
Sit down with your significant others and consider where you could go down in order to go up. This might be lowering the data cap on your cell phone, cutting the cord on cable TV, or giving up monthly movie night for a while.
In some cases, it could be more drastic. If you sold one car and just made the second one work for you both, you could be two years closer to your financial freedom. If you downsize to a one-bedroom apartment and tough it out for five years, could you own your own home five years sooner?
3. Learn the Game
Investment is like nearly anything else: it looks scary on the outside and full of industry insider terminology and opaque concepts. Once you spend a little time understanding it, however, you go from outsider to insider.
Once you know how the game is played, you’re set to win. Don’t think of the time you spend learning about the ins and outs of real estate investment, for example, as wasted time. You have to set aside time to do it, and though you aren’t being paid for that time, the investment is worth it. Even if you’re not ready to invest, you’re ready to start learning.
4. Start Some Side Hustles
If you’ve spent all your time working for someone else, it’s time to start working for yourself. It takes time to establish a lucrative side hustle, whether that’s monetizing a blog or offering your services directly on sites like Fivver to build your reputation. Learn more about side hustles here.
Invest in your side hustles so you can start breaking free of the 9-5 grind. This might mean working less for your primary employer for a while, and that might mean less money in the bank—for a while. The key is to keep in mind that you’re investing in yourself. You’re working hard to develop yourself, and that will lead to more income, more savings, more investments, and then sweet freedom.
5. Diversify Income Streams
The more income streams you have, the more free you become. If you’re completely dependent on one stream–your paycheck from a primary employer–you’re in big trouble if you get laid off, downsized, or have to take a cut in pay or hours. If you work in IT, what happens if you develop carpal tunnel and can’t work for a while?
If you have multiple income streams, you aren’t going to be in such poor shape if one goes down or slacks off for a bit. You won’t have to delay putting aside money for your larger investments if your investment in yourself has opened up new opportunities. Look into the many ways to make passive income: selling your services directly, doing freelance design on CrowdSpring, monetizing your blog with affiliate links and paid posts, selling, or drop-shipping on eBay or Amazon, or anything your drive and imagination can handle.
6. Start Making the Big Investments
You’re no longer dependent on one income stream. You’re not thinking like a consumer. You’ve done your due diligence and know where you want to put your money to work. You’re on the road to financial freedom. Your next step is to make some serious investments.
Seek out advice to understand where the best real estate investments are. Start out with turnkey properties: they cost more, but they’re ready to rent and start generating income immediately. This lets you get your feet wet before you dive into the deep end and consider larger and more complicated property investment. As your income grows, you’ll be ready to diversify these investments, and soon you’ll realize your dream of complete financial freedom.
Take the First Steps to Financial Freedom Today
Achieving financial freedom is “in” these days. While scrolling through Facebook or Instagram, you’ll likely see other entrepreneurs selling you their programs on just how to do that.
No course will show you exactly how to achieve financial freedom. The basic understanding of mindset, the willingness to continue learning—the understanding that multiple streams of income is key—and the willingness to stop talking and take action are the first—and most essential—steps to financial freedom.
