How to ensure financial independence in 2020

financial independence

The deepest desire of many people is to achieve financial independence. Yet many of them are stuck wondering how to get there. The problem is, while they are very clear about the desired outcome, they are not able to figure out how to achieve it – possibly because there isn’t a clear roadmap for financial nirvana. There are so many factors for each person’s unique situation that there is no simple one-fits-all plan. However, there are some common steps everyone should consider taking on their way to financial independence.

Assess your current financial situation

It is essential to take stock of your financial situation frequently and ask yourself the following questions:  What are the precise amounts of money that you receive each month? What are your charges or your monthly expenses that are fixed and which are flexible? After putting on a paper all of your monthly expenses, what is the exact amount of financial resources left in your bank account? What is the precise amount of money you have in your savings account? Answering these questions will help you in creating a big picture of your financial habits

Track your expenses

You must learn to keep your expenses to a minimum and refuse to spend your money on unnecessary things that give us fleeting pleasures and the illusion of being rich.

We live in a society where advertising machinery encourages us to consume new products all the time. It is often difficult when earning an average or slightly high salary not to succumb. It’s the reason why you frequently use part of your salary to buy a new laptop, a new television, new clothes. And you take loans to afford a car, a house or sightseeing trips. By acting this way, one is generally very happy because these are deserved rewards. These are the fruit of your work, and you have every right to have fun or use your income as you want.

You think that you should enjoy life here and now because you don’t know what the future can hold. But it would be wiser to step back and think if you can obtain greater benefits by managing your income differently. If you spend most of your money,you doom yourself to work non-stop to maintain this way of life.

 Start Investing To Achieve Financial Independence

To move towards financial freedom, you must stop spending your income on paying for things that do not earn money in return. You must, above all, acquire the assets that bring or will bring you the money. Usually, this is what rich people do. They make money work for them and grow. They always think about investing.

When you see they are spending 10 million to afford a luxury villa, they have already invested millions in assets. They bring them a lot of money back. You can and must also be financially intelligent and prioritize using a significant portion of your income to acquire the assets. If you can’t invest in assets, you can make an effort not to spend your money on things that are not indispensable to your existence and happiness.

Acquire some knowledge in finances

If you are looking for financial prosperity and financial independence, you must acquire knowledge relating to the subject. In school, college, or university, you don’t get the knowledge on how to achieve financial goals and to prosper financially. You usually have many gaps in money management; you don’t know the strategies for becoming financially prosperous. The studies have conditioned us to think that it is only by getting a stable job. The graduates are lined up to be recruited by the public service or private sector.

And when you get the job and earn a salary, you easily fall into the trap that can lead to a situation where you are always short of money while working hard every day. Personal finance books are a good source of knowledge to compensate for your lack of information. The especially useful ones are those written from personal experience with the concrete examples from real-life situations.

Starting a business is a road to freedom

Starting a business or becoming self-employed is the royal road to becoming financially prosperous.  People who start their businesses and who are successful are those who do not think only about their interests, but rather are concerned with bringing constructive things or very high-quality services and products to several clients. They continually strive to improve the value or quality of the products and services they offer to them. They often seek to provide more effective or efficient solutions to resolving specific problems that certain individuals face.

When you allow hundreds or thousands of customers to satisfy their desires or solve their problems effectively, it only makes sense that you receive a lot of rewards in return. Customers will love your products greatly and services. They will consume them abundantly, and you will have large sums of money deposited in your bank accounts.