financialtreat – will explain about Easy Tricks on How to Achieve Financial Freedom which you will get in the following article. let’s look at this article carefully!
Everyone must want the condition that their needs are met sufficiently without having to fear lack of income and work hard for a lifetime, which is what is called financial freedom. if you want to know how to achieve financial freedom you can monitor the full explanation in this review.
Before we get into the core of the discussion we will give a detailed understanding of what financial freedom means. since this term may still be rarely heard by us, it is best to recognize it more deeply. here’s the definition of financial freedom.
Definition of Financial Freedom
The definition of financial freedom is a condition where a person gets passive income from savings in a leisurely time and can meet his needs without thinking about the amount and without having to work hard.
Who doesn’t want to be that kind of person, if you want to know that we will give you the stages of achieving financial freedom. Quoted from various speakers, there are several stages to achieve financial independence, including:
- The First Stage is Dependence, which is the initial phase in which a person still depends on others to live.
- The second stage is Solvency, which is a state in which a person has income because he has entered the world of work. A person already has more money to fulfill financial obligations, such as paying off old debts if any.
- The third stage is Stability, which is a situation where a person no longer has loan debt or can pay off credit card bills, car loans, mortgages, and others without difficulty.
- The fourth stage is Debt Free, which is a situation where a person is free from all debt-shaped obligations and has sufficient savings. In a sense, a person becomes the boss of his life and generates a higher income and can save more.
- The fifth stage is Independence, which is a state in which a person has lived comfortably and independently without having to worry about running out of money or having to work for a lifetime. All income from investment assets can meet the lifestyle lived.
Determining Financial Goals
After knowing the stages of financial independence above, let’s next learn how to achieve financial freedom below.
· One Determining Financial Goals
You can start the journey towards financial freedom by defining financial goals. By determining these goals, it will be easier to prepare a strategy to achieve them.
For example, the plan to own a house in Bali before the age of 30. To realize it, what to do? How much income should I have? How to save money? Do you have to prepare an emergency fund? By doing so, you can create goals and strategies that can be done easily.
· Secondly Make a Financial Budget
After determining the goal, the next thing to do is to make a financial budget. This makes it easier to allocate income for important needs and set a priority scale every month.
· Third Invest
Investment is the most important way to go towards financial freedom. By investing in various assets and financial instruments within a certain time, you can get profits and also passive income.
Currently, there are various investments that provide returns of up to 20% to 100% per year, such as stocks, cryptocurrencies, p2p lending, forex, and others. So, instead of squandering money, it’s best to invest the money so that you can work and generate passive income for you.
· Fourth Calculating Personal Assets
Have you ever counted personal assets? Well, if you have never counted it, it is worth finding out how much it has. Personal assets can not only be seen from the amount of money in the savings account alone, but can also calculate the value of investments, vehicles, property or other financial instruments. So, try to increase assets every year, be it by investing, saving, home mortgages and so on.
· Fifth Reduce Debt
In 2022, you should take into account arrears of online loan installments or credit cards that have not been paid off. Try to keep the loan or credit card debt no more than 30% of your income. There is nothing wrong with going into debt as long as it does not interfere in meeting basic needs.
However, as much as possible avoid going into debt to buy unimportant and unneeded items. Even if you have to apply for an online loan to buy assets, such as property, it’s okay. Because property prices always increase every year.
· Sixth Have Life Insurance
Generally, Indonesians have insurance provided by the office or BPJS. However, have you ever thought about having life insurance? If not, you should have life insurance because your family will get compensation when an accident, disaster or other bad thing happens that causes you to die. So, the family left behind does not suffer and falls into poverty when you die later.
· Seventh Looking for a Side Job
Do you want to earn extra money every month in the next year? You can try to find a side job, such as selling online, becoming a freelancer, or becoming an influencer.
The extra money from the side job is also not bad. In fact, many people were initially just a whim of trial and error but because they were more productive, they finally quit their main job and focused on making money through a side job.
· The Eighth Equip Yourself With Science
“Study all the way to the land of China”. You’ve probably heard this saying. From this saying it shows that everyone must constantly learn because knowledge is very valuable and gives a wider picture of the world.
Similarly, financial knowledge will certainly help realize the dream of being financially free or becoming rich. By having knowledge, such as financial management, investment, insurance, and so on, it will improve financial conditions better in the future.
So, there is no need to go far all the way to China to study because simply by accessing Financer.com, you can read product reviews, compare to apply for the best financial products.
· Ninth Provide Emergency Fund
An emergency fund is an amount of money that is prepared and saved to live life for 3 months in case unwanted bad things happen. This emergency fund must be made separate from a savings account or investment account.
So, it’s best to open a new bank account and start saving for this. The purpose of this savings is to help you not go into debt when hit by a disaster that causes loss of livelihood.
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· The Tenth Minimalist Life
When we hear the term minimalist, we often associate it with architecture, interior design, or houses. But, did you know that minimalism can also be applied as a lifestyle. This lifestyle is also trending in developed and western countries.
The principle of a minimalist lifestyle is “less is more”. So, by changing habits and refraining from buying unimportant things. You also sell some second-hand items that are no longer used instead of making the house full of unimportant items.
By limiting buying unneeded items and selling items that are no longer in use. You can see significant changes in monthly expenses. In addition, the financial condition will be healthier, so that the dream of achieving financial freedom can be realize.
That’s how to achieve financial freedom that can be done. Remember not to spend your money for nothing, don’t get into debt and live in poverty. Hopefully you can achieve financial independence and good luck.