Would you like to be financially free? You know all the theory but, how exactly do you get started?
Everyone is different; we all have different backgrounds, interests and realities. We are in different financial positions and have different life goals, so it is difficult to give ‘step by step’ instructions on exactly what to do as far as getting financially free goes.
However, there are some basics, which are common sense and apply in general. Perhaps the world would not be in such a mess at the moment if people had paid more attention to the most important one, being Live Within Your Means. Don’t waste money on ‘doodads’; once you have built your asset column you can buy your toys.
So, to become financially free, your passive income (i.e money you don’t have to work for) must exceed your expenses. Your incomings have to exceed your outgoings. A good example of this is ‘positive cash flow property‘, where the rental covers all the bills and you get some cash too!
And, as always, you must take action! Just do it. Do anything.. write down your goals, read some books; The “Rich Dad Poor Dad” series is a good place to begin. (Robert Kiyosaki will tell you how to get started in the property game, if you’re interested). Borrow the books from the library if you have to. Download a podcast and listen to a motivational speaker. Just get moving! The younger you start the better.
The following 9 steps are a good start:
1. Live within your means
2. Don’t rack up bad debt (always pay in cash)
3. Pay your credit cards off every month
4. Pay off your mortgage as soon as you can
5. Don’t spend a lot of money on depreciating assets (liabilities) e.g cars, massive TVs
6. Work for yourself (JOB = Just Over Broke)
7. Save as much as you can
8. Buy income producing assets if you can (e.g positive cash flow rental property)
9. Have a positive mental attitude; visualise having already achieved your goals
Remember you are aiming for a better future; a comfortable retirement. Think of it as delayed gratification.
We drove around in dented old ‘japanese import’ cars for years, while our friends drove late model cars and bought boats. We lived in the same house for sixteen years (mortgage-free) while our collegues borrowed and upgraded to more expensive homes. Our peers went on extended holidays to Europe, while we back-packed around Asia.
Keep your mind on the ultimate goal of financial freedom. It’ll be worth it.