Your Ticket to Financial Freedom in 7 Steps
I often sit down with clients and talk about their dreams and goals for their life. And in nearly every case, financial freedom is in their top five goals. But what does this term mean in practice? And how can you make it happen?
Financial freedom can mean different things to each person, but when I ask my clients, four key aspects come up every time.
Being debt free, being in control of your money, retiring early, and owning everything.
Being debt free is simple; repaying your mortgage, and not being burdened by the stress and extra cost of repaying a loan with interest.
Being in control of your money is not feeling like you’re living pay to pay, or that your debt is increasing, but being able to spend money when you want on what you want, without worrying about money.
Retiring early lets you enjoy life and not have to work. You can travel the world, participate in community or non-profit work, and not stress about your income.
Owning everything is scrapping credit cards, pay-later schemes, car loans, and personal debt, to own outright every possession in your life.
Sound familiar?
The Seven Steps to Your Financial Freedom
1. Stop hoping for that big lottery win. Your chances of winning the lottery are 1 in 45,000,0001! If you want to seriously move towards financial freedom, you need to take control.
2. Achieving anything in life starts with a plan. You need to have a plan for your money, and if you have a partner, you need to be on the same page. You need to have someone to keep you accountable – a friend or partner works well. When you plan, write down your dreams and goals, everything you can possibly think of! When we set aside time to write everything out, things surface we never would have thought of before. Asking great questions outs you on the right track to finding great answers.
3. Now we start putting your plan into practice. Building wealth is impossible living pay to pay, so the first step in your action is starting a budget. You can track your budget to know where you are spending, and where you can save. If you can, you should budget emergency savings for three to six months’ worth of living expenses. Budgeting is the core foundation to building wealth.
4. Get rid of bad debt. Having credit cards and personal loans restricts your independence and wealth building. Taking action to reduce this overtime as soon as possible will set you up for the next stage of financial freedom, and save thousands in interest.
5. Build your income. Most people in a comfortable financial position have built up a solid income and been smart with their earnings. Do you enjoy your job? If you are passionate about your work, you will naturally progress further through opportunities and potentially increase your income. Consider further study to invest in yourself and improve your employability. You should also think about income protection, you wouldn’t want to lose all your hard-earned progress to a freak illness or injury.
6. Grow your wealth. One you have your income in order it’s time to start on your investment journey. Your options could include shares or managed funds, investing in superannuation or property, and the list goes on. The sooner you start investing, the more time you have to grow your money and reach the peak of financial freedom.
7. Review your plan and remain active. You cannot expect to set and forget your plan. Track your progress in saving, review your investments and portfolio, stay in touch with changes to rules and regulations such as tax laws to ensure your advantage in every stage of the process. Having someone to keep you accountable and ensure you are on track will get the best out of you.
If these steps sound daunting, or beyond your reach, then you need to speak to someone who can help you reach your full financial potential. At 7 Wealth we keep you accountable, and guide you through every step along the way. If you would like to achieve your financial freedom, give us a call at 03 4411 8744, or contact us online.
7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
April 18, 2018
