Financial freedom is when you are able to live life without constantly worrying about money. It’s when you feel comfortable enough to follow your passion instead of thinking about the income you are bringing in. In today’s times, even though people earn prestigious six-figure salaries, the struggle for financial freedom continues. The road to financial freedom is much more than just working towards adjusting your salary income upwards. It involves maintaining discipline and changing your financial habits along with making the best financial decisions with the financial resources in hand. We have tried to put together three key things that keep you away from such discipline and hence, our financial freedom.
1. Investments are complicated and risky / I am not good at managing money
Are you one of those who panics when you hear the word Investments? Well, you’re not alone. A lot of people in the world equate investments to losses. What they fail to understand is that investments are appreciating assets. We don’t think twice before buying a depreciating asset such as mobile phones, cars or luxury watches, however, when it comes to an asset that has the potential to grow your money instead of depreciating it, we often avoid it by saying ‘it’s complicated’. Investments are nothing but a mode through which you are paying for your future self.
Financial management is not a talent that any of us were born with. Luckily in today’s time, thanks to technology and abundance of resources, we have various tools available that can help us with financial planning. Hence, ‘Investments is not my thing’ or ‘Investments are complicated’ can no longer be valid reasons for poor financial management. To ensure a sustainable future you must make your money work hard, just like you did in order to earn it.
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2. Keeping up with the Joneses
To keep up with the Joneses means succumbing to socioeconomic pressures and purchasing objects on impulse rather than recognizing the actual need for them. There are several times when you feel the need to upgrade your house, your car, your phone etc. given that everyone around you has, and inevitably you do too, in order to keep up with them.
When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to “afford” things. Debt-driven consumer culture pretty much guarantees that most of the things you desired were bought on credit, rather than being bought with money already earned. As a result, keeping up with the Joneses likely means that you are keeping up with their debt — and their interest payments. Instead, it makes more sense to figure out what your true needs are, regardless of what those around you are doing.
Always remember, change your priorities, know what really matters to you, forego impulsive purchases in exchange for long-term financial freedom, and START PLANNING. You don’t have to live like a king today if it means you’re going to live like a pauper tomorrow.
3. I’m too young to worry about my savings
Millennials today like to work hard and party harder. Saving for their future is never on their bucket list and is always thought of as a ‘later-in-life’ thing. The problem is that by the time they realize that time is not infinite, they have wasted a lot of it.
Advantages of investing early:
Time: If you believe that you are too young to worry about saving for your future, think again. You have plenty of time to let the magic of compounding grow your wealth. Starting young will ensure that you will have enough surplus to meet all your future needs.
Risk taking ability: Your age influences the amount of risk you can withstand. Young people, with years of earning ahead of them, can afford to take on more risk through their investment activities. They have the flexibility and time to study investing and learn from both successes and failures.
Hence, today ensure that you keep these three things in mind and make sure you will reach a stage where you’ll never struggle with money again. The road to financial freedom is a long and boring journey which requires immense patience. However, this time it’s not about the journey. It’s about the destination, and that destination is your financial freedom.