How to get rich and achieve financial independence

If you are looking for a quick solution to get rich, move on. On the other hand, if you are looking for concrete advice on how to manage your money intelligently while working towards financial independence, then this article is for you.

Everyone has their own definition of wealth. We can be considered by others to be wealthy, even when one does not think one is. TIt's all about perspective. In poor countries, $ 20,000 per year represents a comfortable income, while in the most prosperous countries it is a pittance. Similarly, some may feel financially comfortable with a certain income, while others will have to tighten their belts with the same amount. The most important thing is not the amount available, but how you manage it.

Have some room in your budget

No matter how much you earn, if all of it goes to paying other people, you will never be rich. Only you can decide how much of your salary you want to live on, but you should never reach 100%. Hold your spending to a level that allows you to keep your head above water.  You can own a home, a car, and have a good paying job, and still be stressed and unable to pay your bills. Live within your means and save the rest of your income to build your long-term economic balance.

Limit spending

Whenever you are about to purchase something, think about whether it is the best investment to achieve your long-term financial goals. Keep in mind that when you buy a brand new car, a leather jacket, or any other such splurge, you are losing money because these assets depreciate. over time. You can of course indulge yourself in this style, but The more you limit these expenses, the more money you can invest wisely.

Stop living to impress others

Sometimes we make absurd decisions just to impress others. The sooner we understand that our self-esteem is not tied to our material possessions, the sooner we are likely to achieve financial independence. There is no shame in driving a used car with a few thousand miles on it or buying other second-hand goods. In doing so, you will be less stressed than those who work overtime at jobs they hate, just to pay their bills.

Avoid unnecessary debt

Most of the time, debt is best avoided because it costs you money. However, there are some situations where debt can be useful, such as financing your education. An education loan actually allows for much greater subsequent gains over the rest of your life. your active life. The same goes for real estate. Rather than wasting your money on renting, buy your apartment or house by taking out a mortgage. With current interest rates, you get by for less and what's more, your property will be yours.

Think of your financial security like a bucket of water. To fill it, you need to seal all the holes where water leaks. Avoid like the plague debts that make you pay unnecessary interest. They only serve to render someone else richer while you stay poor. If you have any remaining debts of this type, pay them off as quickly as possible. Start with those with the highest rates of interest. Continue until you have cleared all your bad debts (that are not based on assets that make you money).

Revisit the time

When we give our time, we usually get a certain amount of money in return. Unfortunately, we are quickly restricted by this principle because time is a limited resource. Financially free people are able to obtain multiple streams of income, passively. Think about those who own real estate. They invest very little time or effort while receiving monthly rent from their tenants. Pthink about those who invest in the stock market. After taking some time to study a company, they invest in stocks and wait patiently to receive their dividends. When you realize that you can make money in ways other than working, your financial horizons expand exponentially. Most people are afraid to take the plunge, though. After all, it can push them outside their comfort zone. And yet this is where the game is worth the candle. 

Budgeting, saving and investing

Most people are shocked when they start watching where their money goes each month. Try to limit your purchases on frivolous items, set aside a certain percent of your income for savings and investing. Learn how to invest in the stock market or real estate. All this can be done while continuing to work.

Budget your time too

Many people watch television more than four hours a day. IIt's time to review your priorities. Use an hour of TV time to educate yourself about stock market and/or real estate investing. We rarely become rich by luck, sometimes by inheritance and sometimes by work. But the best way to achieve this is ultimately to change our way of seeing things and to be willing to adopt a different way of life.

If you apply these concepts, you will put yourself on the path to financial independence. With passion, training and patience, anyone can achieve their financial dreams. Like most adventures, the time it takes to complete your adventure is different for everyone. But, like all great journeys, with every step you take you are closer to freedom.

Translated and inspired by: http://www.lifehack.org/articles/money/how-get-rich-and-achieve-financial-independence.html