Financial Freedom is a very important aspect of every individual’s life. All human being wants to become financially free. We all want to lead a happy and free life, without worrying about paying our bills or mortgage. But very few people all over the world attain financial freedom. There is a secret to financial freedom. First, off all, we should need to understand the term Financial Freedom. What does it mean to lead a financially free life? Many individuals in our society do their routine day to day job to satisfy their needs or to fulfill the basic requirements they are required to carry on with a job or work, which will satisfy their future needs. But are they really in a position to secure their future needs without worrying about their life expectancy? Financial Freedom is a situation where there is no need for an individual to work for meeting their future financial needs. In short, it means there is no need to worry about the inflow of money to our bank account, even if we are not in a position to work. But in reality, this is not the situation, every individual has to keep on work for meeting his/her basic expenses in life. Thus there is a need for every individual to understand how to attain financial freedom. Attaining a financially free life will allow us to enjoy our dreams in a peaceful and dignified manner.
STEPS TO ATTAIN FINANCIAL FREEDOM
1. READING BOOKS.
Gaining knowledge on how to manage finance is the first step to attain financial freedom. First, start reading newspapers and magazines related to money matters. Ask advice from experts who are from the field of financial management. Cultivate a habit of giving value to money. Study the market trends, which will give you a good return by investing a nominal amount for a longer period to time. Read books on how to attain financial freedom.
2. PASSIVE INCOME V/S ACTIVE INCOME
Understanding and learning how to generate passive income along with active income. Gaining a complete knowledge about Active Income along with Passive Income.
ACTIVE INCOME is an income that we make in our entire life as long as we are working continuously. The movement we stop working, our income stops. Active income means that income which we generate by working actively through our entire life. The movement we stop working there is no inflow of money to our account.
PASSIVE INCOME means that income which we generate by doing work for a limited period. There is no need for an individual to work for his entire life to create an income. Money works for that individual. And even if he/she is not working money keeps on getting accumulated to his/her account. Understanding the power of Passive Income and taking steps to attain it will play a crucial role in any individual life.
3. WEALTH ACCUMULATION PLAN
Gaining knowledge on how to make money work for us will help an individual to a certain extent. But applying that knowledge will help him/her to attain financial freedom. An individual should be in a position to use the money to create more money, which will help him/her to build a corpus during retirement. Wealth accumulation is needed for attaining financial freedom. There are many investment plans which help an individual to build a corpus by investing a nominal amount. But at the same time, there should be a continuous inflow of money to his/her account. Even if the individual is not working.
4. CREDIT CARD TRAP
Stay away from the credit card trap. A credit card helps an individual to satisfy their immediate needs, but in the long run, it can ruin their financial independence. By using a credit card, an individual is spoiling his/her habit of saving for the long run. And if they fall short on repaying the credit amount within a specified period, they will have to pay a huge amount of interest on the amount taken. Knowing how to spend and use your money in a wise manner will help everybody to stay away from debt. A credit card is a form of debt which needs to be handled smartly. A credit card can be used for emergencies, but the individual should be in a position to repay it as soon as possible. Smartly use a credit card to enjoy its reward point, which can be used to buy more basic things for free
5. EMERGENCY FUND
Last but not the least to enjoy Financial Freedom, everybody needs to build an emergency fund that will help an individual to face unforeseen events in case of loss of a job, the occurrence of any critical health problems. These Emergency funds will help any individual to face these problems without any stress or worry. Emergency Fund will help everybody to carry on day to day activities with ease. It will help them to meet their current financial needs.
Read About: Financial Security Guide