Financial independence can be defined as having enough money to live a comfortable life without working. Financial independence can, in fact, mean different things to different people.
Financial independence secures your future and allows you to pursue your passion. It is the ability to make life decisions without being constrained by financial constraints. Financial independence removes dependency and shifts the focus on what I need and want in life. According to Aegon’s Retirement Readiness Index, 55% of working people are saving for retirement.
While we take on and repay our debts to be free of our previous financial worries, it becomes important to have a plan to achieve this freedom. Here are some of the features of this strategic plan:
Your financial goals are unique to you. Consider your long-term objectives. Do you want complete financial independence—the freedom from having to work for a living and the ability to do whatever you want? Or are your goals more modest?
Your age and financial situation will have an impact on your choice of objectives. If you are in your twenties or thirties, you have decades to accomplish your goals and the ability to take more risks. At this age, you might want to think about considering the FIRE (Financial Independence, Retire Early) strategy, which entails an extreme savings and investment strategy designed to allow you to retire much earlier than normal.
If you are older, say between the ages of 50 and 65, you almost certainly have retirement-savings goals, but if not, there is still time to plan for financial independence even if you do not. Depending on your goals and assets, this may entail a riskier investment strategy to compensate for lost time. Alternatively, you may need to rethink what constitutes retirement comfort.
Which tools (weapons) will you require to achieve your goals? These can include a variety of income-producing assets, such as a savings account or CDs, as well as a portfolio of dividend-paying stocks, bonds (or bond funds), and real estate.
Many people’s largest asset is their home, which can be converted into equity or used in a reverse mortgage to help fund retirement. And that isn’t the only way to make a real estate investment. Rental properties can generate significant cash flow, but they can also require significant investment and risk. Another option is to invest in real estate investment trusts (REITs).
Starting and running a profitable business with the eventual goal of either not being directly involved in day-to-day management or selling the business for a big profit is another wealth-building asset.
Begin by creating a budget that considers your income and other assets, allows you to pay your bills, and, if feasible, allows you to save and invest. Consider your budget as a road map to financial security. Pay attention to where your money is going and stay away from dead ends. Wherever possible, cut costs to free up funds for saving and investing.
If you have access to one, take full advantage of any retirement savings plans.
Similarly, establish an emergency fund to offer liquidity when you need it the most, such as for an unexpected (but required) expense. It’s critical to prepare for unforeseen circumstances that could ruin your efforts. It doesn’t have to be a pandemic; it could be a disease, a job loss, or a downturn in the economy, similar to the Great Recession of 2007–2009.
Finally, construct an investment strategy that takes advantage of compound interest’s power.
The concept of “eternal vigilance” in the pursuit of liberty could also be applied to financial independence. The path to financial independence necessitates a lifelong commitment to budgeting and investing.
Continue to look for new opportunities and new ways to make the most of your hard-earned money.
Perseverance also necessitates learning the steps for constructing a profitable investment portfolio and ensuring that it is rebalanced regularly to keep it moving toward your financial goals. Then, as you get closer to retirement, make adjustments.
Getting loans for consumer durable goods with minimal documentation and flexible tenure makes you a step closer to having removed any financial dependency.
The platform works by incorporating thousands of data and intelligently infers your eligibility automatically so that you can avail of instant cash upgrades up to INR 5,00,000.
Even those without a good credit score or no credit score at all can get instant cash upgrades. Besides, EMI loans are available for Salary Cards, Edtech platforms, and multiple other brands.
Freedom did not come easily to India. It took nearly a century of struggle to achieve independence from foreign rule. So many sacrifices were made over hundreds of years of struggle before we were able to celebrate what we now call our Independence Day.
Achieving financial independence may not be easy. It may be necessary to give up some of your luxuries today in order to live comfortably later. Your efforts to save and accumulate the necessary funds to be financially independent may take a long time. And your investments may experience highs and lows at times. It is critical to remain calm and immune to disruptions while working to achieve “Financial Freedom.”
Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs!
Download the instant loan app here, and be a part of the #OneInAMillion experience.