Gaining Financial Freedom
Ever hoped to achieve financial freedom and graduate from the rat race? Ever wanted to go on vacation… forever? This is a worthy goal that many desire, but few will ever accomplish. How would you provide for yourself anyhow? No matter how hard you might try, the “job” always seems to weigh on your neck, right? Does financial freedom always seem like an impossible dream? Is there a way to sit at the other end of the table and not have to trade your personal work for money anymore?
The trick to true financial freedom and having adequate money to retire early is to increase your income and reduce your expenses. This may not be as hard as you might think. All it takes is some foresight, some will power, some planning, and a few tips.
1) Live Frugally
Live within your means… without chasing after useless things that will just end up in a yard sale. Cook your own meals instead of constantly eating out. You will be shocked at how much money you will have conserved. Financial freedom comes from avoiding excessive consumption.
2) Reduce Your Expenses
Be cognizant of your cash outflow. Keep a record of your expenses and compare them to a pre thought out “financial freedom” budget. You must commit to managing your living expenses if financial independence is your objective. Do you really need the most expensive option for cable? Do you really need yet another pair of shoes?
3) Get Out of Debt
When you reduce your living expenses, you will free up some financial resources for other things. Debt is slaver. Financial freedom is liberation from the slavery of consumer debt. Increase the payment on your credit cards with your extra money. Begin with the credit card with the highest interest rate. This will most certainly reduce your debt service, and it is similar to earning your credit card’s interest rate on your own money, since you no longer have to pay them that interest payment.
4) Save For Your Retirement
Once you begin repaying your highest interest rate credit cards, there will be an even larger increase in your excess monthly cash flow. Start putting that money into investments that can produce even more cash flow. You accomplish financial freedom when your passive investment income is larger than your living expenses. It is most helpful to find investments that are scalable, so that you can add more funds to them at will, and have your next dollar earn the same return as the previous dollar. Make money your slave, don’t be a servant to money.
5) Invest In Your Retirement
Try to find investments where you can taken risk out of the equation fairly quickly, while making an attractive return. Certain managed investment accounts can accomplish this. These are non-traditional financial freedom vehicles. The main risk to manage is risk of loss of investment principle. When you’ve removed your original investment principal from the investment, you’ve effectively removed that risk out of the equation and your money in that account is now growing for you essentially risk free.
6) Have a Goal For Your Retirement Date
What the mind can conceive and believe, it can achieve. Your primary financial levers for getting there are 1) the amount of investment capital you are using and 2) your return on your investment. When planning your financial freedom, start at the end and work backwards, to calculate how much return you think you’ll need to get, and how much money you’ll need to start with. Can you get only 3% return or can you get a 60% return? Some currency trading strategies can perform at these higher levels. Or perhaps, can you use $100k of other people’s money, or must you only work with your own savings? Once you know those two things, you can then start looking for ways to get access to that amount of capital and get that target rate of return.
7) Control Your Retirement Expenses
If you have your house and cars almost paid off, you might not actually need very much cash flow in order to retire early. This is especially true if you retire in a place like Costa Rica. You can live very comfortably there, on a low budget. The more extra income you’ve been able to build, the more places you can live, for whatever length of time you choose. This is financial independence. By adhering to the above financial freedom plan you will be pleasantly surprised at how much you residual income you can actually generate.
By living on a modest budget, you will discover a decrease in your regular expenses and an increase in your monthly excess income. Then use that excess income to rapidly bring down your debt expenses. Always set aside an amount for investing. Establish your retirement goals by beginning with the end in mind. Stick to living within your means and financial freedom will become your reality.


