To some people financial freedom may refer to a lack of worry - you have enough funds to meet your family's needs, and some surplus.
To others, financial freedom means freedom from loans - not having to set money aside for the next EMI, owning your assets outright, this is freedom from debt.
To others still, it means being a strong financial provider - providing a better future for your family than you had yourself.
The interpretations are many - and each one is personally valid and important to its interpreter.
We all have certain financial freedoms that we want to attain.
At SAMPARK we understand that your family is important to you. Providing for them and taking care of them and yourself, and living the kind of life you want to live, is the reason you work so hard to earn money.
So, here's a small list of things you should do, easy things that will help you attain your own financial freedom.
1. Define Your Freedom List
Make a Freedom List - containing not more than 3 goals - that you must achieve to consider yourself financially free.
These 3 goals will most likely be the most important goals to you in your life.
Examples of these goals might be:
- Retire at x age with a corpus of Rs. Abc
- Educate your children at good colleges
- Financially provide for your parents
- Prepay all loans and be debt-free
- Provide for marriage expenses for your children
- Buy a bigger home
2. Quantify your Freedom Goals
Remember how your parents used to tell you that when they were your age, a soft drink cost 8 annas?
More than one kid has thought to themselves 'I wish you had bought 100 bottles of Pepsi and stored them!' But what we don't realize is this is the effect of 10% per annum inflation. A very normal inflation rate for such goods.
Take your freedom goals and consider what they will be when you want to achieve them.
If you want to provide for your children's education and marriage - consider what it costs today and inflate the cost by 10% per year. Know how much you want to achieve, and by when you want to achieve it.
Do this for each of your goals, have an amount and a year by when you want to achieve the goal.
3. Save and Invest regularly - remember, Rome wasn't built in a day
Your goals are probably looking pretty big once you've quantified them, as they should be.
This kind of money takes years to build, and everybody starts small.
If you have a goal of becoming debt-free, you can slowly teach yourself financial discipline. Save what you can and repay your debt a little at a time. You can also restructure your debt, for which you need to talk to and negotiate with your bank.
If debt is not your concern, and you're looking to grow your wealth, then set aside your savings and invest in those avenues that suit your goals. For example if you have a short term goal, invest in debt i.e. fixed income. For a medium term goal you can invest in a combination of equity, debt and gold with a higher proportion in debt and gold and a lower proportion in equity, and for a long term goal, invest in all 3 asset classes with a higher proportion in equity and a lower proportion in debt and gold.
Stick to your investment plan, don't get swayed by internal or external circumstances changing, and within no time you'll find that you can give yourself a pat on the back for being well on your way to achieving your goals.
To attain financial freedom, above all, you have to be patient. Trust that you will get there.
Wealth building is a gradual process. It requires continuous investing through market ups and downs. Don't let yourself get swayed by fancy structured products, the latest mutual fund recommended by your bank, the hottest stock invested in by your neighbor. Have a plan, know which investments are the right ones for you, and invest in them regularly for the long haul.
Here's wishing all our readers a happy and financially free life!
Source : personalFN