Here are 3 steps to achieving financial Independence

We are all trying to achieve financial independence. Wealth and Prosperity for ourselves and families. Financial independence would have different meanings and outcomes for each one of us. Some might want to be able to stop working, whilst others would like a mansion, or sports car, while others would like to build a home for their parents.

The question we ask ourselves more often than not is, How?

I want to share 3 simple steps to achieving financial independence with you. But before we delve into these 3 steps. Lets first understand some basics about money from our perspective which we would like to share with you.

1. Better Money Habits = a Better Life

   1. In order to understand this statement better, one should sit down with a piece of paper and a pen. Write down your personal financial habits. Be honest with yourself. Write down if you have high credit facilities, overspend on take out or impulsive purchases even when you don't need them.

   2. Now its time to understand where these habits and biases about money come from? A Study conducted, revealed that more than 50% of our financial habits and biases were learned from our parents growing up. Think about it for a second. The way your habits are now, does it correlate with that of growing up?

   3. Now that you have looked at this, the next questions to ask is, How has these habits worked out for you?

   4. Are you happy & content with your current money habits?

      If like most people, the answer is no, then the mindset needs to change.

   
   

2. Here are 3 steps to financial independence

   
   

   1. Step 1: Grow the Gap

      Increase the gap between your income & expenses. This is done by either

      1. Earning more (basic income + side hustle)

      2. Reducing unnecessary expense.

         
         

   2. Step 2: Invest the Gap

      The aim is to save a minimum of 20% of income. The more you leverage on savings & investments, the sooner you'll reach financial independence.

      
      

   3. Step 3: Repeat!

      Though your working career, your income will change, additional income sources like rental income and investment income added. In the same breath, your expenses should taper down as well.

Final Thoughts

Like changing anything we don't like, it will make us feel uncomfortable. It will feel new to us and our minds will often try to push us back into scenarios that feel like what we know.

When we understand ourselves better, we can employ concepts and ideas in our lives to help shape better futures for ourselves.

Do something today, that you're future self will be proud of.

Stay informed. Stay prepared. Stay financially secure.