Imagine a life where you had no debt and could just about anything you wanted. Sounds pretty good, doesn’t it? For most people, even ones high paying jobs they’re still financially free. They may still have a mortgage or car payment each month, or maybe they have a bad habit of overspending, so they’re still paying off credit card debt. Here’s what you need to know about finding financial freedom.
What is Financial Independence?
Living financially free is more than having your own job, and understand financial basics like the difference between credit and debit, and how to create a budget. It’s about earning money to pay all of your recurring bills and still have enough to live comfortably without having to worry or cut corners. While some people do get lucky and get a lucrative job right out of college, a large majority of grads are buried in student debt and take an entry-level position. Eventually, they get promoted and earn a more livable wage. They’re able to pay all their bills and start paying down their debt.
Unfortunately, this is where things can start to unravel. The more money someone earns, the more they have to pay back on their student loans. This, in turn, can cause financial issues and possibly cause someone to have less left over at the end of the month than when they earned a lower salary. If this scenario sounds entirely too familiar, you need to take action.
Even it’s only $50, you can start investing in stock. In fact, some types of stock cost even less than that. Write down what your financial goals are and then get to work. Research what each type of stock, bonds and mutual funds are and what kind of return you can expect.
Start a Side Job
Working a side job, or as it’s more fashionably known today, a side hustle, is easier than ever. All you need is a laptop and an idea. You can sell just about anything online, so don’t think you have to stick to tee shirts. You can sell products from other people, or you can use your skills to make money. Over time, you might even surpass your current income. There are plenty of full-time freelancers who did just that. You also need to save as much as possible from your side hustle. You can put it into a savings account or again invest it.
Day trading is another viable option for those who are more looking for financial freedom than immediate emergency funds. Day trading is the buying and selling of stock within the same day, possibly several times a day. If you’re familiar with the process, you can make a considerable amount of money. If not, you definitely need to learn as much as you can. There are plenty of free day trading guides for beginners you can review prior to getting started.
Open the Right Type of Accounts
Depending on your financial goals, you need more than one type of account. You should set up an IRA or 401(k) for retirement. You should have an emergency account for anything that life throws at you. You should have between three to months of your total monthly expenses in this account.