If one of your goals in the New Year is to be financially prosperous, you have to understand the keys to financial freedom. Taking personal responsibility for your finances is also key as without it, you’ll keep blaming other people for your financial situation.
What is Financial Freedom?
It’s a very subjective question as what I consider financial freedom may not be what you consider it to be. For me, financial freedom could be freedom from debt, while another person may see it as being free from work (not having to work to earn a living).
Financial freedom is unattainable without a positive mindset. Researchers say one thing common to all successful people is their positive mindset; their belief that they could become a success. If you are reading this and wondering how this can be true, I recommend you watch the movie titled ‘The Secret’. It would blow your mind as to how the things we constantly think about become our reality.
Two Steps to Financial Freedom
There are two basic steps to attaining financial freedom:
- Investing in yourself
- Investing in Assets
Investing In Yourself
Investing in yourself means empowering yourself to create and re-create wealth (should you suffer any financial mishap along the way). Investing in yourself means raising your intellectual capacity to the point where you’ll always be able to create wealth. Suffice to say, financial freedom should start with the person who wants to be financially free.
Below, I present some ways to invest in yourself for financial freedom.
Whichever way you see it,financial education is key to financial freedom. It is how much you know (financially) that determines how much you can use to your advantage (financially). While academic education has its’ relevance, it rarely teaches us about personal finance. Many College graduates have no clue as to what the future holds for them financially. Financial education would imply attending seminars, going for short courses, reading up books, newsletters and blogs, watching videos and listening to audio about financial freedom. Joining a club where other people aspiring to be financially free would help as their conversation would refine your mind and thoughts.
- Getting a Mentor
Support is a major key to success. A mentor helps in ways books can not. Mentors are like tour guides who show you around and tell you about a path they have already trod. They help in giving advice that makes you wiser and smarter.
Investing In Assets
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. In simple terms, an asset is anything that brings money to your pocket. Investing in assets is arguably one of the best ways to achieve long-lasting wealth and success. The reason is simple: investing opens you up to opportunities to leverage your income and rapidly expand your earning capacity. That's why wealthy people talk about successful investments that made them rich. If you don't invest, your financial growth will be limited.
A good understanding of what to invest your money in would help your journey in becoming financially free. Purchasing cash-flowing assets that would in turn make you more money is the key. This kind of income is called passive income. A major characteristic of passive income is you do not have to be physically present to make the money.
Most people struggle financially because they rely on their job for income rather than their investments in assets. It is delusional when you think your job, car, home are assets; they are liabilities that take money away from you. Investing in assets is not as hard as financial experts make it seem. It can be slow and strategic. If you have a day job, you don’t have to leave it to start a business,you can start buying real assets, not liabilities that have no real value once you get them home. So, what I’m saying is, you don’t have to start your own business to mind your own business. However, if you feel you should start a business please do.
The following are assets to consider investing in:
- Businesses that don't require a personal presence
- Cash-flowing real estate
- Notes (IOUs) i.e Royalties from intellectual property such as music, scripts and patents.
If you're ready to begin investing in becoming financially free, I urge you to start by investing in your financial education. By building your financial knowledge base, you will be well-equipped to begin building your asset base. If you ever get confused, feel free to seek help with a financial advisor you trust. As we approach year 2013 know that your actions and decisions would determine its’ outcome. Freedom awaits you!