Financial freedom is one of the most good things can happen to you in your lifetime.
To attain financial freedom you need make yourself under stand the situation that you are in currently. How much your earning and how much your expenditure is. With these two in place and you have done your financial self analysis report you can start doing some investments into some well versed financial instruments.
First look into your income/paycheque that you are getting. With your paycheque as your starting balance make sure to note down all of your expenses.
Most of your expenses will be:
- Rent/Home Mortgage
- Fuel and Travel expenses
- Water Bills
- Other miscellaneous expenses like Netflix, Amazon Prime, etc,.
These where the most of your expenses go to. If you are spending all your income and you have none to save, I am really sorry to say this your getting into a deep trouble.
The main thing you have to do now is to cut down your expenses like removing miscellaneous expenses, going out for dinner and limiting your groceries nice things to have list. I am not you should go fasting in order to save the money. Save in terms of buying expensive ingridients like meat, and other expensive vegetables to only twice a month.
Then try to reduce your electricity bill, don’t use your A/C when it is not necessary. Switch to power saving LED bulbs. This will save you a ton of electricity charges.
If you are paying rent for a bigger home than what you require then downsize.
When you have a housing loan then you can’t consider the house changing factor.
There are some simple steps that you can do to make yourself financially independent, they are as follows
1. Save initially upto 6 months of your salary
The first step towards financial freedom is to save yourself a considerable amount to make sure that you have some backing support to do some venturing. With this six month leverage you can prepare yourself for the worst case scenario.
2. Pay off your debts
Paying off your debts and credit card EMI’s will make sure that you aren’t losing money at a regular basis.
One tip is that, if you don’t have the money to buy a PS5 don’t buy it.
3. Invest into external Provident Funds
Your employer will already have a premade PF account for you. Along with this invest into external PF’s in private banks that gives you more returns along the line.
Invest mostly into pension plans, that is one way of safe gaurding.
4. Invest in Mutual Funds
Do a research into mutual funds, mainly SIP (Systematic Investment Planning) Mutual funds. Look at where the mutual funds are investing in the document. One suggestion is to invest into Hybrid Mutual Funds and Index Mutual Funds.
5. Invest into Stocks
Look into what are all the blue chip stocks that are available in India. Then invest your money diversifying into many sectors of these blue chip stocks. Invest regularly into it and the power of compounding will make you wonders.
6. Learn to build a side business and get a promotion at your job
The sure shot way of climbing the financial ladder is to start a lucrative business or to get into a high paying job as soon as possible. Make sure that you get increments of atleast 20% of your salary year by year.
These are some simple steps that you can follow to make yourself financially independent.