What does financial independence mean to you? Do you need to be independently wealthy in order to achieve it? The answer to the second question is no. Only you can answer the first question, but for many, financial independence does not really mean never having to work again but only working when and at things you choose to. It allows you to truly follow your passion. However, even if you are making a reasonable salary, getting to this point may seem impossible. The tips below can help.
The Basics
Your first steps becoming familiar with some money saving tips, and you need to include getting out of debt and controlling your spending in your plan as well. Although you will eventually have multiple streams of income, it’s still a good idea to maintain an easily liquidated emergency fund as well that has three, six, or even more months of expenses covered. In addition, you need to be in a position to contribute to a retirement fund. There are many apps and other tools that can help you make a budget, get out of debt, start investing, and more. You may also want to visit a financial professional for assistance with getting your finances in order. Be patient as these steps may take a few years to complete, depending on the condition of your finances.
Real Estate as Income
Once you’ve got the basics down, your next step is to look into ways to generate income even when you are not working. An excellent way to do this is through purchasing real estate. You don’t necessarily have to buy an entire property in order to get such benefits as rental income and appreciation. You can actually purchase shares as property just as you would do with stocks, and real estate can be a better investment than stocks in the long term. Eventually, you may want to purchase one or more rental properties that you have full ownership of as well in order to further diversify your income streams, but purchasing shares is a great way to get started.
Other Investments
It’s a good idea to look into other investments too. Being able to place your money in multiple places where it will grow in value and generate additional wealth for you is important. Getting started in investing is easier than ever, and you can create a brokerage account online and be as hands on or as hands off as you’d like to be in managing your money. Keep in mind that unless you do plan to be hands-on, the best strategy for stocks and similar investments is generally to take the long view and understand that despite short-term fluctuations in the market, your money will generally grow over time.
Many Income Streams
Depending on what you do for a living, you can explore many different income streams. These include writing eBooks about something you specialize in and creating other content online, such as blog posts, podcast, or videos. You can also set up affiliate links, which provide a small amount of money to you each time someone follows a link from your site to purchase a product or service. In addition, you could do contract, seasonal or temporary work to cover basic expenses while your wealth quietly grows in the background.
