Steps To Becoming Truly Financially Independent

Jul 7, 2020 | Lifestyle

Financial independence is a goal that’s often touted, but people tend to use it in different ways. What does financial independence really mean? What is it that you’re trying to become independent of? Here, we’re going to look at a few metrics by which to measure how free your money is, and what goals you might still have yet to meet.

1.  Make Sure You’re Investing In Yourself

A lot of people who are living paycheck to paycheck simply do not need to. There are people who are stuck in bad situations where they can’t spare much money. However, there are also people living so close to beyond their means that they have no money to safeguard their future. By implementing a pay yourself first system, most people can ensure they’re working towards financial goals and savings that help them secure their future.

2.  Diversification Of Your Own Income

The more you rely on one income, the more at risk your financial future is. Most people think that working a job is enough to secure themselves, but we have all seen how easy it is to lose a job, especially in times of upheaval. Recessions are likely to become more common in the future, and there’s no job that’s truly recession-proof, so you need to look at investing and other ways of diversifying your income.

3.  Starting Your Own Business

Starting a business and employing yourself is not less risky than working for someone else. In fact, it can come with more risk depending on how much money you invest in it. However, unlike working for someone else, the risk is at least manageable. You can decrease the risks associated with running a business. You cannot decrease the risk of being let go due to market and company changes.

4.  Less Reliance On Banks

Banks play a huge role in our financial lives and most people wouldn’t know what to do without them. However, there are movements looking to shy away from centralized organizations that have full and final say over our money, such as how DTSS stops the banking fraud. After many people lost savings in the last major recession, and with the rise of decentralized saving and spending tools like Bitcoin, more people are looking at ways to reduce our reliance on banks.

5.  Stay Out Of Debt As Best As Possible

It can be difficult, given that most of us will rely, at some point, on debt to buy houses, cars, and to start our own business. However, so long as you have financial ties to debtors, you are not financially independent, it’s as simple as that. Implement what methods you can to get out of debt and try to rely more on investors and savings to float you in future.

It’s important to know that not everyone looks at financial independence the same and there may be some level of dependence you’re comfortable in having. You don’t have to cut all ties as some might suggest, but it’s worth knowing the benefits and why they’re saying that.

best,

– a contributed post

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