Monday, January 18, 2016
3 Things to do to Reach Financial Freedom
Let's face it. Many Americans struggle with their finances. If you are like most people, you were not educated by your parents or at school about how to handle money and become wealthy. But this blog is not about how we got into our situations, but instead how to get out of it and reach financial security and freedom that we all dream about.
Here are the first 3 things you need to consider in order to get to financial security and freedom. (I will cover each of these in more details in future blogs.)
1. Reduce Your Spending.
The way you do this is to create a budget. The reason why is because you have to know where your money is going. This might take some time. A simple method is to list all the categories of what you spend your money on... food, clothes, entertainment, alcohol, utilities, phone, cable, mortgage or rent, car payments, etc.... then decide what you don't have to have. For me, one thing I cut was my cable bill. For some this may be a real challenge. There are alternatives, such as getting a box for the free channels and using your computer to access Netflix or Amazon or Hulu. Set a limit on your spending for those things you can't eliminate.
2. Manage Your Finances
Here are a few basic tips.
If you are a Christian, the first principle should be to tithe. This is not easy for many people. Many people do not give a full tithe, which is 10% on your income or only give something after they have paid all their bills. However, try it the other way and see what God will do for you.
The next principle is to "Pay Yourself." This means putting aside a little each week or paycheck into a savings account. Preferably, this too should be 10% of your income but even a smaller amount to start is better than none. You need to do this in order to create an emergency fund and to have a large amount in order to make investments.
The next principle is to pay off your existing debt. The technique is referred to as the "Snowball" effect.
Here is a great youtube video by Robert Kioysaki (author of Rich Dad, Poor Dad) about How to Get Out of Debt to get you started.
3. Create More Income, Especially Passive Income
I learned how to do the math early in my life. I know that I can work 40 hours a week for $10 an hour or I can work 10 hours a week for $40 an hour. Of course, we are all looking for those promotions and higher paying jobs. But regardless of how much you earn per hour, when there are only so many hours in the week and only so much energy you have to work. And jobs do not go on forever.
So the next method to consider is to create passive income. This is money you receive each month that you do not have to put in extra time and effort for. This involves finding and keeping repeat customers for many years. I am not talking about a "get rich quick scheme" or "pyramid scam." I have a home-based business with Shaklee Corporation that continues to pay me each month on work I did years ago! As I continue to work on my business to find new customers, my income continues to grow. If I don't have time to work on my business, I still get income from my existing customers! This is all done with a zero to very low financial budget, so anyone can do it.
Are you interested in having a home business that will create both immediate and long-term passive income?
I am looking for others who would like to join my team. Wouldn't it be worth checking out more information? Contact me for more information or to schedule an appointment at firstname.lastname@example.org (please put in the subject line - Read Your Blog.)