Achieving goal of financial freedom is not an easy task until we take extra effort to reach to the point. Planning to achieve financial freedom and how it works for individual is more important which need to be understand thoroughly and planned properly.
We should understand that every human being has different capabilities, financial condition, liabilities and many more things which looks similar to others but actually are different for person to person. Same way financial freedom works for different people in different ways.
How financial freedom works
In developed country most of the people’s earing are same. For example there is no much difference in a labour salary and an engineer salary. But in India it works in different way. People are there those are earning from Rs 6k per month to 60k per month to Rs 6 lakhs per month and so on. Even those are earning Rs 6k per month are also manage to get shelter, food, their liabilities, Kid’s education, marriages and many more liabilities. Same way even higher income people are also managing to get the same. So everyone is managing their liabilities as per their earning structure. The cost of lifestyle is different in every segment of earnings.
So before going ahead for financial freedom we need to assess the lifestyle we want to continue after achieving financial freedom which finally define the required corpus for financial freedom. It is upto us how we keep our cost of lifestyle so accordingly how much monthly passive income we need can be assessed.
As much we keep our cost of lifestyle low, achieving financial freedom will be easy. But if we want to live life lavishly then also we need to work hard to collect big corpus to become financially free.
From where to start
We should tentatively find out how much money per month we required to live life stress free with the lifestyle we want to have where the required monthly income can take care of all our basic needs and to enjoy life. Accordingly calculate the required corpus to become financially free.
Work towards main fixed source of income
If we are thinking for financial freedom we need to create fixed source of income without that it is very difficult to start with financial freedom. This regular income of source will take care of present cost of living & liabilities and further if we can manage to save amount in the same earning then we can save & invest for financial freedom.
Find alternate sources of income
After finding main source of income now we should look for alternate sources of income. Creation of alternate sources of income is very important as after financial freedom this alternate source of income can continue and can able to given regular income. This may not be one, it can be multiple also. Developing alternate sources of income will take time hence if we start as early then we can able to get regular source of income by these alternate income sources. This will not happen overnight. To develop one alternate source of income we may take 2 or 3 or some time five years to make flow of income smoothly.
We should develop alternate source of income where with less effort we can generate income. Many people are only working 3-4 months in a years and this earnings are enough to take care of all needs and liabilities of a year.
To choose the other source of income we should also see that preferably it should be work in long time so created customer base or income can continue for longer period.
We should be debt free
This is very essential, preferably we should debt free from all loans, debts etc at the time of become financially free. Or if we have created enough earnings by passive income sources which can take care of EMIs of the loans.
Majorly all we have liability of loan of our house then durable goods etc. If we are debt free then our stress level will be very less and the passive income can be used to manage regular expenses.
Having own house
If we are having shelter then it will give big confidence to lead life. So before becoming financially free we should have own debt free house where we can live peacefully & comfortably. Also the cost of the maintenance of the house should affordable so we should not feel burden on us. The house interior requirement has to be completed in advance so further unexpected expenditure can be avoided. The finishes of house should not attract higher maintenance.
Built retirement fund
Few are the tools which is helping us to build the retirement fund very comfortably in very long run. The major tools are Provident Fund and Public Provident Fund. Small saving in these funds will create good amount of money slowly which will become big after 20-25 years. These fund are completely secured and we will get the amounts after maturity. Compound interest on the deposited amount in these funds are helping to build reasonable corpus.
In present world we can do miracle if we enhance our skills set. This will create good source of stream without investing much money. The planning should be according to our capabilities, talent, liabilities and financial condition based on which we can develop our talent which can create source of part time income.
Avoid habit for taking credits
Few are the thinks which are giving very quick access to money. Credit card in on the major mode which is giving easy access to money. Try not to use credit card until it’s very essential. Taking loan is not good for creation of corpus until we will get load with less interest rate and we can invest fetch higher returns.
Work on Idea
In this internet world the informations are easily available. Opportunity for exploring business ideas or the idea which can create continual flow of income can do great work to achieve financially freedom goal. We can take risk of small amount to explore the idea.
Built saving habit in self
Many of us are enough smart to create sources of income and can able to create income source. But same time it is very important that this earned money can be saved and invested in the best investment schemes to fetch best returns. This will happen when we will create saving habit is self.
If we have started saving for corpus then we need to first do the saving in long term secured fixed option were we will get assured returns on the investment. Rest can be invested in medium secured and risk investment option.
Many of us are not able to spare time for micro planning of social security & financial freedom. Meanwhile we can do the basic planning and can start saving and investing funds to become financially free.