Financial independence is a state where you will no longer have any necessity to work. Lots of planning and execution will be required to attain the state of financial independence. Some people will have lots of money but no plans to do with the money. Some people will have lots of plans to execute but lack of money. Financial independence is a state where you no longer have to worry about money and start chasing your dreams. This state can be attained if you have a proper source of passive income. Passive income gives good financial stability thus making you spend enough time with your family and friends instead of spending time running behind money. Running behind money can have lots of other complications as well where you will end up losing your health looking out for money and with the same money that you earned with hard work, you might have to get your health back to form.
Saving early and saving enough
Financial stability can be attained if you start thinking about saving the money that you earn. Many people have the habit of spending all the money they earn. They live with an ideology thinking that their current cash flow will always be permanent. The money that we earn today is not permanent for us unless we do the hardworking and planning to keep the flow going. If we stop doing the hard work the current money flow might stop some day. From the day one, saving a part of the money that you earn is very important. This is not just for your safety but it will also help in providing good financial stability in the future.
The habit of saving should start from a very young age. You have to decide how much of your earning will go to the savings. Once it reaches the savings account, it should not be disturbed by any cause. Not touching the money from your savings is a discipline that everyone should learn. It is quite obvious that when there is a financial need, everyone will look forward to making use of the money they kept in the savings. The money in the savings should only be utilized if there is a dire emergency. For all the sophistication needs, other sources of income should be an option. When I say another source of income, it could be a bonus or incentive from our work. If you are fully in the savings mode, you can cut down your sophistication needs.
Next important point is to save enough money for your future. Before you start saving money, you have to first decide how much will be your requirement to attain financial independence. This is definitely variable but you can initially set a target and rework on it. But you have to make sure the need is not taken over by your greed. Need can have a cure but greed cannot be cured. If your saving frequency is faster, you should be able to attain financial independence sooner. The savings should also be in such a way that you invest in something and look forward to getting some passive income from the investment. Saving should not be something like your money just simply sleeping in a locker in your house or in a bank.
Financial independence target
The target for financial independence varies from one person to another based on every individual’s need. For some people, the need might look very less before marriage but after marriage, they will end up doing lots of expenses. This will increase the bandwidth. For some people, after they get kids, their financial need will increase furthermore. If there is no proper planning and all the money that you have been saving for years are just sleeping inside your house, it will not be of any help to you. Multiplying the current savings should also be considered as an option in attaining the financial independence target. The target will be considered as reached only when you get consistent passive income to satisfy your financial needs without having any necessity to work further.
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