In this article, we discuss 7 Tips To Lead You To Financial Freedom.
Regardless of where we are in life we can all learn something about money and how to better prepare for our future. Especially when we see that the national average is $10,000 in credit card debt and that savings and preparedness is dropping. This article can put you back on track to a more fulfilling and financially free life.
1) Invest in Yourself
If you currently are working a 9 to 5 the best thing you can do to become financially free is to invest in yourself. This includes books, seminars, podcasts, YouTube, courses anything you can get your hands on to increase your knowledge on the topics of self-development and starting your own business. To be financially free within a short amount of time to actually enjoy it, you have to control how much money you make and it must be unlinked from your time. You cannot do this with a job.
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2) Real Estate
If you haven’t already, buy a house. Renting will only make your landlord (hint – house owner) rich. Regardless of what the immediate market does real estate is one of the best long term investments you can make. It also has many advantages including deductions for mortgage interest. Real estate will always go up. People will always need a roof over their head. Just watch HGTV, real estate has made many millionaires and is a key factor in almost every tape and book series on gaining wealth.
Multifamily real estate is also good to own over the long-term and can cash flow more than single family houses. You can start small with a duplex, triplex, or a quadplex and scale up from there. Look at each property you own as its own cash flowing asset.
3) Medical and Life Insurance
You need to have them, if you think you don’t just ask anyone that didn’t have it when something unexpected happened. If you love your family, they are a must. But, on that note, don’t get taken. Look up term life insurance. 20 years will give good term coverage and if you follow all of these tips you won’t need anything beyond that. Whole life only makes your agent rich and really never builds any value for the huge costs involved. Term life can be purchased cheap over the internet at great savings. For medical insurance, in most states Blue Cross and Blue Shield offer great plans that are a fraction of Cobra or employer plans. If you have an adequate employer plan, by all means use it. Stick with big names like Blue Cross as they will be around for years.
4) Don’t Ever Buy New Cars
It is a fact that new cars lose 25-30% of their value the moment you drive it off the lot. Let someone else pay for that depreciation and get a two or three year old car or truck. With the latest technological advances cars can easily go 150,000 miles and above. A two or three year old vehicle with 30,000 miles on it will save you not only in initial cost, but also on your insurance, and taxes. Also do your homework before buying your car. Get your credit score and see what loans you qualify for. This can easily be done right off the internet and will save you big at your local dealer (never take a dealers word for your credit and rate – they will hold 1-3 points on rate and that can mean thousands in extra interest over the term of the loan). If you can, get a loan through a credit union the rates are usually lower.
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5) Get Out of Debt
I put the investment tips above this as you need to pay yourself first. If you are overwhelmed with debt, their are numerous non-for-profit agencies that will renegotiate your debt and terms on your behalf. Work out a plan to get the high interest debt paid off. Be wiser with your purchases – do you really need that 60 inch flat screen tv? a BMW you cannot afford? etc… Cut up all cards but 1 (for emergencies you should have 1 credit card) and no store cards. The whole purpose behind store cards is to entice you to buy more and pay more. My grandfather said it best – “if you can’t afford it, don’t buy it.” The only good loan to have is a mortgage.
On the flip side, if you are into cars always buy cars the right way. This means having cash flowing assets that more than cover the liability of a car. For example, let’s say you decide to finance a Mercedes-Benz S550 and your monthly note is $800. The smart thing to do is use the income you pay yourself from your business or real estate property to pay the note, insurance, and any other expense for the car. Most people go about it backwards and use the money from their job to pay for it.
6) Never Burn Bridges
If you happen to leave your current employer, leave on good terms. This will put you in a good light with your former management and can result in a good reference, another job, a callback for more money, etc… Never leave on bad terms. It’s just not good karma. Also, it won’t hurt to take former business associates and customers to lunch regularly. This will keep you in tune to the industry, and give you many additional contacts who can grant you future favors – just think of the lobbyists on Capital Hill, you don’t think they spend all that money on their politicians for nothing do you? Don’t be afraid to ask for a favor every once in a while. Karma is the big rule here, when you help others you will inadvertently help yourself.
7) Give Back
Once you’ve made it it is only fair that you help others less fortunate than yourself. Regardless of your beliefs when you donate time and money to help others you will inadvertently help yourself. You will feel great. Also, the cardinal rule of karma is that when you give you will get many more times what you give back. Take the time to help by volunteering your time. Even if it is 1 hour a week, you will help improve someone else’s life. Volunteer, it will make you a better person.
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