For many reasons that I don’t have time to elaborate on, I have been thinking more and more about financial security. Part of it is my determination to diversify my income streams, but that is only the tip of the iceberg. Despite the complexity of my situation, there are many obvious reasons why someone would think about and want financial security. The ability to sleep at night without worrying about paying for this or that. The ability to work when you want or follow your dreams.
Financial security should be everyone’s goal. Yet, not everyone is able to achieve it as easily as others. Some struggle with controlling their spending, while others make just enough to make ends meet (which becomes even more difficult without a pay increase each year). Yet, I don’t think it’s impossible. I am obligated to think that anyone can achieve financial security or freedom with enough determination and hard work. It has to be possible, otherwise everyone should just give up now. Below are the steps that everyone must take to achieve financial security.
1. Stop living Paycheck to Paycheck
One of the first things that is necessary is to stop living paycheck to paycheck. You may think it’s okay to enjoy yourself with every penny of your hard-earned money, but it’s not sustainable. In order to get ahead, you have to save at least a part of your money so that you can eventually pay next months expenses with this month’s income. Heck, it should be everyone’s goal to have an emergency fund to avoid having to take out short-term loans (like the ones you can get from www.cashloans.co.uk). Prioritizing spending and avoiding short-term fixes will help you avoid cyclical poverty. As the Wall Street Journal reports, more and more people are using these type of loans for everyday expenses, suggesting to me that it becomes all too natural once you do it once.
2. Invest Money NOW
After you have mastered spending less than you earn, the next thing to do is to put your money to good use. Don’t let your money sit around not doing anything useful. While you should keep a little bit for emergencies, start investing the rest. Do it regularly (to perform what people often call dollar cost averaging) and aggressively. The more money that you have earning a positive return, the faster you will achieve financial freedom. Do you want to wait until you can’t move around to have peace of mind?
3. Increase and Diversify Income
While not absolutely necessary, increasing and diversifying your income will speed up the process. The math is simple. Do you think it is easier for someone making $100,000 each year or $50,000 each year to achieve financial freedom. With more money, you can speed up the process. If you think it is impossible for you to earn more money at your day job, maybe it’s time to start looking for a side business or new job. While you don’t have to sell your soul or get rid of all of your free time, adding extra income to the mix can do wonders to putting you ahead of your peers.
While it’s not as simple as a three step process because it takes a lot of hard work, determination, and resilience, these are the basic steps to achieve financial security. Working towards financial freedom can make the world of a difference and give you many more options. Don’t delay – make a sacrifice today and start working towards your future.