Most of the time when we talk about being financially free, the focus is trying to make as money as possible, often as quickly as you can so you can get on with the things you enjoy rather than work. However here’s the thing – what does it mean to be free? We have created incredibly complicated and expensive lives and for some people, there is no light at the end of the tunnel. Is freedom working your backside off for 40 years to pay off a mortgage and then have enough for a bit of travel?
Everyone wants it, and it’s possibly cheaper than you think – sometimes.
The quest for financial freedom is as old as modern society – and more accessible and achievable for most today than ever. The fastest way to be financially free is to create a life that’s less expensive. Avoid the big cities, don’t worry about nice new shiny things, and focus on what you need to be happy. You might be surprised that it’s less than you think.
Once you understand that, work out how much it will all cost – the house, the life, the adventure and travel. Can you save for it? If you can, great – get cracking. However, you’ll find that often, saving for it is a slow process. While you’re saving, it’s getting more expensive, so sometimes, you’re just keeping up rather than getting ahead.
Here are some ways to supercharge your efforts:
Save as much as you can
But, still spend and be happy. Saving just for the sake of it isn’t much fun – but if you have a clear goal I mind and you genuinely feel that your efforts are creating the future you want, then the sacrifice can often feel worth it. Cut out anything that doesn’t bring you value. Marie Condo for spending maybe? If it doesn’t bring you joy – then why would you buy it?
~Novel Serialisation: Heavens Fire~
Develop additional income streams
There are so many ways to create income streams these days, it’s really not that hard to generate even just a few thousand per year. A side hustle is the easiest, but you’re trading time for money which has it’s limit. Think e-commerce, think leverage and scalability. You can save the extra money, use it to invest or enjoy it. If you do a good job here, you’ll be able to continue earning your extra money forever and it will supplement your early retirement
Invest
Einstein once said compounding is the 8th wonder of the world. He was onto something here. Invest when you can – keep it sensible, and focus on a mix of sensible good long term investment with maybe a few fun investments. But keep most of it solid so it’s reliable and there for you when you need it. This too will provide a passive income stream for your future.
Understand risk
You can’t invest without risk. You can’t develop a business without risk. Understand your risks and do what you can to mitigate them. If you’re investing aggressively, don’t invest the money you need in the near term, make sure you have a long time frame to work with. That way, you’re not going to forced to sell as the worst possible time.
Being financially free isn’t rocket science, but we often get terribly distracted in life and find ourselves in a very different place, what types of things have you done, or seen other do, that you feel are taking them off track? Stay focused, work out what you and if you can’t find a way to make the numbers add up, get some professional help from a specialist financial adviser.
By Brenton Tong
Brenton Tong is the Managing Director of Financial Spectrum. Consistently ranked one of Sydney’s top financial planners (Adviser Ratings), Brenton believes strongly in separating advice from commissions and instead focuses on delivering genuine value to clients. Brenton is a Senior Associate Member of the Financial Services Institute of Australia, a Practitioner Member of the Association of Financial Advisers and a member of the Association of Independent Financial Professionals. In addition, Brenton is founding director of one of Australia’s fastest growing dealer groups, Climb Wealth, and an accredited trainer for financial planners.
