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Nine Steps Towards Financial Freedom
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Academic intelligence does not guarantee financial intelligence. Where the basic knowledge of the nature of money is lacking, money will come slowly and leave quickly. There is a time to work for money and a time for money to work for you. The trick to financial success is not learnt in theory or taught in school.

Anyone actively involved in making money must plan for a day when retirement will be inevitable. Every employee will one day leave their job whether they are ready to do so or not. Financial freedom is the one thing that can make one think of approaching retirement without entertaining fear for the future. Passive income is the only thing that takes care of your expenses even when you are sleeping.

Financial freedom is possible if it is your goal. Discipline, planning and sacrifices will get you there. There are steps you need to take to achieve this. Though it might seem difficult at first, determination is the key. Remember that there are people who have made it work for them. If they can do it you can do better. It is always as easy as you make it.

Step one: do a financial audit: this will let you know what you spend money on and how much you spend on those things daily, weekly, monthly and yearly. List out all the needs and wants that make up you expenditure. This lists all your liabilities, personal or otherwise.

Step two: list your sources of income and assets. What are the things that put money in my pocket? How many income streams do I have? How many are passive income(income earned without being actively involved; e.g. dividend from shares, other paper investment, real estate, royalty from intellectual property etc), and how many are active income (income earned by being actively involved e.g. own business).

Step three: do a current snapshot. What does the expense, asset, income and liability column say? Do I earn more than I spend? Does my expense exceed my income? What is my monthly cash flow? Do I have more liabilities than my assets can take care of? Where do I stand now? Do I depend on others to meet my financial needs? Do I have to borrow from future (expected) income to spend for today?

Step four: set your goal. The above exercise will be useless without a definite goal in mind. Where do I want to be in one, two or five years' time? Do I desire financial independence that leads to financial freedom? Decide. If answer is yes, ask: when? How do I want to get there?

Step five: make a financial plan with your goal in mind. Make a budget for every spending. Postpone any expense you did not bargain for. Learn to say no to friends and family members if it is not planned for. Let sudden expenses wait till it can find a place in the budget. This is where discipline is needed. Remember, failure to follow through with your plan and stick to your budget will make a mere wish of your goal.

Step six: reduce your expenses. If your expenses exceed your income you are simply eating away the future. That doesn't make the future very bright. Reduction in your expenses will leave money for savings and ultimately investment. Do itslowly if you have to. A dollar reduction on the debit side is not too bad to start with.

Separate needs from wants. Do away with things that are not absolutely necessary.

Step seven: increase your income streams. Remember making money is like driving a car. Think of your financial life as a car; it needs four tires to move. You would not want to drive a car without a spare tire if you intend to go far. Having one income stream is a no no. Look for ways and opportunities to increase your income and build your assets. Sell- create, add value, offer services. Sell something. Identify a need and fill it. If you work in an office, the better for you. Your colleagues and neighbors will appreciate value added services. Whatever good or service on offer in your immediate environment can be repackaged and offered in a better way. Offer discounts and bonuses for reference sales and watch your enterprise grow.

Step eight: save and invest. So long as you make money its first duty should be to multiply itself. Never leave money lying in the bank if you can invest it. Avoid the temptation to spend money meant for investment in assisting friend or family. Money meant for investment is not yours. Not now anyway. It may be your children’s future. Open a fixed deposit or an account that you don't have access to at will. Beware of ATM cards; it is easy to get to your money with one. Make your money work for you before you let go. Invest in different areas. Even as you get returns from investment keep at least ten percent (it might take some time to get there, start from somewhere) aside for yourself and family before you pay bills and fees. Then re-invest. Learn to spend only the cash that has worked (at least once) for you. This may be challenging at first, but as you get returns from investments it will gradually become second nature.

Look for avenues to earn passive income. This is what can guarantee you financial freedom, which is when your passive income exceeds your expenses.

Step nine: invest in yourself. Knowledge you don't have can not be a potential power for you. Read and learn. Always be on the look out for tools that will increase your financial intelligence.

Lastly make use of the knowledge to really have the power.

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