Financial freedom is different for everyone, but it is a quantifiable metric that measures passive income over living expenses. If you can accumulate enough money through your own business or assets, you will achieve financial freedom. For example, if your expenses exceed your income, you will not be forced to work as an employee anymore. The Barefoot Investor defines financial freedom as the ability to generate a passive income (income from assets rather than work) that exceeds spending, allowing you to live the life of your dreams. While it’s difficult to define for each person, the objective is to have passive money that exceeds spending. Once you’ve completed your degree and entered the professional world, you’ll realize that a degree, following the Barefoot Investor, and a decent paystub aren’t enough to reach financial freedom. You can live in the neighborhood of your dreams, without getting out of bed every morning to work. You can travel to exotic locales without having to get up early. The ability to afford the house of your dreams, live in the neighborhood of your dreams, and tick off items on your travel bucket list without working days is a good example.
Financial abundance is one of the most desired but also one of the most elusive goals. It is easy to see why: the financial difficulties that many people face today can make it seem like a far-off dream at best, and a near-impossible goal at worst. Even if you don’t have trouble saving money in your budget right now, chances are that in the future you will. Even if you’re not sure how much money you’ll need in the future as an adult, it is almost guaranteed that you’ll need more money than you do right now as a kid. Financial Abundance is something that we all want but doesn’t necessarily know how to get. To help you reach Financial Abundance, here are our top 5 tips on how to build wealth and abundance from scratch.
Create an Income Stream
If you want to build wealth, you need an income. The key is to find a way to earn money consistently so that you don’t have to work several jobs to get by. If you can establish an income stream—such as a side hustle, a part-time job, or an online business—then you can stop chasing down that elusive dream of financial abundance. If you build an income stream first, building wealth will be a lot simpler. You don’t have to worry about saving enough for retirement, saving for a house, or paying off your student loans. As soon as you start earning money consistently, all of those things become moot. With an income stream, you can focus on living well and building wealth.
Invest your money
When you have extra money, why not invest it? When you put money into a high-quality investment, the money will earn you a return. There is no guarantee that the return will be high, but the risk is also very low. There are a lot of ways to invest your money: through a self-directed brokerage account, a self-directed IRA, a 401k, a Roth IRA, or a regular IRA. Whatever method you use, it is important that you choose high-quality investments.
Pay off your Debt
If you have any debt, it is essential that you try to pay it off as soon as possible. If you have any debt, it will drastically and negatively affect your financial health. Now is the best time to try to pay off your debt because interest rates are very low right now. Paying off your debt early can have many benefits. Not only will you save a lot of interest, but you will also gain another layer of security in the form of a larger positive balance on your credit report.
Protect your assets
There is nothing more vital than protecting your assets. If you don’t protect your assets, then you will never have financial abundance. It doesn’t matter if you have an income stream if you have a giant debt load, or if you have a small savings account. If someone steals your income stream or your savings, then you’re not going to be able to reach financial abundance. This is a very real and serious threat that many people overlook.
Live below your means
If you want to reach financial abundance, you need to try to live below your means. The first step in reaching financial abundance is to put your money to work. Once you start earning money, you need to try to live below your means.
Building wealth and reaching financial abundance is possible, but it doesn’t happen automatically. It’s something that you have to work towards every day. However, building wealth and reaching financial abundance is possible. All it takes is a little bit of research, a little bit of patience, and a lot of hard work. Financial abundance doesn’t have to be something that is far off in the future. It can also be something that you work towards every day. It just takes a little bit of patience and a lot of hard work. By following the above tips in this article, you will be closer to accomplishing the financial freedom you deserve. Thus, take a look at those finances, build extra streams of income, and pay down that debt.