Journey To Financial Independence and Freedom; Know The Basics
April is Financial Literacy Month and “The Improving Financial Awareness and Financial Literacy Movement in Ghana” has been launched to help create massive financial awareness and financial literacy education. Join the movement and help touch everyone and every household in Ghana at least twice a year.
Click the link below to read more; http://www.thefinancialawarenessfoundation.org/pdf/TFAF-Ghana-JoinTheMovement-PersonalFinKnowledge.pdf
Now back to the article;
We all want to earn more money with greater speed and less effort. We are eagerly looking for the shortest way to financial freedom. But there’s always a starting point.
In one of my financial literacy and education talks, a participant asked me to expound on some basics financial decisions. “Hello Sir, you have really inspire us today. My question is journey to financial freedom; what are some of the basics?” He asked.
There are plenty of people willing to advise you on how to earn more money and achieve financial freedom. Most of this “advice” focuses on exciting tactics to generate big returns with little risk and time invested.
Sadly, a lot of this advice is bad. It’s not based on sound financial principles. And it’s too often marketed with numbers that have been manipulated to mask fees and inflate returns.
Fortunately, not all of the advice out there is bad. There are smart ways to reliably accrue wealth over the long term. And if you’re smart, you’re in it for the long-term.
Here are some basics sound financial principles that you can adopt to guide your financial journey:
1. Invest in yourself.
“The best money or financial advice anybody should give you is to educate yourself financially —invest in yourself.”
The more value you add to the world, the more money you will make. And to add more value, you need to invest in yourself. Read and learn daily, develop new skills, focus on your physical and mental health, build your network, and so on. These investments will pay off tremendously. Start by reading 10 minutes per day. At that pace, you’ll read 20 books a year. Start today.
2. Leverage compound interest
Einstein once called compound interest one of the world’s most important inventions. Why? Because it’s super powerful. ¢5000 to ¢10,000 invested in a low-cost index fund in your early 20s will be worth hundreds of thousands by the time you retire. Begin a regular savings program as early as possible and compounding will do the rest.
3. Automate and simplify
Most people want to minimize time spent on their finances to increase time spent elsewhere. Take the time to create a simple, automated investment strategy. For example, if you earn ¢1000 per month, you might allocate ¢100 to your 401(k), ¢100 to your stock investments, ¢50 to fund your vacation, and the rest towards monthly expenditures. The important thing is to set up the infrastructure that is automatic and that works for you. That way, you know that you are hitting your goals and don’t have to think about it.
4. Create flexibility
Having a flexible lifestyle enables you to more easily thrive through the inevitable financial circumstances of life. Learn to live with less. Have multiple sources of income. Create a lifestyle where you can move anywhere on demand. With this flexibility, you can comfortably navigate your unique and evolving financial landscape with greater ease.
“Don’t rush the process, trust the process.”
No matter your level of wealth, financial stress will always be there. Whether your concern is about making rent or contributing your capital to the best charitable organizations, everyone wants to allocate their money effectively. So do your best to do that, but also relax. Enjoy life while you have the opportunity to do so.
The truth is that good personal finance advice is not exciting or sexy. But that’s okay.
So invest the time in understanding and practicing the core set of simple, but sound financial principles. And then rest easy, and spend your time in the areas of life that excite you the most! You don’t need to rush the financial freedom journey. One step at a time, multiple moves.
Article by Peter Kwadwo Asare Nyarko