Ever wonder if the Financially Free know something you don’t? If you think there’s a secret to Financial Freedom, you’re only partially right. You do need to know a few basic things to get started, and they’re not secrets!
Yes, there are many Money Myths perpetuated by well-meaning mentors—and not-so-well-meaning banks!—but the truth is out there and available. And you’ve probably even heard or read the right advice more than once from different sources. Unfortunately, just knowing what you need to do to get on the path to Financial Freedom isn’t enough. The Financially Free also take action.
So what do the Financially Free not only know, but also do?
#1 They Get Started
The sooner you’re Financially Fit, the sooner you can start investing. And the faster you’ll reach Financial Freedom. Because the more you invest, the more compound interest works for you. Even if you’re getting started late, you can still reach Financial Freedom, so there’s no reason to be discouraged. You’re never too young or too old! But even a small increase in time and money makes a huge difference in the long run.
#2 They Live On What Remains
The Financially Free know that keeping your commitment to Live On What Remains is important regardless of where you are on your journey to Financial Freedom. Of course, the Financially Free have the option to spend on wants and luxuries—as do you. But they know those wants and luxuries can’t exceed what they’ve planned for in their monthly spend. The most important thing is to Live On What Remains, even when your means are significant!
#3 They Don’t Have Credit Card Debt
How much money do you give away each month to banks? When you pay interest on credit cards, giving away money is exactly what you’re doing. Using a credit card in and of itself isn’t wrong. But if you’re not able to pay off the amount in full each month and Pay Yourself First, you should not be using one. Of course, if you’re living within your means, you won’t accumulate credit card debt. And you won’t throw money away on interest. The Financially Free know that compound interest works both ways, and the amount of money you owe in addition to a loan can grow very quickly!
#4 They Diversify Investments
Remember that when investing, your goal is to achieve Financial Freedom—NOT a high net worth. So choose your investments with not only Financial Freedom in mind, but also with the knowledge that no investment will give a good return all the time. Investing in different types of opportunities limits the effect on your long-term plan should anything happen to that investment. You must buy different types of investments in order to spread the risk around.
Now you know. What will your first step be?
image credit: Bigstock/Maridav
Erin is the managing editor of MindShift.money and the owner of Lane Change Media. As a business owner and content provider, she takes her personal motto, “Don’t slow down, just change lanes” seriously. She lives in Los Angeles and has far too many pets.