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| Building Wealth and Achieving Your Dreams |
"Discover the secrets to building wealth and achieving financial freedom with these 10 actionable tips! 💰💪 #wealthbuilding #financialfreedom"
Building wealth is a long-term process that requires discipline, patience, and a commitment to taking action toward your financial goals. Whether you're just starting out on your wealth-building journey or you're looking to accelerate your progress, there are many strategies and tips you can use to build wealth over time. In this article, we'll cover 10 actionable tips for building wealth that can help you get started on the right track.
What is financial freedom?
It is the result of a series of decisions that allow you to enjoy life with a healthy economy. It is the economic condition that allows you to achieve your goals, maintaining your quality of life along the way, explains the management consultant ALTAG, representative of the Harvard Business Review magazine in Latin America.
To achieve this freedom, you need:
• Motivation.
• Strategy.
• Preparation.
• Discipline.
For this, there are 3 qualities that you must cultivate:
• Determination of your objective.
• Knowledge of your finances.
• Moderation in your consumption.
Developing these attributes implies that you need to perform some actions that, perhaps, you had not considered before and we present below.
10 best actions to achieve financial freedom
1. Create a budget
Keep in mind that this is the planning of your finances, so when preparing it you must record all your income and your expenses in a certain time.
When you prepare your personal budget, do it month by month and include:
• Salary and any type of income received.
• Expenses for fixed payments (rent, services, food, transportation, Internet).
• Recurring expenses (insurance payment).
• Leisure and entertainment.
• Debt payment.
• Saving Fund.
• Percentage allocated to investments.
In addition, now taking care of your budget is easier than ever, thanks to the advancement of financial technology developed by ventures known as fintech.
Although personal finance management apps were viewed with some suspicion in the past, today they are popular and trusted tools.
In fact, according to the Digital Economy site, for this 2019 the development of the fintech ecosystem presents 3 trends :
• automated savings.
• Fintech anti-fraud.
• Finance management by voice.
2. Pay off your debts
It is a practice that cannot be missing for you to live with peace of mind and be truly financially independent, because in the long run even small debts, poorly cared for, become a burden.
We recommend you follow these 6 tips to quickly get out of debt proposed by Forbes business magazine:
• Buy only what you can (avoid the famous interest-free months).
• Avoid using credit cards.
• Allocate a percentage of your budget to cover these earrings (experts recommend that it not exceed 30%).
• Organize your debts, identifying which ones charge you the lowest interest and which ones the highest.
• If you have several credit cards, find out if there is a possibility of collecting all the earrings in plastic (the one that charges you less interest).
• Start by paying the easiest debt and cover the others as you progress in your payments.
3. Get used to saving
You must get into the habit of saving from the moment you start working. And it is not so much the quantity that matters as the continuity.
Also, set goals to further motivate savings, such as renting an apartment or taking a trip.
4. Invest a part of your income
Investing is putting a part of your money to work so that it can multiply. Depending on your risk tolerance, you can choose between various investment instruments.
In this case, the keyword is to diversify because you multiply your chances of generating profits by putting "your eggs in different baskets" and you reduce the possibility of losing all your capital if an instrument performs badly.
The financial coach AgustÃn Grau recommends 5 investment instruments for you to diversify:
1. Properties (land, houses, apartments).
2. Stock market (stock market shares).
3. Startups (emerging companies).
4. Shared financing platforms (crowdlending and crowdfunding).
5. Financial products (time deposits, mutual funds, APV, bonds, stocks)
5. Diversify your income streams
Just as it is good to diversify your investments, it is very positive to have alternative sources of income.
Among the ways to generate extra income is to offer a property for rent and capitalize on activities that give you pleasure such as cooking or walking dogs, for example.
6. Take an interest in the behavior of finances
The health of your personal finances is in your hands. So get inspired by following financial education blogs like this one and lose your shame when it comes to talking about money issues.
In addition, on the Internet, you will find online media and sites specialized in economic news that you can consult and add to your daily reading routine.
7. Consume wisely
At the beginning of this blog, we mentioned that a quality of a financially free person is moderation. With that, we mean that you forge a criterion when choosing a product or experience to consume.
Define what you want and what you need to live. It's not that you lead a life of deprivation, but do you really need that franchise coffee every morning? Why don't you prepare it at home?
According to Vice magazine, only 15% of the purchases we make are truly rational, so you must take steps to avoid succumbing to temptations that, although they seem to offer immediate pleasure, end up making you reach the end of the month in zero.
8. Feed an emergency fund
Just as there are expenses that you can foresee, there are others that are impossible to take into account, such as those that arise as a result of accidents, illnesses, breakdowns at home, unexpected trips, and anything yo,u cannot imagine, but that could happen.
For these cases, it is good to have an emergency fund, which is not the same as the savings fund that we mentioned above since it is money that is not labeled for any specific purpose, but that you have available in case you need it urgently.
9. Learn to get out of financial crises
On the other hand, in addition to emergencies, there are external factors that can put your personal finances in crisis and, as a consequence, your financial freedom.
These same actions are a solid base for you to face a personal financial crisis, in addition to:
• Take responsibility for your actions.
• Be flexible to change strategy if necessary.
10. Dare to undertake
Once you manage to develop these good practices, it is the ideal time for you to start your own business.
Keep in mind that every good idea requires:
• A business plan.
• Partners and allies.
• Flexibility.
• Inexpensive mattress.
Conclusion
To achieve a full life, in which economic worries do not alter your day-to-day and you can have your time, you must develop good habits.
These practices include improving your financial education, saving, spending moderately, investing your money, and making wise decisions about your budget.
Remember that no one is born knowing. That is why we advise you to prepare and feed your goals with discipline, planning, and common sense.