How to move from a job security to financial freedom.
It’s a common dream for many people, especially the younger generation. The ability to quit their job, build a profitable business and live the rest of their lives spending their time as they please. Depending on who you ask, people will say that financial freedom comes from investing in stocks, making Ksh.1M a month by blogging, flipping websites or selling eBooks on Amazon.
The primary reason many people seek job security is because that is what they are taught to seek, at home and at school. Millions of people continue to follow that advice. This has resulted in many seeking for job security instead of financial freedom.
Many of us have been conditioned from our earliest days to think about job security, rather than financial security or financial freedom. And because most of us learn little to nothing about money at home or at school, it’s only natural that many of us cling even more tightly to the idea of job security……instead of reaching for freedom.
Employment is one source most people rely on to generate income either for transactional or precaution purpose.
Income can be generated in different way, what Economist refers to as Cash-flow quadrants.
There are 4 different types of cash-flow quadrants which can either lead to financial security or freedom path. These quadrants are:
- Employment
- Self-Employment
- Business ownership
- Investments
The main reason why 90% of the population is working on the first two quadrants is simply because that’s the side they learned most in school. They leave school and are soon deeply into in debt that they must cling even tighter to a job, or professional security, just to pay the bills.
Often you will meet young people who recently graduated with either Diplomas or Bachelor’s degree with loans from college or University respectively.
Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them.
The next time a pandemic or recession hits and you miss a monthly paycheck, instead of panic and relying on the government, you’ve got a safety net.
Read>>>5 Unique Ways to Make Money Online
Do you feel that sense of relief? That’s what financial freedom feels like.
Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them.
The path to financial freedom isn’t a get-rich-quick strategy. And financial freedom doesn’t mean that you’re “free” of the responsibility of handling your money well. Quite the opposite. Having complete control over your finances is the fruit of hard work, sacrifice and time. And all of that effort is worth it.
What Does Financial Freedom Mean to You?
Financial freedom has to be personal. Dream big and get specific about your goal.
What does financial freedom look like for you? Maybe it looks something like this:
- Freedom to choose a career you love without worrying about money
- Freedom to take an international trip every year without it straining your budget
- Freedom to pay cash for a new ski boat
- Freedom to respond to the needs of others with outrageous generosity.
- Freedom to retire a whole decade early
When you have financial freedom, you have options. You don’t have to wonder if your bank account can handle replacing your hot water heater or buying groceries for a single mom who just lost her job. See how ordinary people built extraordinary wealth in.
That may sound too good to be true, but you can do this! Here’s how to begin your own journey to financial freedom!
Step #1: Learn How to Manage Money
You won’t get ahead if you don’t have a plan for your money. Instead, you’ll find yourself wondering where your money went at the end of every month! That’s not financial independence—that’s a recipe for financial disaster. If you’re married, get on the same page with your spouse about your budget. If you’re single, find an accountability partner.
Building wealth is impossible if you’re living paycheck to paycheck. Give every dollar a name before the month begins and track your spending throughout the month. If you consistently overspend or underspend in certain areas, you can always adjust the amount in each category.
Budgeting is important to get your finances on the right track, but it doesn’t end there. Even once you achieve financial freedom, you’ll still complete a unique budget every month. No matter how much money you have, you need a plan.
You won’t get to financial freedom on accident. Budgeting is the first step to building wealth on purpose.
Step #2: Clean Up Your Finances
Once you start learning how to manage money, you may realize you’ve made some mistakes with your finances in the past. That’s okay! But if you want to experience financial freedom, you have to clean up the mess before you can start building wealth.
That means if you have debt like credit cards, student loans or car loans, it’s time to get serious about kicking it to the curb.
Why? Because while you owe money, your paychecks have someone else’s name on them. If you want to reach your goal, you need your full income at your disposal, not bits and pieces that are left over after paying credit card bills and student loan payments.
Paying off your debt helps you lay a foundation to build wealth that will last. Make sure you have $1,000 saved before you start tackling your debt. You don’t want an unexpected expense to derail your progress!
Most people feel like they got a raise when they start budgeting, so that’s good news for you. Throw all of that extra cash at your smallest debt until it’s gone. Then keep the snowball rolling! Paying off debt is hard work, but there’s nothing like the feeling of actually keeping the money you bring in every month!
Once you’re debt-free, stay there. For good. Having debt undermines your ability to build wealth and puts your financial plan at risk. It’s simple. Steer clear of debt!
Step #3: Be Smart About Your Career Choice
Your biggest wealth-building tool is your income. So when it comes to choosing a career, there are a lot of things at stake. There’s no reason to stay stuck at a dead-end job, especially if it’s making you miserable. Finding a job you enjoy that also supports your goals of financial security will help you enjoy the journey.
So, what should you look for? Here are a few things to keep in mind:
- Where do you want to be in 10 years? Start with the end in mind. Does this job make sense with your overall goals?
- Is there income-earning potential? Even if you’re not making your dream salary from the start, make sure there’s opportunity for your income to increase as your value increases.
- Can you grow? Are there opportunities for you to move up and grow personally and professionally?
- Do you enjoy the work? Don’t spend a career at a job you hate. Find something you’re passionate about that allows you to use your gifts and skills.
- Do the benefits support your goals of financial freedom? Your options for retirement savings and health insurance can dramatically affect your ability to build wealth.
Your choice of career can have a big impact on your long-term financial plan, so take it seriously!
Financial freedom is about more than just being able to cover unexpected emergencies—like a car repair—without breaking a sweat. The fun really starts when you realize you can meet the needs of others. Imagine being able to bless a struggling family by paying for their car repair! It’s not just about you anymore—it’s about leaving a legacy!
If you live like no one else, later you can live and give like no one else. It’s worth all the hard work it takes to get there. You’ve got this!
Also Read:Top 10 highest paid CEO’s in Kenya
