The first step to achieving financial freedom is to get out of debt. Until you clear your debts, especially the ones that have high interest rates you are on the line and are in debt to someone or some organization. For me being in debt gives me an uneasy feeling of no security. The feeling of being in debt to others limits my choices and greatly influences my choices. If I have a mortgage on my house and I stop making payments the loan provider will come knocking and take the house away. They will not hesitate foreclosing on me and auctioning the house out to the next buyer. I am forced to continue paying the mortgage or else I will lose the stability of my shelter, so I am going to work in order to keep up with my obligations and live a stable life. The goal of getting out of debt is to have a positive cash flow or increase your cash flow.
The next step is to start saving your money for the future. When you start to get out of debt you will see your cash flow start to increase. Having more money is your bank account is a great achievement. This extra money is great to have and you might be tempted to treat yourself, by buying something nice. However please think twice and refrain from instant gratification purchases. Like I mentioned earlier, life is full of unexpected events and having money saved for a rainy day will help you when you are faced with an unexpected bill such as a medical bill, car or house repair.
Now that you have some extra money saved and are crawling out of debt. You can begin to focus on building your credit more successfully. It is important to remember to use your credit for making purchases or acquire things that will be beneficial to you in the long term. It should not be used to buy a new fur coat or luxury item that you will regret purchasing sometime afterwards because the money could have been used in a better way.
Truly you will have more options and opportunities in your life due to your financial health. You may decide that you should invest your money and have your money earn you more money. Remember that money is important in life but it’s not the most important part. Money is a resource which we use to acquire other products and services to improve the quality of our and our loved ones lives.
Although investing your money could be viewed as a risk or liability and goes against the principle of getting out of debt if you invest in a big item such as a car or a house. Many times risk brings benefits and rewards in life. A car once drove off the lot depreciates in value rapidly, compared to a house which might appreciate in value over time. Although these items can be viewed as risks they allows us to have a roof over our head and a place to be safe and a place to eat and lay our heads. A car can also help us get around, travel with our family or on our daily commute to work. These two items also bring expenses with them overtime such as insurance, taxes and repairs. Having your money in a savings account is not as risky as other investments with no extra cost and little reduction in value. Many people don’t realize it, even having money in a savings account or hiding it under the mattresses is losing value because of inflation. So smart investors invest their money in order to maintain their wealth and grow their wealth over time. There are many investment vehicles and we will go over that when we analyze all the different classes of investments.
Finally we will talk about achieving financial wealth and freedom. We will look over the benefits of having the resource of money in our lives to help us improve the quality of it. Many people say that money can’t buy happiness and that might be true for some but for me money can buy products or services which will bring happiness into my life. The green dollar bills will not bring me happiness, it’s just a paper but the value of it, along with the things I can do with this resource will bring me more opportunities and help me get more experiences from my life here on earth.
Most of the topics I will cover are not taught to us by the school system because having uneducated people making poor choices and decisions is more profitable for big corporations and firms. Also if people were more smarter in using their money the more they would be able to save and the less they would be giving to the big corporations. After these readings you will have a better understanding about financial literacy and the benefits of having knowledge and wisdom so that you can apply it in your life.
Once you become more informed and in control of your finances you can begin to help others take the proper necessary steps to do the same for themselves. Having more control over your finances and getting out of debt can open the doors to more opportunities in your life. Becoming an entrepreneur or traveling the world to new places and helping others by donating to charities or volunteering your time for organizations to help people less fortunate, providing others with what you are passionate about.
No comments:
Post a Comment