4 Steps to Your Financial Freedom.

As the Pandemic rages around the world, people are struggling financially. With the emergence of Omicron at a crucial time when many businesses were expecting a boom after last year’s lockdowns, our money problems are highlighted more than ever.

Christmas is financially burdensome. Many of us spend far more than we can afford. When it is over, we enter the most depressing time of the year, cold, fed up and broke.

It doesn’t have to be this way. We all have the potential to achieve financial freedom and be able to spend more of our time on the things we love instead of working until we drop.

I have been poor, on benefits and living from paycheck to paycheck. Now I have complete freedom. I can enjoy a meal at a restaurant without worrying about the price. I can buy presents for my loved ones and afford to be generous. Most importantly, if an unexpected disaster struck tomorrow, I would be financially secure.

I want to stress that this article consists of what works for me and should not replace the advice of a professional who knows your circumstances.

1. Pay Yourself First.

Investing should be your priority every single month. For me, this is the essential item on the list.

I kept my money in a savings account for a long time. I believed this was the safest way to save money and gain moderate interest. I wish I had done things differently.

Firstly, a savings account is not safe. It loses value due to inflation. You might feel comfortable with a savings account, but I have written many times about how the Comfort Zone is a killer of hopes and dreams, and that analysis applies here.

Secondly, the Return on Investment for these savings accounts is ludicrous. Chances are, you will not make enough to cover the inflation cost.

For me, my life changed when I invested in the Stock Market. I invested through my bank, so there is no fear of being tricked, and I felt most comfortable investing in a Mutual Fund. A Mutual Fund is a pool of money from many different investors, managed by a professional and invested in various instruments such as stocks and bonds.

The percentage of investment in stocks and bonds depends on your risk tolerance. I want high returns and can tolerate the increased risk, so the Mutual Fund I have invested in focuses mainly on stocks from established companies.

I feel comfortable knowing an expert manages my money, but this is just a personal preference. It enables a complete beginner to start investing immediately.

When you invest, think long term. Time in the market beats timing the market. I plan to hold my investments for at least 20 years.

Recently, even though the stock market has been erratic due to Covid, I have made £4,000. If my money were in a savings account, I would have been lucky to gain 100th of that.

2. Change Your Attitude.

As always, we have to work on our inner selves first. If you do not have the right attitude towards money, you could make a million pounds tomorrow and soon be broke again. There are many examples of wealthy people throwing their money away.

Instead of seeing money as a way to buy the next big shiny toy, look at it as a way to achieve freedom. Once you separate your time from your money through multiple income streams and passive income, you are indeed free from the treadmill of the wage slave.

It may surprise you to know that most millionaires do not inherit their money but are self-made, living relatively frugal lives:

“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”

― Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.

You have to stop hating rich people and instead learn from them. Aspire to be rich yourself. It is hard, but everything worth having in life is hard. The first step is believing you are capable and worthy of a free life.

My parents raised me to be suspicious of wealthy people. I saw them as “the other”, as different to us.

Most importantly, I saw rich people as lazy. I thought they spent each day sitting around in the lap of luxury.

How could I be rich myself when I had these negative beliefs?

The secret to escaping this negativity is education. The following books changed my life:

The Millionaire Next Door.

The Psychology of Money.

Think and Grow Rich.

Your Money or Your Life.

After reading these books, you will not feel the same way about wealth as you do now. Instead, you will have an attitude receptive to the kind of freedom you deserve.

3. Stop Using Consumer Goods to Buy Happiness.

When I was in the midst of depression, I would buy things to make me feel better, culminating in a very expensive BMW.

The problem? I don’t even like cars. I bought it hoping other people would be impressed. I could then see myself as successful, and maybe I could beat my depression.

None of these ideal scenarios occurred. I lost interest in the car as soon as it arrived and regretted wasting so much money.

On other occasions, I have bought excessive amounts of luxury bed linen and splurged on 5-star hotels—anything to feel warm and fuzzy.

There is nothing wrong with treating yourself if you can afford it. I still stay in 5-star hotels occasionally, but I do so sparingly and not in an attempt to heal a deep inner pain.

Trust me when I say that using money to buy freedom for your future is far more satisfying than buying new toys that your brain will get used to quicker than you think, leading to you buying more and more to get the same Dopamine hit. Use your money to buy income-producing assets such as stocks and real estate.

4. Your Health is Your Greatest Asset.

I want you to see wealth holistically. If you have your health and are loved, you should consider yourself a wealthy person regardless of how much money you have.

It is no good having a lot of money if you feel terrible through ill health or loneliness.

Putting your health above everything else and making it a priority is more important now than ever with a raging pandemic. When on a plane, the cabin crew instruct you to put your mask on first in an emergency so you can help others.

Get a check-up annually. Go to all your routine screenings. Take your medications as prescribed and control your blood pressure and cholesterol. Eat healthy, exercise and avoid the midday sun. Do not smoke and drink moderately.

If you take more care of your car than yourself, you are doing something wrong.

Conclusion.

By now, you should be thinking about wealth as part of your overall health and happiness. You should be starting to feel that you not only deserve to be wealthy but that such wealth is achievable.

You should have a new emphasis on looking after yourself physically and mentally. Stop buying shiny things and focus on your future and the future of your children.

Put money aside every month to invest, or at the very least, save for a rainy day. The amount doesn’t matter at this stage. Just adopt the habit.

Create a budget. Work out where all your money goes and see if you can make adjustments. You may be surprised.

Finally, regardless of your finances, remember that if you have health and love, you have all the riches in the world.