“I want to be a billionaire, billionaire … uh … uh”
I am not sure if it is the lure of designer items and luxury living that makes us all sing and dance to this song by the Nigerian artist. Teni, or the nice rhythm that leads us all to dance on the dance floor.
If you ask most people, it’s the former. We all long for comfort and a life on our own terms. This is definitely not a bad thing as life should be explored and enjoyed in every way.
However, we have to warn ourselves so that we don’t let the pursuit of financial independence lead us to activities that make us worse or fall out of favor.
There are several levels of financial independence. The first level is financial security. You have financial security if you can afford the basic needs of life such as food, accommodation, transportation etc. or if you live from the income from your passive income streams.
When you focus on financial independence, it is often easy to be overwhelmed with the number of zeros that are required for real independence. I was also overwhelmed when I realized how much it would cost to gain financial independence. As soon as we found a way to break it down into small, medium, and long-term goals, it became accessible to my family and me.
Here are some tips to help you achieve the first level of financial independence: Financial security.
As a man thinks, he is like that.
Your mindset will determine what you achieve because all things are formed from thoughts. Man is a thinking being and can produce thoughts. If you think you can achieve financial independence, then you can. It may sound simple, but the hard work is to believe this basic principle even in the face of a lack of or economic problems. The right thinking about money and financial independence will change your life forever. Study mentality books, attend the right conferences to learn from those who have achieved what you want to achieve, and see how you move toward your dreams.
Financial security does not depend on your environment. Many people believe that their ability to achieve financial independence depends on their environment. If this were the case, we would not have the richest man in Africa from a country like Nigeria. You cannot save yourself the way to wealth. Satisfaction is not a means of financial independence. If so, you have to be thrifty all your life to achieve financial independence when retired.
Get your financial habits in order
We don’t go to the level of our goals, we go to the level of our systems.
Habits shape our daily lives and ultimately contribute to where we are in the future. Today we are all experiencing the results of the daily money decisions we made a decade ago.
It is important to fix bad financial habits first. If you don’t have the bad habits of spending too much money, debt, buying things that you don’t need to pay for, you will get into addiction cycles even if you earn more income.
It is not your income that determines financial security or financial independence, but your money habits and decisions that determine financial independence. This is also related to how you think. If you feel that you cannot overcome your bad spending habits, you cannot. Whether you think you can or not, you are right.
Bet your money
In simple terms, investing means that you use your money for the work. If we don’t want to keep working for the rest of our lives, we have to make sure that our money works as hard as we work.
Once you get your financial habits in order, you will find that you have the extra income that you can save or put aside. It doesn’t seem like a lot of money, but it does add up eventually.
The amazing thing about compound interest is how they add to your savings over time, even when you start small. Start small with what you have rather than wait to invest when you have a lot of money. Make the most of time and compound interest by starting small and building your investment portfolio over time.
Build an emergency or security fund
Not only do you save or invest randomly, you also work on building emergency / security funds.
We should have emergency funds worth at least 3 to 6 months (you can do this for 12 months or 2 years) that have been saved and invested in a safe investment option. An easy way to do this is to roughly calculate how much you need to maintain your standard of living in a month. Think about how much you spend on groceries, transportation, rent, etc., estimate the amount of money for a month and save it in a multiple of 3-6 months in a security fund.
For example, if monthly survival costs N50,000, you will need at least N150,000 for 3 months or N300,000 for 6 months in a security fund. You can invest these funds in a money market fund to ensure security and restrict your access to this fund.
Join a responsibility group
No one is an island and we all need all the help we can get. One of the reasons I started an investment club was because I realized that I have to be accountable for my habits and my financial goals.
If you’re having trouble building new money habits, you need the right people near you to get better. Ask your friends to help you think on a new level by looking at financial independence in a different way. Meet up with friends to make money. Talk about money, investment opportunities, and your financial plans. It will broaden your thinking and show you what you need to do to be financially disciplined.
You can gain financial independence, but you have to start somewhere. Start raising your finances to achieve financial security and you’ll be on your way to financial independence over time.