8 Steps To Reach Financial Freedom By The Time You Turn 30
No. 4 might be tough for you to take.
No. 4 might be tough for you to take.
What does Financial Freedom mean?
You can live off your passive income and spend your time however you want.
Also known as:
- FIRE (Financial Independence Retire Early)
- FI (Financial Independence).
You can live off your passive income and spend your time however you want.
Also known as:
- FIRE (Financial Independence Retire Early)
- FI (Financial Independence).
The freedom to continue working and doing what you love. Or not. It's up to you.
You're in your 20s. The earlier you start the better.
Life distracts you keep your eyes on the prize.
Here are 8 essential principles to follow if your goal is Financial Freedom
You're in your 20s. The earlier you start the better.
Life distracts you keep your eyes on the prize.
Here are 8 essential principles to follow if your goal is Financial Freedom
1. Watch your spending
If you want to reach FI, knowing where your money is going is vital.
Most people don't know how much they are spending each month.
Eliminate the things you do not really need.
Adopt a frugal mindset.
If you want to reach FI, knowing where your money is going is vital.
Most people don't know how much they are spending each month.
Eliminate the things you do not really need.
Adopt a frugal mindset.
2. Avoid any debt
You can't reach FIRE status if you have a lot of debt.
It'll act like a massive anchor that your FI ship cannot move with.
First focus on getting rid of high interest debt. Anything above a 4% interest rate.
Then start paying off lower interest borrowings.
You can't reach FIRE status if you have a lot of debt.
It'll act like a massive anchor that your FI ship cannot move with.
First focus on getting rid of high interest debt. Anything above a 4% interest rate.
Then start paying off lower interest borrowings.
3. Find a modest house
Accommodation is usually one of the the biggest expenses for people.
If you want FI before 30, you need to minimize this.
Living it up in a penthouse apartment to boost an ego is just waste.
Think about downsizing or house sharing.
Accommodation is usually one of the the biggest expenses for people.
If you want FI before 30, you need to minimize this.
Living it up in a penthouse apartment to boost an ego is just waste.
Think about downsizing or house sharing.
4. Nobody notices your car
Here are expenses related to cars:
-Monthly repayments
-Fuel
-Motor Insurance
-Repairs
-Tyres
When you see someone in a nice car, you don't think wow they are cool - you think wow I'd be cool
Buy a sensible second hand motor.
Here are expenses related to cars:
-Monthly repayments
-Fuel
-Motor Insurance
-Repairs
-Tyres
When you see someone in a nice car, you don't think wow they are cool - you think wow I'd be cool
Buy a sensible second hand motor.
5. Load up your investments
Invest all the money you saved from the house and car into sensible quality stocks, ETFs, Crypto.
Every cent you put away today into quality investments will multiply in value over the coming decade or two.
Research everything before you invest.
Invest all the money you saved from the house and car into sensible quality stocks, ETFs, Crypto.
Every cent you put away today into quality investments will multiply in value over the coming decade or two.
Research everything before you invest.
6. Open an investment account
Schwab, Fidelity and AmeriTrade a good brokerages to use.
This will be the engine room for your investments
So keep it well funded and invested in a diverse group of stocks or index funds.
ETFs and Index Funds are best for beginners.
Schwab, Fidelity and AmeriTrade a good brokerages to use.
This will be the engine room for your investments
So keep it well funded and invested in a diverse group of stocks or index funds.
ETFs and Index Funds are best for beginners.
7. Understand the 4% rule
This rule will give you a near estimate of your FI goal.
To discover it, just multiply your yearly expenses by 25.
If your yearly expenses are $60K, then you will need to save $1.5 million to reach FI.
Your portfolio growth will naturally replace it.
This rule will give you a near estimate of your FI goal.
To discover it, just multiply your yearly expenses by 25.
If your yearly expenses are $60K, then you will need to save $1.5 million to reach FI.
Your portfolio growth will naturally replace it.
8. Earn more income
Reaching FIRE requires aggressive saving and investing.
Eliminating expenses assists, but you will ultimately need to increase your income. Do this by:
-Working more
-Getting a raise
-Starting a side hustle.
Additional income should be invested.
Reaching FIRE requires aggressive saving and investing.
Eliminating expenses assists, but you will ultimately need to increase your income. Do this by:
-Working more
-Getting a raise
-Starting a side hustle.
Additional income should be invested.
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