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What is financial freedom?
According to Moneyfit.org, ‘financial freedom’ means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families.
Unfortunately, life happens and very few people achieve their financial goals. Besides the increasing cost of education, electricity and fuel, unforeseen financial expenses and the need to support families and communities all reduce the portion of disposable income which we should allocate for saving.
Working towards financial freedom is almost like going on a diet. Nobody likes it, but the results are uplifting.
The information provided in this article is for information purposes only and should not be considered as financial advice.
As with going on a diet, you need to:
- Have commitment
- Draw up a realistic budget (diet plan).
- Set realistic short-term, medium-term and long-term goals.
- According to Warren Buffet do not save what is left after spending but spend what is left after saving.
- Make sacrifices
- Measure your progress
When to start?
A good rule of thumb is this: The best time to start investing is always yesterday, and the next best time is today. You are never too young or old to start investing.
How much is it to invest?
As a guideline experts recommend 1 % of your pre-tax income when you start investing in your 20s. As you get older and only then want to start investing ideally the larger the percentage of investment needs to be.
Compounding your investment
Make the power of compounding work for you. The younger you start the greater the benefit of compounding interest on your investment will be. Compounded interest can supercharge your savings over time.
For more information on the calculation of compound interest click on the following link: https://www.thecalculatorsite.com/
Easy to follow tips to assist with obtaining financial freedom
- If you think you cannot afford to invest, start with a small amount.
- Saving should become a way of life — invest on a monthly basis to get into the habit of saving.
- According to your personal circumstances, annually increase the percentage of income allocated towards investments.
- Using a debit order is a convenient way of automatic saving. A debit order also reduces the likelihood that you could spend the money and then have nothing to invest.
Uncertain about the different investment options?
Deciding which financial services product and provider to use can be complicated.
For more information contact MyWealth Investments or speak to your financial advisor who will be able to do a needs analysis and assist with a recommendation in line with your risk profile.
The information provided in this article is for information purposes only and should not be considered as financial advice.
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