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65 years. This is the retirement age in the United States.
How many people do you think enjoy their jobs and want to work that long? It turns out more people than ever want to retire before they hit 60.
Are you one of these people? Sure, you could save much more than you spend and cut back on your life. But, that isn’t always necessary. There are strategies you can use to improve your financial standing and save money. This post will fill you in on those details.
Keep reading to learn eight tips that will help you attain financial independence.
1. Figure Out How Much Money You Need to Live
Don’t make the mistake of thinking that what you live on now is what you will live on in the future.
Things changes, prices change, and your tastes change. Make sure you leave yourself enough wiggle room to adapt to the future, so you aren’t hurting for money.
It is always a good idea to plan for more than you think you will need.
2. Learn to Embrace Frugality
You don’t need to give up all the things you love, but chances are you can do without a lot of the stuff you buy. Much of it ends up going on a shelf somewhere and forgotten.
Run a little experiment. Go through your house and gather everything that you haven’t touched for three months. How much of it do you need to keep?
Start by throwing out the things that are just wasting space. Keep doing this until you only have the essentials left over. Once you’re there, be very observant of the purchases that you make.
Once you embrace purchasing only things that will bring you value for a long time, you’ll find yourself spending less. Use this extra money to invest.
3. Get Serious About Paying Off Debt
Do you know how much you are paying in interest every month?
When you figure this out, you will learn how much you can save every month by working off your debt. Chances are this will add a decent amount to your bottom line.
Take care of high interest debt so it doesn’t hinder your savings and push out your retirement date.
4. Take on Side Gigs
Do you have anything you are good at?
Most people do, but they don’t capitalize on it.
If you’re musical, give music lessons. Like teaching? Some companies will pay you to teach English over the internet.
You also have multiple gig driving companies that will pay you for being a taxi and doing deliveries. Investigate what you can do in your free time to increase your bottom line.
Just don’t overdo it and make sure you take some time for yourself.
5. Invest in Index Funds
Buying individual stocks can be scary for some people. It’s complicated and changes fast.
Index funds are less stressful and, in most cases, a safer way to invest in the stock market.
An index fund is an investment that takes each of your shares and invests it in the top companies on the market. Doing this means you will own a piece of all them, instead of owning shares in one or two companies.
This investment is a safer method for less experienced investors since you spread your risk across more companies. If one fails, your investment doesn’t fall apart.
Index funds also have a history of being stable across time so many people use them as a means to grow their wealth.
6. Invest in Real Estate
Real estate is a tried and true method for financial independence, and it offers several ways for you to get involved.
Buy and Flip Houses
Buy low and sell high. That’s your goal for house flipping.
The goal here is to find a property that is underutilized or distressed and fix it up. Once you make your improvements and improve the value, you can sell for a profit.
Rental Houses and Apartments
Starting up with rentals means you are going to be dealing with tenants. If this is up your ally, then this can be a lucrative business that will pay off for years.
Beginners can start with single family homes or duplexes. Once you get experience with rentals, you can move on to apartments.
To learn more about investing in apartments you can read this article.
Invest in a REIT
Do you prefer a more hands-off approach? A REIT will give this to you.
When buying into a real estate trust, you are investing money in companies that own their own property. They use their investment to expand, and you get returns from your investment.
7. Minimize Your Taxes
Nobody likes paying taxes, but you have to do it.
That doesn’t mean you shouldn’t try and reduce how much you pay to maximize your savings.
Investigate all the investment accounts available to you and see which ones are tax-advantaged accounts.
If you work for a company that offers retirement, 401ks, or other savings accounts, this is a viable option for you. Several of these accounts are tax-deferred, meaning that you pay into the investment with pre-tax income.
When you withdraw this in the future, your tax burden is based on your income from these payments. If you are living on less than you are now, you will be saving money on taxes that you might be paying now.
8. Start a Side Business
Starting a business doesn’t have to be expensive, and it can pay dividends for years down the line.
Take affiliate marketing as an example. Every day people are using this business model to promote high-quality products and earn a respectable income through high paying affiliate programs (you can read more about them on Bengu). Popular affiliate networks like CJ Affiliate and AWIN make it easy for marketers to get started from scratch and connect with high-quality businesses around the globe.
Starting your own business not only allows you to increase your income but potentially leave your day job to pursue something better. If you do it right, it by itself can help you become financially independent on its own.
This option isn’t for anyone, but for anyone who can make it work, it could be the fastest way to success.
Start Working Towards Financial Independence Today
The more money you can put towards financial independence the quicker it becomes available to you. Now that you have some ways to accelerate your progress it’s time for you to get started. Time wasted now is more years of you working in the future.
Are you looking to wind down in retirement? Read our article on retirement planning for business owners for more advice.
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