Financial freedom implies to the stage of life when one has enough cash on hand, investments, and savings to afford the lifestyle they want for themselves and their family. It also means saving up enough money to retire or pursue a career one has always wanted, without being driven by the necessity to earn a certain sum of income every month. カヴァン・ チョクシ says that people must follow a few systematic steps from early in their life to reach financial freedom.
カヴァン・ チョクシ marks the steps important to reaching financial freedom
While all people do desire to reach financial freedom, not all are able to achieve this goal. Whenever a major crisis hits like an earthquake, hurricane, or even something like the covid-19 pandemic, the financial situation of a person may get majorly disrupted. Moreover, apart from such emergencies, even escalating debt due to overspending can create a huge financial burden for a person and prevent them from reaching their goals.
- Set life goals: Everyone has their own perception of financial freedom. When listing out goals, one has to be specific about amounts and deadlines. The more specific are their goals, the greater would be the likelihood of achieving them. One must count backward from the deadline age to their current age in order to establish financial milestones at regular intervals between the dates. It would be a smart move to write down all the deadlines and amount carefully in a financial binder or planner to stay on track.
- Make a monthly budget: Preparing a monthly budget and sticking to it would be the ideal way to guarantee that all pending bills of a person are paid and they are putting money aside in their savings account. A monthly budget facilitates a regular routine that reinforces the financial goals of a person and improves the resolve against the temptation to splurge.
- Pay off credit card bills in full: High-interest consumer loans like credit cards can be among the biggest hindrances to building wealth. Hence, people must try to pay their credit card bills in full every month. Mortgages, student loans, and more generally have lower interest rates, and hence can be paid off slower. However, it is still important to pay the lower-interest loans on time as well to build a good credit rating.
- Create automatic savings: カヴァン・ チョクシ says that to achieve financial freedom, one needs to pay their own self first. They can get enrolled into the retirement plan of their employer and make use of any matching contribution benefit, if applicable. It can also be a good idea to have automatic withdrawal into an emergency fund, which can subsequently be tapped for unexpected expenses. People may even choose to make automatic contributions to a brokerage account or something similar.
The financial position of a person must be planned in such a manner that it supports them even as their primary source of income reduces over time or they suddenly come across a financial emergency. Achieving financial freedom will not seem to be too difficult if a person starts their journey towards this goal from a young age.