7 Steps to get from being a financial disaster to financial freedom – FD2FF

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financial independence

Bryan Flowers 7 Steps From Debt to Financial Freedom

To rise to the top level of financial freedom

Step 1 – Find ways of making more money instantly, if you are making a minimum wage you do not need to accept this,  look for jobs you dream of, apply for jobs that you didn’t have the guts to apply to.  As an employer, I am bombarded by unsuitable applications, it’s their problem if you are not good enough! Let them make that decision and deal with it.   You never know the level of people that have applied before you, some people are looking for hard-working faithful workers over qualifications!

Step 2 – Look for some side hustles that can grow into businesses or just make some money on the side. There are plenty of YouTubers that you can learn from, like “Let’s Talk Money! with Joseph Hogue”  You have plenty of time, the trick is to be patient, look long term, one brick at a time

Step 3 –  Take control of your finances, you need to know where every last penny is coming from and going to,  you need to either budget or at least have some awareness or preferably both. This site is very good for budgeting. https://www.youneedabudget.com Budgeting doesn’t need to be a complete bore, for example, I have money set aside weekly that I can spend on anything and I don’t track where it goes.  I call it “pig” money because I am being a pig with it. (selfish) But in reality, I end up buying Bitcoin with it.

Step 4 – Pay off bad debts, not debts that are making you more money such as buying houses.  I don’t pay off my car payments because of the interest is lower than anywhere I can borrow money for, so I see it as a cheap loan which frees up cash.  Paying off smaller debts first will keep you satisfied and motivated!  You need to plan ahead.

Step 5 – Try and save up 1-6 months worth of expenses in savings, this depends on if you have dependables or if you live with your parents.  If your living with your parents then it’s not so important to save money, you can prioritise debts and investing. If you have children, then you need to plan for worst-case scenarios.

Step 6 – Budget around 15-80% of your income into investments, such as low-risk low-cost vanguard index funds, I am not a financial advisor but I can point people in the right direction to do your own research.. (that’s the best way to learn) I have written elsewhere about books to read to learn about investing.

Step 7 – As your investments increase, your dividends/income should overtake your living expenses,  now you are financially free.  But you must get your numbers right, there is plenty of arguments to be had about getting the margins right if your heading into a recession, the general rule of thumb is taking out 2-4% of your income per year, so it should keep compounding even in hard times.

Motivation towards your financial independence

I often check this compound interest calculator to see when I can retire by,  you can see how quickly your income rises and how sooner you retire by getting off your backside and making more money doing side hustles. You can do this in 5-10 years instead of waiting until you are 65.