How to Become Financially Independent in 7 Steps

How to Become Financially Independent in 7 Steps
Early retirement. So many of us have thought about it. But few of us live it. How can we spend the rest of our lives doing what we want rather than what we currently must?
In other words, we wonder how to become financially independent

Wouldn’t it be nice to finally spend your time writing that novel you’ve always wanted to? Or maybe you have a true passion for charity and service work and wish you could devote your life to the cause.

Maybe you just want to be really rich. Really happy. And retire early.

In order to do so, you have to put in hard work. AND you have to have a plan.

Ask anyone if they want financial freedom and the answer is sure to be a resounding “Yes!” But what is financial freedom, really? Depending on who you are, it can mean different things. Life without student loans. Enough money to retire comfortably. Passive income so you never have to go to your day job. These are all examples of financial freedom, to a degree.

The core premise of financial freedom is the same: Having the fiscal stability to live the life you want. When you aren’t burdened by debt and have enough income to live independent of a paycheck, you’re financially free. It takes a lot of smart decision-making, self-control and hard work to become financially free. But the rewards are worth it.

Here’s your guide to financial freedom, from learning what it really means to the steps required to achieve it.

Financial freedom from a fiscal perspective

It’s called “financial freedom” for a reason! The cornerstone of being financially free is having a personal balance sheet with little or no debt, plenty of assets and liquid capital. But that means reaching some lofty goals like investing in the stock market, real estate or business ventures. Or not having a mortgage or car payment. These things take time, patience and discipline.

Most of us start in the red. We have student loans fresh out of college, a car payment and, soon, a mortgage that’ll stick with us for 30 years. An entry-level job barely pays enough to live paycheck to paycheck. As we start a family, we accrue more expenses. At this point, financial freedom can seem a long way off. And it is! But it’s not impossible. The key is realizing the importance of every dollar

I’m here to help you create that plan. Here’s your road map

1. Taking Stock of Your Financial Health
2. Deciding Your Long-Term Goals
3. Creating a Rigorous Budget
4. Starting an Emergency Fund
5. Paying Off Your Debt
6. Increasing Your Income
7. Investing in the Market… and Yourself

1. Taking Stock of Your Financial Health

To get where you want to go in life and reach financial independence, you first need to know exactly where you – and your bank account – are. The first step on your road to becoming financially independent is taking stock of where you are right now.

This requires being rigorously honest with yourself which – believe me, I know – isn’t always fun or easy. But here’s what you need to take note of in order to do a full-on financial checkup.

• Income – Understanding your financial health starts with a thorough understanding of your income. Of course, this begins with your salary or wages. Not only do you need to note your gross pretax income, but also your true take-home pay after taxes. Also account for 401k and withdrawals for other retirement accounts, health insurance premiums and any other deductions from your gross pay. Income starts with salary, but it does not end there. Other sources of income to note include:.
• Investment Income – If you have money in the markets, whether in bonds, stocks, metals or elsewhere, you should be accruing income from this investment. This can be through interest, dividends or capital gains..
• Passive Income Streams – Are you generating income through affiliate marketing on a website, by renting out real estate you own or even through interest on a large savings account?

·          

• Side Hustles – Do you work a gig in addition to your main job? Perhaps you are a freelance marketer, have a small retail business, or drive an Uber or Lyft. Include this in your total income as well.

• Expenses – This side of the equation is less fun to total, but here is where it is especially important to be honest with yourself..
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• Housing – Do you pay a mortgage or rent an apartment? Chances are this is where a large chunk of your monthly change is going. You can also include your utility expenses here: utilities, cable and internet, and insurance on the property.
•  

• Household and Living Expenses – Household expenses can include everything from your groceries, laundry detergent, gasoline for your car and anything else included in your typical day to day expenses.

• Debt Payments – Other than your mortgage, what debt do you currently have? Credit card debt? Auto loans? Student debt? Make sure to account for all of your debt payments here.

• Social – As the ancient Greek philosopher Aristotle once told us, the human being is a social animal. Socializing is extremely important for a healthy life, but you must make sure your spending is not out of control.

·         Now that you’ve taken stock on where you are today, let’s take a look at your long-term goals and cultivate a path toward achieving financial independence.

·         2. Deciding Your Long Term Financial Goals

·         Financial freedom can mean different things to different people. Are you looking to pay off all of your debt?

• Whatever financial independence means to you, it’s important to note your ultimate goal and even to visualize yourself living it.

But the end game is not your only goal.

You will have intermediate steps along the way. After you have taken stock of where you are financially, you should have a better sense of the steps you need to take.

Intermediate goals may include:

• Increasing your income
• Building up your emergency funds
• Getting out of debt
• Decreasing your living expenses to a manageable level
• Earning a significant return from investment income
• Being able to meet all potential liabilities like car loans, real estate purchases and paying for your children’s college with cash
• Quitting your job
• Starting your dream business
• Buying a yacht
• Investing in a film production
• Buying an original painting by Francis Bacon
• The sky’s the limit!

But you have to walk before you run. Meeting your smaller goals and challenges will help encourage you to continue to pursue the standard of living you truly seek in life.

3. Creating a Rigorous Budget

Living richly later means living frugally now. To do this successfully, you need to create a rigorous budget and stick to it, based on the data you’ve collected in the previous steps.

The worst possible way to do this is to try and track everything by hand. The day of balancing the checkbook is over. And you’ll save yourself some hand cramps.

In fact, you’ll want to use technology to automate this process as much as possible. Find an app that will do this for you, like Mint or one of the others in the article I linked to above.

While transactions can be entered manually, a better method is to tie your bank account and debit or credit cards to the system so that everything deducted or charged is automatically accounted for in the app.

An important point is not to create too many different categories of transactions. Otherwise the app can become inefficient and overwhelming. You might become even more stressed out, rather than less.

Here is how I’ve set up my app categories:

• Income
• Paychecks
• Other
• Savings
• Emergency Fund
• Investments
• Debt
• Credit Cards
• Student Loans
• Car Payments
• Housing
• Rent
• Utilities
• Expenses
• Groceries & Household
• Social / Entertainment
• Other / Misc.

• 4. Starting an Emergency Fund

·         But unfortunately, emergencies happen. You might get sick and need to go to the ER. Your air conditioning might break down. Or, maybe worst of all, you might lose your job.

·         Having an emergency buffer is essential to being able to handle such situations. But how much money should you be saving in your account?

·         Then, depending on how much high-interest debt you have, you can weigh and balance – stashing more cash in your emergency fund versus paying down your liabilities.

·         It is often recommended to have at least 3 to 6 months of your expenses covered in your emergency fund for that proverbial rainy day.

·         Make an effort to contribute to your fund every month. Refer to your monthly budget, cut down on expenses where possible and use automatic deductions from your everyday checking account to pad your savings.

·         Because this is intended for emergencies, you’re going to want to be able to access your cash quickly. Use a liquid account or investment to hold your savings.

·         This could be a savings account with a high interest rate, a money market fund, certificate of deposit or a similar type of financial instrument.

·         5. Paying Off Your Debt

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That’s scary.
While building your emergency savings fund, you should also be making an effort to tackle your debt. Being debt-free is one of the most important aspects of achieving financial independence.
There are different methods you can use in order to pay down your debt. Conventional wisdom argues that you should start with your highest interest debt first.
This makes sense because the higher the interest rate, the more money it’s costing you. On the other hand, some recommend working your way up to your biggest debt outstanding.
This is recommended for psychological and motivational reasons. Think about a comparison with dieting.
Losing weight is daunting. But once you lose those first few pounds, you’re often inspired to keep going.
Debt works the same way. After you’ve paid off your first credit card debt or your car loan, you’ll be more inspired to keep hacking away at your liabilities.
Regardless, the sooner you can pay down your debt, the better off your financial health will be.
Moreover, avoid taking on more debt. Cut up extra credit cards. Don’t lease that fancy new car you want just to keep up with the Joneses. Perhaps even rent, rather than taking on a mortgage.
Debt – even so-called “good debt” like a home mortgage – can completely cripple your ability to become financially independent. So work hard at decreasing and eliminating it.
6. Increasing Your Income
It is often easier to decrease your monthly expenses than to increase your salary. After all, it’s often scary to waltz into your manager’s office and demand a raise.
Nevertheless, there are ways to increase your monthly income without needing to to make that ask.
For starters, there are often one-off income deals that can help you earn a quick spurt of cash. For example, you can fill out online surveys or participate in a focus group or psychology experiment.
If you know someone who is going away on vacation, you can offer to walk their dog or house sit for them. Freelancing as a writer, designer or other helpful role is a great way to make additional money.
Finally, you can consider the possibility of taking on a second job, which is difficult but not impossible. Perhaps settling for something in the gig economy, like driving an Uber can help you earn more money on top of your base salary.
Oh, and while this is a much longer-term play, make sure you are enjoying the benefits of any employer match program for your retirement plans or 401k.
7. Finally: Investing in the Market – and In Yourself
To really become financially independent, you’re going to have to do a lot more than work your job.

here are plenty of different modes and opportunities for investing out there. For example, you can do something as simple – though with less potential reward – as investing in some market index funds. This can be effective if you have acquired limited market data and knowledge but still want to earn that return.

But If you are or become a more knowledgeable or experienced investor, you can do your own financial planning and pick your own securities. Your portfolio could include stocks, bonds, commodities, options, currencies or any other combination of the many financial assets out there.

As your net worth continues to increase, you may even decide to invest directly in business ventures or become an entrepreneur yourself.

Finally, remember that your road to financial independence is ultimately an investment in yourself. You deserve the freedom that you crave.

I hope this article has helped you understand the basic steps of how to become financially independent. And if you’re interested in learning more about investing and growing your nest egg, I highly recommend taking a look around the Investment U website.

It’s chock-full of articles on everything from stock trading basics to investing in precious metals to tips on how to beat the market – even when it’s in steep decline.

10 digital marketing strategies for startups

Some of the top tried and tested ways of increasing reach in the digital sphere
Being a new start-up in the industry is not easy. Managing budgets and finances, trying to reach deadlines every day and struggling to turn your dream into reality.
The digital age has made it considerably easier, now that almost everyone has access to the internet. Marketing is the core step in building a start-up successfully.
If marketing is done right, your start-up will flourish: it will make a name for itself in the world of new businesses.
Social media marketing
Social media marketing is a rising trend for promoting products and services through major social media channels
This type of marketing involves creating and sharing content on social media networks, like Facebook, Instagram, LinkedIn and Twitter, to achieve your social media marketing and branding goals.
Every start-up takes the first step by creating business profiles on these social media platforms. In digital marketing, presence on all major social media platforms is the primary step for startups to build brand trust and influence in the target market.
A sound social media strategy for start-up involves setting goals, researching your audience, studying your competitors and creating content to market your services or products.
Content marketing
This brings us to content marketing. Content marketing is a strategic approach to modern digital marketing that is purely focused on creating, publishing, and distributing quality content for a targeted audience online.

This strategic approach focuses on building a base of potential clients and customers. 

Search engine optimisation (SEO) 

Search engine optimisation is a methodology involving strategies, techniques and tactics used to increase the number of visitors to a website.
It helps achieve the objective of a high-ranking placement in the search results page of a search engine (SERP), including Google, Bing, Yahoo and other search engines.
If your website ranks high in search results, then every time your potential customers search for keywords related to your products or services, it leaves them with the impression that you are a reputable company.

Pay-per-click marketing (Google adwords)

PPC stands for pay-per-click advertisement, a mode of internet marketing, in which advertisers are paid a sum of money each time one of their ads is clicked.

This marketing strategy helps you generate quick revenue and drive targeted traffic by placing main keywords on Google Ads area.
The advertiser should analyse the effectiveness of each campaign and then adjust keywords, placement, and budget allocation to capitalise upon the data from previous campaigns.
Influencer marketing
The growing trend on social media revolves around influencers. Bloggers, YouTubers and Instagrammers- influencers are sprouting up from all avenues, each with thousands of followers. Ads they post will reach a global audienc
It is a bit affordable as compared to other paid marketing strategies.

This type of marketing uses word-of-mouth as an aspect to help you in building a trusted brand, Customers trust the authenticity, so they get engaged if you are a brand

Web analytics

Web analytics is a must-have tool for digital marketers who collect, analyse, measure and report website data for understanding and optimising web pages.

If you own a business website then connecting with the web analytics tool can give you a broader picture of your website visitors, their devices, time spent on your site, web browser they are using, regional data and search queries related to your business, etc.

 The analysis of Internet data and user information through various means is referred to as Web Analytics. It is employed as a way of fully understanding pertinent trends and rendering Web usage efficacious. 

Digital advertising  

Digital advertising is the promotion of your business on the internet. It is the usage of this unique platform as a basis for promotional work. Think of the websites as billboards, carrying Ads of your business. 

In digital advertising, you can utilise different promotional advertisements strategies and deliver business messages through website and search engine paid adverts, emails, social media channels (paid and organic) banner ads, mobile app ads and

affiliate programs and other marketing channels available in the digital media space.

Optimising for voice search

Usability has been significantly advanced in this modern age. More and more people are emerging and making it easier for you to use our phones. Voice search technology is an excellent step for improving user experience.

Digital marketing requires precision and fool-proof strategy. Due to the introduction of the Google Hummingbird update, voice search has become more widely enhanced and intelligent.

The results are much more intricate as the algorithm digs up ‘hidden’ or contextual data from the voice and displays it on the screen. 

Optimising for video search

Nobody likes to see a page full of black and white text, without any visual aids. Pictures and videos make the website seems more attractive to the audience.

Adding videos to the site also makes the start-up achieve a more significant market, growing the business two-fold. Start by renaming the video to the pertinent keywords and add keywords in your video description as well.

So, if you already have videos on YouTube or other video search engines then optimise them with relevant description, titles and keywords to get maximum benefit for your new business

Chatbots and more content!

People talk to customer service for more details about the product or any queries they might have. It is not possible to hire so many people right at the beginning of a start-up, as funding is low.

The initial investment does not allow the person to pay salaries for employees, so chatbots are the perfect solution.

Remember a pop-up text message that appears on the corner of a website, asking basic questions like “How was your day?” or specific ones like, “Which section of the magazine do you enjoy reading the most?”.

These chatbots make your site more interactive. However, don’t underestimate the power of content. Your start-up can only flourish when you have quality content. Don’t stress about the number of blogs you post per day; quality is far more critical than quantity. 

Conclusion

Building a successful startup is an uphill battle. You have to fight against fierce competition in the business world of today.

However, by selecting the proven digital marketing strategies, you can stand out from the crowd.