Your Fast Track to Financial Freedom

“Risk comes from not knowing what you’re doing.” -Warren Buffett

Achieving financial freedom is a dream for every individual, unrelated to early retirement. On the other side, everyone wants to retire from their work early. So, people try to save money and invest in their earning period so that after retirement, they can use that saved money and its compounded interest. The description of financial freedom may look easy, but trust me, it's very complex, and a commoner can misinterpret it and start saving money without any structured plan. This won't make you financially free; rather, it can make you a fool, so always implement some blueprint or systematic steps to save money to achieve financial freedom.

Financial freedom is not about money, it’s all about having enough passive income to manage your lifestyle. So, let's first understand what type of passive income I'm talking about. The passive income you will earn after retirement is basically the return from the previous investments you've made in your earning period. You can also be involved in some other work or businesses to earn money, but that doesn't justify retirement, where you're not supposed to do any kind of job to earn. The first step of becoming financially free is setting goals, such as at what age you want to retire, how much money you need in your bank account for emergency funds, and what kind of lifestyle you want. This goal setting will work as a foundation of your financial freedom, and it will also motivate you to reduce your bad spending.

After setting the goals, now you should look for where you stand at the current time. Yes, time is the main key factor in this whole concept. Money is compounded with time; we also use time as a scale of our financial freedom and as a navigator of how much we can save our money and at which point we are going to take our retirement. For example, if you are now more than 30 years old and don't have enough savings in the bank or haven't started investing yet, then it seems impossible to take early retirement, especially if you're living in a tier-1 metro city. On the other hand, if you're in your 20s now, then it's a good chance to plan and become financially free and take an early retirement at the age of 40-45. You have to analyze your income, expenses, and how much you're going to save. Now, you will decide how much money you need to retire with comfort. Some experts say if you have money that amounts 25th times your annual expenses, then you can retire. But you have to be very careful while calculating your expenses; you must consider inflation, healthcare expenses, your family's living costs, and some hidden expenses that are expected to be incurred in the future. It is advisable to count some extra amount.

Now, you already have a rough idea about how much you need to save within how many years. Now start saving and investing by doing some market research about which is going to give you more interest. Rather than putting in FD, you can go for other options that are similar riskier than FD but give you more return. Nowadays, everyone is used to playing with risk, and most young investors invest in high-risk, high-return financial assets. If you are in your 20s, then I will suggest you invest in medium-risk capital like debt funds, bonds, etc., but if you're in your late 20s or in your 30s, then I can suggest you go for mutual funds, ETFs, or index funds. You may invest in stocks or penny stocks; it's your personal choice, but remember you're investing for your early retirement and financial freedom. An automatic savings fund or Systematic Investment plan (SIP) is very helpful for those who have just started savings. It will automatically take some money from your account every month after your salary credit and invest it somewhere that will give interest; you can also customize where to invest. Overall, you have to create a good portfolio and start investing monthly, weekly, and daily. You can also hire brokers to create a diversified portfolio if you don't have that much time

Another important aspect of this path is debt management. If you've taken high-interest debts, then try to repay these. Otherwise, you can't get financial independence as it will suck your savings and increase financial stress. Try to avoid taking debt and buying products in EMI. Also, credit cards and loans are traps; try to avoid them as you can, as it will cost you a lot of money to pay your interest. Say no to any kind of debt, and if you can manage to live life without debts and EMIs, then trust me, your financial freedom is 50% done.

You need a very high income to save money for retirement and with the present living expenses. Nowadays, the definition of high income is not answerable as the living costs are touching the sky with rising inflation. People are switching jobs that pay them high salaries, or they are doing multiple jobs or doing side business. Moonlighting is very popular, and it can give you extra income besides the regular income from your 9-5 job. Though some companies don't allow moonlighting, people are still doing this without informing others because they are capable of doing so, so you need to find your way. If you own a business, then try to integrate some other businesses so that it can earn extra money. Some people do freelance work, which pushes them more towards working and earning a good amount of income, many do this with their full-time jobs. Finally, I just want to say that to achieve financial freedom, you need to work very hard during your working period.

Your health is also another important factor here. So, you need to take care of your mental and physical health so that you don't fall ill. Now, you need to live simply, buy only important things, negotiate, and be happy with what you have because your future will be more beautiful.