Financial freedom means to take control of your personal finances. It is about having adequate flows of income that can make our lives easy so that we don't have to spend every second of our day thinking about ways of making money. It is about making sure that you are prepared well for your financial future by developing adequate habits to compound your hard earned income. It is about making your money work for you. Money doesn't come easy but it's not that hard if you are prepared with a lot of tools. But the sure way to be financially free is by developing the habits of the wealthy.There is no exact sure ways of being wealthy but following habits can help you achieve your financial goals if you have the discipline and respect for money.
Don't ever think of living a poor life: We come from a traditional and spiritual background where money is not viewed positively. However, Nepalese society is moving toward materialism and there is heavy emphasis on power and money. So if you want to be financially wealthy then the first habit you need to develop is the habit of positivity towards money.
Start creating multiple streams of income: One source of income is never enough to make us ultra wealthy. The more streams of income, the more chances of being financially prosperous. There are few types of income depending on how you make it such as Active income, Passive income, Portfolio income and Royalty income. Active income is earned by making a physical effort to make it such as by doing a job or doing your own business. Passive income is the earnings made by making your money work for you. Portfolio income comes from your portfolio of stocks, bonds, bank deposits etc. Royalty income is the income earned through your royalties, franchises etc.
Use the power of compounding : Albert Einstein said" Compound Interest is the eighth wonder of the world.He who understands it, Earns it.. He who doesn't, Pays it" . You can generate enormous wealth if you can save an automated amount of money each month in your savings account. Given that current savings account yield very high interest rates so saving monthly and letting it compound over time is a good way to build riches.
Start investing from young age : Warren Buffet quoted "If you don't find a way to make money while you sleep, you will work until you die". Perhaps, this is the best way to be rich. Investing in stocks of good companies or other financial instruments can be a good start for your investing journey. Along with investing it will help you to understand about various kinds of businesses around you and around the world if you look to start your own business in the near future. And since Nepalese stock market is bearish so this can be a great opportunity for beginners to buy undervalued stocks in cheap prices if you look to be a long term investor.
Save before you spend : Poor people save what is left after spending whereas rich people save first and then spend which is left after saving. Living below your means and saving a good deal of money should be the first priority if you want to be financially free. Perhaps, we should buy luxury goods with our profit not our disposable income. This is very important because every penny spent today is a penny less for your future. Unnecessary spending should be controlled by the youths and it should be contributed for their future and in this way it will also contribute for the financial development of the nation when the youths get engaged in the financial market.
Pay your bills on time and be debt free: Paying bills and credits early is good for your credit ratings as well as for your pocket. Researches say that credit card bills and a lot of student debt is the major issue for the youths in the United States of America. Generally interest rates in the bills and debts now take a reverse gear and now this so called eight wonder is ready to disrupt your financial health. So the habit of paying bills early is regarded as a good way to have a sound financial health. Paying any kinds of current obligations on time is a good moral habit as well.
Take calculated risks : Never test the depth of the river with both feet is a popular saying when it comes to taking risks.Taking aggressive trading and speculating strategies is perhaps the most risky way to suffer financially. Calculated risks should be taken when it comes to managing money. If you are investing in stocks then investing in a diversified portfolio with stocks of companies of different sector will be a good idea. Speculating for a short term profit is like gambling and should never be practiced if you want to be a long term investor.
I must admit that how much money we make is just a part of the bigger picture. Have big dreams, plan it and take massive actions to achieve it.And remember that the greatest investment in life that you should make is to INVEST IN YOURSELF.