Post written by Sherin. Follow me on Twitter
Does you spend lots of time to know the real meaning of personal financial freedom? or, wonder when hear/read this term somewhere? Here is a chance to know what exactly mean by the term ‘financial freedom‘ along with number of influencing factors to achieve this.
I am presently in the train birth, traveling from my village to the city where I am working. It was a fantastic Christmas holiday for me with lots of enjoyments and activities!
Learn to always remember the first and most important lesson of personal financial freedom – Never spend more than your earnings! Those who know and practicing this, reached the half way of financial wisdom.
Personal financial freedom, the term, is simple to understand. It is a position of an individual who never run out of money to meet all present requirements as well as future too! How it is possible? Below are the points making this is possible.
1. Above said ‘all present requirements‘ never mean ‘ALL‘. But, it is the well planned requirements but satisfactory to each members in the family and highly run inside the budget and money allocated for that!
2. The word ‘future‘ expresses the saving requirements and shows it should happen from the earning or earnings.
3. Overall, it exposing the requirements of having right control on your earning, saving and planning!
We can easily divide the financial freedom process as two parts: Earnings and Planning. How could people generally earn? There are number of possibilities:
Traditional income streams:
A full time job or business – could be the major income stream of an individual or family. We generally found people have a full time job or doing business. It may OK to accomplish the requirements of the family but not sure the requirements will shrink inside this limited money. If it is, again you are only fulfilling the present requirements but not sure you have sufficient money to save for future.
If you have sufficient salary or income from business that able to meet present money requirements as well as saving requirements, you are in the comfort zone. But, I am sure a very less people have this advantage. It is too hard for majority people. Job loss fears, business down turn all are other scary factors capable to affect financial freedom of a family or individual at anytime.
Do we have any solution to meet all these troubles boldly? Yes. We have a choice with the new term “Enhanced Income Stream!”
What is this heck enhanced income stream? It is nothing. In traditional model, we have either a full time job or business. We have also found both of these are vulnerable at any time. So, to overcome such panic situations, how do you feel having a full time job with part time business or full time business with part time job? You can even have a combination of full time job with part time job!
This enhanced income stream have number of beautiful advantages. Some of them are here:
1. It is best to support your family in case of job/business issues. 2. It would help to earn extra money. 3. You can better utilize your free time productively. 4. You may sharpening your secondary skills to make your profile suitable to multiple sectors at a time. That is truly Terrific! Next is, the planning part. It is certainly a vast subject and I have wrote number of article on this under “financial planning” label. However, here are some core points to understand what ‘planning’ meant in this article.
1. Budgeting – it is the core of personal financial planning. Budgeting really helps to control requirements inside a pool of money allocated each month. It is highly helpful to identify and eliminate unwanted requirements and making people more thoughtful before spending any money.
2. Future goal setting and workaround – this section really huge! It covers major part of financial planning. Identifying various future needs, setting goals, identify required savings and actions like investments to achieve that goals are primary steps in this section.
Standard practices:
Steady and worry less income stream should be your first preference. Once achieved, work to become debt free if you are. Planning part required either professional help by good financial planners or self, if have enough knowledge. Best luck.
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