Today it is fashionable to seek financial freedom. Dozens of financial gurus have a magic and simple formula to become millionaires. The first thing to say is that achieving financial freedom is not difficult, but it is not without effort either. That is why today we will talk about the 7 easy steps to achieve your financial freedom and the challenges you will have to face to achieve it.
Many times, there are very easy activities to do, and yet we do not. Immediacy, impulse beats us to discipline and effort. So, while achieving financial freedom can be a relatively straightforward process, not everyone achieves it.
Achieving financial freedom is a matter of determination, resilience, discipline, effort, and motivation. Later, we will talk about how each of these 5 attitudes that will help us achieve our goals, and how we can reinforce them.
As we mentioned before, they are easy steps, but they require a positive attitude towards change and a lot of motivation. When viewing the results. It will be very easy to continue on the new path. But to achieve change we must achieve a new attitude, which we will only achieve thanks to motivation.
How to motivate ourselves to achieve financial freedom? First we must know the different stages of personal finance that we must go through to achieve financial freedom.
In this article we will talk about the following points:
Without more to add, let’s start knowing our financial future from the hand of Gustavo Mirabal.
Table of Contents.
Financial freedom is a process that ranges from total dependence and financial insecurity to financial freedom. There are a few intermediate stages that ensure progress. Thanks to the changes in habits and the knowledge acquired in personal finances we will be able to change our lives.
Later we will tell you about the stages from financial ignorance to total financial freedom.
It is the lowest phase of personal finance. At this stage, we are unable to reach the end of the month without going into debt. A person in this situation goes straight to bankruptcy. The first step is to become aware of the situation and adjust expenses to move to the next stage.
It’s the point at which we can cover basic expenses using our fixed income and savings. However, any problem can divert us. We have savings to cope with a problem with our income, but not enough to do it for long.
At the point of financial independence, we could cover some additional expenses, such as nights out or extraordinary expenses. You will be able to cover your basic and extraordinary expenses thanks to savings and income.
This stadium is what everyone aspires to. In this case our basic and extraordinary expenses can be covered with our savings. You can live without working. This may depend on savings alone or passive income. It is a stadium that allows you to live without great luxuries unless the accumulated heritage is very large.
Moving from one stage to the next requires the evolution of mental attitude. Getting out of insecurity is not difficult because it is easy to realize when we are besieged by creditors. However, moving into new stages can be difficult because we assume that fixed income is always going to be there to sustain us.
Therefore, we will talk about the attitudes necessary to achieve financial freedom.
Financial freedom doesn’t come alone. To achieve financial freedom, it is necessary to actively seek it, and requires a personal effort. Many people dream of financial freedom but very few get down to work. Do you belong to this group? It is difficult to get to work with any task if we do not know anything about it.
That’s why the first step is to be aware of what personal finance means and what I know about personal finance. Therefore, the first 4 steps are the basis for achieving new personal finances.
These 4 steps to achieving financial freedom are the foundation on which your financial freedom journey will be based. If you successfully go through the first 4 steps (which are not difficult at all) you have passed the halfway point to your financial freedom.
Do you want to know what the first 4 steps are? Let’s get to know them below
Then you will get a very brief summary of the first 4 steps of the 7 easy steps to achieve your financial freedom. Each of the steps that we will mention will be explained in more detail later:
After creating basic habits to achieve healthy personal finances, we will be much closer to achieving financial freedom. They say that “the first step to change is the hardest” and this is real.
If we already manage to save and face our unforeseen events with them, it means that our debts will not grow. Little by little we can reduce the size of our debts, and we will begin to feel that the money “we have left over”. At this time, we must resist the temptation to start spending more.
When we talk about financial freedom, we don’t have enough money. We may be able to treat ourselves from time to time, but that should be within our budget. Financial goals should continue to be monitored.
We cannot lose sight of our goals if we want to achieve financial freedom. But the question we ask ourselves right now. Are the financial goals of this stage the same as those of the first 4 steps? The answer is no.
This is because in the first stage, we were balancing our personal cash flow. In the first stage we were balancing income with expenses, gaining financial awareness, and starting to save. Now that we save, we do not know what we can do with this income.
The first thing is that this saving is going to be formed in a fund to face the unforeseen. But as time goes by, we can face almost any unforeseen event. Then priorities and goals begin to change.
What will be the new financial goals? Next, we will tell you.
Now that we have quantified our expenses and our unforeseen events, we can know how much our savings reach. Some metrics that we must consider are:
Those questions tell us how close or far we are from our financial freedom.
If we have for the payment of the installments of debts and expenses of about 3 and a contingency fund, we are already at a point of financial security.
If we happen to have the payment of the installments of debts and expenses for about 6 months to a year and a fund for unforeseen events, we could talk about financial independence. We can be stable without having income for a relatively long period.
Finally, if we must have an amount equivalent to the payment of our cash debts, all the basic expenses of a year and a contingency fund, we could be talking about relative financial freedom. We talk about relative because that would give us for a full year of expenses and free of debt.
The next stage is total financial freedom. We can only achieve this with a passive income large enough to cover our basic expenses without touching savings, in addition to our regular income. To achieve this stage of financial freedom we will have to go through the next 3 steps of our 7 steps towards financial freedom.
Next, we will briefly show you what are the steps to follow to consolidate your financial freedom. Later we will delve into each of these steps
By following these steps, you can consolidate and accelerate your path to financial freedom. These steps allow you to keep your eyes on goals and away from the money you think is “left over.”
Financial freedom is the dream situation for many. There are people who talk about passive income, but even passive income can vary. They also give us tips to achieve financial freedom.
Therefore, financial freedom includes personal austerity and a new attitude towards life. On the other hand, to achieve financial freedom, the idea that money is bad must be removed from our minds.
Money is not bad, what is bad is that the search, indiscriminate spending, and accumulation of money controls us. If we have a more rational attitude towards money, we can easily achieve our financial freedom, as evidenced by the 7 steps we show in our article.
Financial freedom entails a change of attitude, motivation, values, and life in general. It is freeing ourselves from the yoke of buying as a way of giving ourselves value. We don’t have to involve others in our own vision of life, but we do have to change our own.
If you follow these 7 steps, you will be closer every day to achieving financial freedom. We hope that these tips from Gustavo Mirabal, the financial advisor of athletes, will help you have a happier and quieter life.
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