Financial independence means different things to different people. To some, it means having enough money to buy whatever they could ever want while to others it means never having to work again. However, one thing is common amongst these two groups of people and it’s that when you are financially independent, you will be free from money worries. If you ask me, here are the three steps anyone can take to reach financial freedom!
Step #1: Develop A Monetizable Skill
If you want to become financially free, then you must have a skill that can earn you money aside from your regular 9 to 5 job. Let’s start with the fact that you probably don’t like your 9 to 5 job. Maybe you feel like you are in a cage each time you are at your regular 9 to 5 job and only experience freedom on the weekends when you are with your friends. Well, this is a sign that working a 9 to 5 job may not be for you. It may not allow you to do the things that you have passion for and the amount you can make will be limited to your salary. Luckily, you can develop monetizable skills that can earn you more money than you are earning right now. Firs, I want you to think of all ways making more money would change how you presently live. Do you think it would make your life better? If your answer is yes, that means you need to develop a skill that you can monetize to become financially free.
The next question that most people ask is “what skills can I develop to make more money?” There is no single correct answer to this question. There are several skills that anyone can learn and use to start making money from. A simple search on Google will give you hundreds of options to choose from. However, your passion can be a guide in your quest for a new monetizable skill. The things that you love doing and find easy to do should be the first option you should consider when you want to learn a new skill. For example, if you love teaching and you are good at explaining complex subjects to people, you could develop the skill of being a tutor.
Often, people don’t see their talents as skills even though it has the potential to make them money. They just see it as a normal thing that they love doing. Your passion or talent can be anything. If you are good with the way you interact with others, it is a talent. You can develop a marketing skill if you can socialize with others easily. And if you do not know what your talent is, you may want to find out from the people around you. People around you can often see you in a different light than you see yourself and can help you identify where your strengths lie. You can also assess yourself based on the activities that you like to do the most especially when you are outside of work. It may also be the thing that you talk about all the time or the thing that people ask you to teach them.
Once you find out the skills that you want to develop, make sure it is something you can make money from. To do this, you may need to look around for people who have similar skills and are making money from them already. Do whatever it takes to learn from them and see how they were able to develop and package their skills to start making them money. That means your skill must be in high market demand before you can make money from it. Because even if you have multiple skills and no one needs your services, you are still not going to be financially free using your skills. Now, here are some skills you should consider honing.
One of the major skills that has always been relevant and still relevant is teaching. Every day, people seek knowledge and need someone to help them find out what they are looking for. If you have the skill of understanding complex topics and you can teach them in such a way that a novice would understand then you can position yourself as a tutor. There is no limit to how much you can make as a teacher even if you are still working a 9 to 5 job. Not to mention, there are ways you can scale up this skill that will free you from having to trade your time for money. You can record yourself teaching a subject and sell it as a video course rather than limiting yourself to real time consultations. This strategy has the potential to reach more people than teaching one person at a time.
Another skill that people neglect are consultation skills. If there is anything you know how to do well, there will be people who want you to guide them and help them achieve the same results that you have. For example, many companies are in need of a consultant that can help them deal with employee concerns such as employee engagement and training. Ask yourself, do you know a certain topic that others could benefit from. Your understanding or experience doesn’t even need to be leaps and bounds more than your clients but as long as you can provide value you can use this skill to get paid.
One other way to make money from your skills is to become a freelancer. The internet has made it so easy to become a freelancer now. All you have to do is to position yourself and look for potential customers that you can work with in your free time. You don’t have to quit your regular job to become a freelancer. You can easily combine it with your regular job and freelance only when you are free. Freelancing will require you to trade your time for money but you can avoid this by scaling your business. You can build an agency and outsource to other freelancers to help with your freelance job or works.
Ultimately, whatever means you can muster to make more money will put you in a position to streamline your journey to financial freedom especially when paired with the advice I am about to give you in step #2.
Step #2: Adjust your spending to allow for saving and investing
Sometimes what you need to be financially free is not more money but more financial discipline. You must have heard people say that the more you make, the more you spend. This means that every time they make more money, they increase their spending. Maybe you are like that too. How do you act when you have extra money left over at the end of the month? Do you think of buying more gadgets or eating out at expensive restaurants a few more times than normal? If you do this, then it shows that you have a mentality that will stop you from becoming financially free. Simply put, you should not spend more money because you earn more money. If you want to be financially free, then you need to adjust the way you spend money.
So many times, people wonder how your money vanished even though you were the one who spent it. This happens because you do not plan how to spend your money. Someone who makes $3,000 in a month but has monthly expenses of $2,700 is not better than someone who makes $1,500 but spends only $700 in a month. The person who makes $3,000 only has $300 left at the end of the month while the person who makes just $1,500 still has $800 at the end of the month. To be financially free, you have to spend a lesser amount than you earn.
Many high-income earners are not financially free because they have bad spending habits. Let me explain this with the example I just gave. Imagine if the person who earns $3,000 per month spends only $700 in a month, he would still have about $2,300 to save and invest at the end of the month. That is about $27,600 every year. This amount of investment each year can certainly help you achieve the financial freedom you desire over time and I will now go through some practical steps you can use to adjust your spending allowing you to save more and ultimately invest for the future.
The first step is to set a long-term goal for your finances. You may decide to save money for a vacation, emergency, or even to buy a house. Whatever your goal is, it may help you be more focused and disciplined to spend less and save more money. The next step is to create a budget. A budget should help you to distinguish between your needs and your wants and make you spend more wisely. Also, don’t go out to buy things without having a list. Going to the market without a list makes you buy things that you do not need almost 100% of the time. You may end up buying things you will never use and this is a waste of money. Another thing you should learn to do is to delay buying things that you are not sure you need. If you see something in a shop and you are having doubts about whether to buy it or not, the best thing to do is to leave it for at least 24 hours and mull over the purchase. Most times, you will realize that after 24 hours you are no longer interested in buying it.
Step #3: Plan out productive endeavors for your financially free years
The third step to financial freedom is planning out productive endeavors for your financially free years. The goal of financial freedom is not to retire and stop working but to have the freedom to do whatever you want. Ask yourself the question that if money was not an issue, would you still be doing what you are doing right now? If your answer is yes then that means you might have discovered your purpose in life and the job you are doing right now is helping you to fulfill that purpose. But if the answer is no, then ask yourself what would you do differently.
There are people whose life ambition was to become a painter but couldn’t continue because of money. They had to forget their dreams and get another job just to be able to pay their bills. The goal of financial freedom for someone like that should be to make enough money to stop doing what they are doing right now and do what they love.
If you don’t have to worry about money again, you can do what you love to do and be happy even if you will not be paid for doing it. You can join a volunteer club or a not-for-profit and contribute your best without any boss telling you what to do. This is why the happiest people are not always the richest people but those who have found purpose and enjoy what they are doing.
Purpose helps you to find meaning in life and takes away emptiness. No matter how much you make, it will not be able to fill this emptiness without purpose. People who do not have purpose may sacrifice the people in their lives for financial freedom only for them to find out at the end of the day that the people in their lives matter more than any amount of money. That is why you may drive the nicest car but without a sense of purpose and connection with others, you may find out that you have no one to cruise around with because you were too busy trying to make money when you should have been pursuing true happiness instead!