What is financial freedom? For most of us, it involves a certain amount of stress-free living and financial security. One financial freedom benchmark is having the financial stability to do whatever you desire in life without needing to stress about your bank account getting drained. Financial freedom would be totally awesome to be able to take that wonderful trip to Tahiti with your family while never worrying about not coming back to work. Or having enough money to pay off your house and have extra money for holidays and fun.
If you are thinking about how to achieve financial freedom, you will need to determine whether it is through saving or investing. There are a number of excellent financial resources available both in the real world and online that can help you with either goal. However, many people end up using investment options such as the 401(k) and IRA. The following is a brief description of the pros and cons of these investment options.
Using a conventional savings account to get started on your journey to become financially free, can be an extremely wise choice if you are confident you can stick to your new plan. The key to becoming financially free is knowing how to invest and you will need to educate yourself on how to invest in order to make this happen. In order to begin investing you will need to open a traditional savings account and get started saving money. It is important that you start saving early as there is a large amount of time you will need to save before you see any significant returns. An initial savings plan of say $1000 should be enough to get you started on your journey towards financial freedom.
Another way to get started on your way to financial freedom is to invest in a Roth IRA. This is another type of IRA, which you can open online. There are a number of benefits to using a Roth IRA and they include being tax exempt, having no income or capital gains taxes, and you can accumulate interest each year and contribute whatever amount you wish to. A Roth IRA is a good way to save for retirement and if you do not have enough to qualify, there are other types of IRAs which offer a similar benefit when it comes to retirement planning.
If you are at the point where you want to start building a nest egg for your golden years then you may want to consider opening up one of the many retirement accounts available to you. Most of these retirement accounts let you build your own investment portfolio and the best part is you only pay tax on the interest you earn, which makes it easy to save money and avoid paying taxes on your investments. However, it is important to remember you will need to have a financial advisor with you whenever you do take this route to getting started on your way to financial freedom.
Getting involved in real estate can also be a great way to get ahead and get into the realm of financial freedom. You can buy the property to use as rental properties or you can buy one to live in yourself. Either way you can make an extra income by leasing the property you own or by charging tenants extra for using your space. Building a portfolio of real estate can also be a long term investment and you can eventually become a landlord by investing in multiple properties. Building passive income is something that can be done throughout your entire life.
Another route to get into financial freedom is to look into various investment options such as stocks, bonds and the stock market. All of these investment options have different pros and cons but some of them are more stable than others. Stocks have been known to offer some very good returns so this is an option worth checking out. However, there are also risks involved in this type of investment and you need to be aware of what is going on before you decide to get in. If you don’t have a financial advisor, this can be a scary thing to navigate so it is important to learn more about this type of investment before jumping into it.
Debt is another way to get ahead and achieve financial freedom. It is the fastest way to put you in debt and the hardest to break free of. Debt consolidation is a great way to start working towards debt freedom because you can combine multiple loans into one loan. This will help you manage your money and consolidate your debt. You can look like you are in control when you consolidate because you can put aside the loan each month and only use what you need. You can then use the newly combined monthly payment to pay off the debts you have consolidated.