In this article, you will learn why financial freedom is important in fulfilling your dreams and the steps to reach this independence.
A wise man once said, “Some people are so poor that the only thing they have is money.”
You must have read about some of the wealthiest men in history who keeps gathering and gathering money until their downfall.
Now, that is not financial freedom.
You also must have heard about people who are extremely rich but lack the health to enjoy it. That also is not financial freedom.
So, what is financial freedom?
I defined financial freedom as a state of life where you earn without your input and can afford to the things you want with the people you love.
Now this definition is in two part:
One is about taken care of your bills. Yes, it is a point where your income can take care of your needs. It does not mean you are rich but you can afford your needs without a second thoughts.
The second part talks about living your dream. This is the most important aspect of financial freedom. Of what good is riches if it wouldn’t allow you the freedom needed to live your dreams?
You must understand that you make money not to impress or oppress but to liberate yourself from financial concerns of everyday living.
Money gives you choices and so you should use this privilege to set yourself free. That is why we call it financial freedom.
How much do you need to make to reach this height?
There is no specific amount as it is not majorly about some money stashed somewhere like a politician who loot the countries wealth.
It is about your lifestyle habit and having a flow of passive income that keeps running without presence or input.
Let see what steps you need to take to attain financial freedom.
9 Steps To Financial Freedom
1. Write Down Your Goals
Albert Einstein said, and I quote, “If you give me 10 hours to cut down a tree. I will use the first six hours sharpening the cutlass.”
While that quote is about preparation, it also speaks to the need to write down your goals.
You need to know why you want financial independence and the set time you wants to reach this goal.
Are you doing this because you would like to spend more time with your family? Are you doing this because you would love to volunteer for society development?
Whatever it is you must know why you want to go this journey.
Now that you know why, how do you get there?
In setting your goals you should make it SMART and not exaggerate it. You should set goals you know it is possible and attach timeline to each.
Personally, I have learnt to make my goals actionable rather than they looking like a wish.
Example of a Normal Goal: By this time next year, I will have N1.2 million naira in my account.
It looks generic and more like a wish. There is no actionable plans in it.
Example of a SMART Goal: Starting 28th of this month, I will save N100,000 every month from my poultry business. So that by this time next year I will N1.2 million naira in my account.
Now, that is a measurable, realistic, and timed goal. It focuses more on the steps to reach the goal rather than some wishful imagination.
Remember, how who fails to plan; plan to fail.
2. Own Multiple Sources Of Income
The next step to attaining financial independence is to have multiple streams of income that brings you money on a steady basis.
If you go back to our example of SMART goal, it talks about the source of the N100,000 – the poultry business.
Your salary may not be enough to help you reach your financial independence. In fact, it is not enough.
I have always known this but not until I received my salary at around 7pm some years back. And before 5am the next morning, all I had in the account was the transport for the week.
Compulsory bills upon bills that I need to pay. It was then I knew I can’t continue this way. I need to do something before something happens to me.
You need to start a business, invest in the financial markets, receive rental income and more.
One single source of income cannot get you there in this world of economic uncertainty.
3. Work With A Budget
Working with a budget is another of the steps to your financial freedom.
Last Sunday, a friend asked me, “How do you do it that you always have enough at every situation?”
It is not that I earn more than him. Nor am I expose to opportunities that he is not aware. Maybe, I am only careful of my spending.
And here is my reply to his question…
“I realized I can be emotional with spending. Whether spending on myself or giving out without justifiable reason, I can go the extreme most times.
In order to curb this, I promise myself I will not buy anything I have not pen down and have a budget for. Because I realize, it is easier to see the whole picture when on book and then strike out those that are less important.
Economist call this opportunity cost.
Then beyond, writing down, I also use one of the best savings apps to lock my money to a particular event in the future. Let me give you an example.
I know my data subscription expires every Wednesday. Since this is an important need in my online business, I can’t strike it out.
What I do is to use this app and fixed the data amount for four Wednesdays in the month. Sometimes, I go as far as setting for twelve Wednesday (three months).
By doing this, it keeps my use of data in check. So, I am sorry if I couldn’t watch the trending videos on the internet. I need my data to build more online businesses that pay.
So if you come to me for money and I told you I don’t have. It means I didn’t include you in my budget.
4. Start Automatic Saving
If you ask me, “Do you like to save?” My answer is NO!
But how about, “Do you need to save?” My answer is YES!
You don’t need to like savings, but you need to be saving. And this is not just you are saving for raining days.
No, if you work with a budget, maintain a healthy lifestyle, signup with the best insurance companies, you should not be to concern with raining days.
The savings I am specific about here is saving to fund a project. It is the saving to pay off your debt and start investing.
I bought a book some time ago with the name, “The Millionaire Next Door”. This book explains how average income earners saved their way up.
Some months later, I read a book, “The Automatic Millionaire”. Such a wonderful book.
While the first book focused more on why you need to save backed with testimonials, the second explains how you should save.
The author explains how hard it is to remove a certain percent of your income to save because of the many expenses around you.
Instead, automate your savings. That is, let the money save itself at a certain date.
So, if your salary comes every 29th, you can ask these savings apps to debit you every 30th. This makes it automatic and avoids your overthinking.
5. Pay Off Your Debt
The Bible says that the borrower is slave to the lender. May you not borrow in Jesus Name.
For some reasons I could not understand, I hate debt with everything in me. It has a way of making feel uncomfortable around the lender.
It is the reason why I avoid it whether small or big. You also should avoid it because it can easily tangle you.
Some say there is a good debt and a bad debt.
According them, a good debt is the money you borrow to invest in an asset that produces return.
While bad debt is the money you borrow to buy liabilities with no financial return to pay back.
Whichever, both still has “debt” in them. It is the reason I avoid loan apps.
Normally, I wouldn’t anything to do with bad debt – borrowing to buy car, do marriage and more.
But there was a time I was involved in the “good debt”.
A contractor gave me a project to design a website. I got to know that the NGO company who owns the website does not pay until a project is complete.
To reduce my risk being my first time working with this company, I asked the contractor who is now a middleman to give the money for the project.
Once my company receives the payment, I would return it.
Do you know even with this scenario, I was still not comfortable with the fact that I am owing? Immediately I received the money, he was the first person I paid with lots of additions.
The next time another project came from the same company, I did it with my money.
Please, in all you do, avoid debt. If you have some pending, pay them off as soon as you can so you can breathe well.
Paying off your debt is one of the most important steps to financial freedom. Please take it seriously.
6. Start Investing
Show me a man who has attain financial independence. And I will show you a man who has many investments and businesses.
Like I told you earlier that the ultimate goal of savings is not to just to save but to fund projects.
Those projects are investments.
When you get to a point where you begin to feel you have some extra cash, then, it is time to start looking for another investment.
And what kind of investments is the best for you? Seriously, I don’t know.
We all have different taste as to what kind of business we will want to involve ourselves in.
But three rules I must share with are:
- Never lose your capital for it is your strength.
- Only invest in what you know and can influence to an extent.
- Slow and steady is better than fast and shaky.
If you follow those rules, you wouldn’t make mistake with your choice of investments.
It is the ignorance and greediness of men that make them bite more than they can chew.
7. Prioritise Your Health and Family
Here is another of the greatest steps to financial freedom.
People say, “Health is Wealth”.
No, I say, “Health Is A Greater Wealth”.
A man diagonize on the sick bed with cancer of the brain can’t be thinking of how to make more money.
In fact, cancer is too much. Only malaria can humble a man that all he thinks is how to recover. Nothing matters to him at that moment.
It takes the living to think about financial freedom. You can read this article today because you are alive and in a good state of mind.
Don’t joke with your health. Don’t experiment with your health because you wouldn’t like the result.
I read a quote somewhere and it says, “As youth, we sacrifice our health to make wealth. Then when get old, we want to sacrifice our wealth to regain our health.”
My business needs me to sit all day which is very dangerous.
To avoid waist pain, I bought a laptop stand to aid my working while standing.
Also, to avoid eyes issues, I turned on the night mode and eye comfort shield on my phone and laptop.
Then, to improve my social life, I stop work by 3pm, call friends, and go to the field to play ball. This way, I meet and interact with people.
Yours can be anything sport or game provided it meet these two conditions:
- Has nothing to do with phone, laptop or TV screens.
- Allows you to move your full body and not sit at a place.
Last, be far more careful of what you eat. Choose proteins, fruits and vegetables.
8. Give To Those In Need
To the glory of God and to the shame of the devil, please give to those in need.
The bible says that the needy will always be around you. Why will they always be around you and not someone else?
It is because it is you whom the Lord have shown mercy so you can extend your hands to them.
While it is good to budget, save and invest; it is much better to give.
Now, I am not asking you to be wasteful or give as though you are their God. No! But when you CAN help, please help.
When you give, you increase. I don’t how it works and I don’t want to know.
From your income, set a particular percent to bless others.
This portion is not for your immediate family member, those are your responsibilities. It is for people who needs help.
While you are seeking financial freedom, others can’t tell what to eat tomorrow.
Please, do the little you can in your neighborhood and let the Lord breathe on it.
So that when you also cry to God, He can answer you in speed.
9. Never Stop Learning
My people perish for lack of knowledge.
I end with this because it is the greatest among of the steps to financial freedom.
Because this whole article are years of my learning from others and my own mistakes and successes.
The same thing with you. The more you learn, the more you earn.
And learning in this case is not about academic books but of resources relevant in your field of need.
Whenever I am facing challenges in a particular area of my life, I look for a book in that area and read.
It was after reading a book that I started investing in real estate.
So, get books on financial education, attend seminars and most importantly signup with a mentor.
Frequently Asked Questions
1) What does financial freedom mean?
It is a state of financial independence where you have income sources that takes care of your need without your presence. At this level, the money keeps coming with little to no effort from you.
2) Why Financial Freedom
You should aim to attain financial freedom as it a state of peace. It gives you the time and effort needed to do the things you want with the people you love.
3) Is Financial Freedom Possible?
Yes, it is possible as you can see in some people you know. I encourage you to begin this journey today. You will be happy you did five years from now.
Conclusion On Financial Freedom
We have come to the end of this class.
And the best gift you can give to me is that you follow all financial freedom steps mentioned here to reach your dream.
Like Pete Edochie will, “Let the young man go into the forest and hunts. If he kills the elephant, his poverty ends. If the elephants kills him, his poverty ends”.
You biggest regret tomorrow will not be the things you did not know but those you know and never act on.
I will be happy that you act on these passive income ideas to reach to your financial freedom dream.
Take care and goodbye.
