Updated: June 7, 2023
How do you become financially independent? What are the keys to achieving it? What are the characteristics of financially free people?
Reaching financial independence is a marathon. And just like preparing to run a marathon in real life, you need to understand some basic principles for success.
Below are 10 quick tips, which I’ve learned in my own journey. And I hope these can help you with yours.
1. Budget
You’ve got to learn how to budget your cash flow. You need to be in control of where your money goes, or where it shouldn’t.
The most important key to unlocking financial freedom is the ability to spend less than what you earn. It is the foundation of all financial success.
2. Social Network
Who you spend a lot of time with is important. Your social network can greatly influence how you think and how you deal with financial obstacles and opportunities.
Spend less time with people who are toxic to your financial well-being, and more time with those who inspire and motivate you to become better.
3. Leverage
The journey towards financial independence is long, but you can move faster if you know how to properly leverage your time and money.
Learn to invest. Build sources of residual or passive income. Find ways to make your money work for you.
4. Debts
Debts can be a powerful form of leverage, but not if it’s bad debts. Know the difference between good debts and bad debts.
More than financial debts, you should also avoid as much as possible, having emotional debts.
Because as my mother wisely advises, “Mahirap bayaran ang utang na loob.”
5. Knowledge
There’s a whole lot of free and accessible information out there that could unlock income opportunities for you. Find them and educate yourself.
As Benjamin Franklin would say, “An investment in knowledge pays the best interest.”
6. Decisions
What you do today determines what happens to you tomorrow. Or more accurately, your financial decisions today determine what happens to your wealth tomorrow.
Thus, it’s important to be aware of your beliefs about and behavior towards money. One bad financial decision can lead you to a financial disaster.
7. Patience
It’s good to invest. And congratulations if you are investing your money. But that’s just the first step towards achieving financial independence.
The next, and more important aspect of investing, is having the patience to let your gains grow over time. This means resisting the temptation to cash in too early because of greed or fear.
8. Health
Again, a wise advice from my mother, “Ang perang kinikita mo, baka maging pambayad lang sa pang-ospital mo.”
So always take care of your health. And not just your physical health, but your mental health as well.
9. Focus
Where your focus is today, becomes your future tomorrow. If you pursue many and different goals today, you’ll most likely end up nowhere and with half-baked goals tomorrow.
There are a lot of opportunities around, and the best way to succeed is to choose one and concentrate all your efforts towards achieving it. Avoid the spaghetti mindset.
10. Action
The opposite of success is not failure, but inaction. It is only by doing and applying what you learned can you ever make a change in your life, and reach financial independence.
Remember that those who succeed in life are often those who failed but did not quit. So don’t be afraid to fail. Instead, be afraid to find yourself in the same place where you are several years from now because you didn’t take action.
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More golden advise. Number 9 is of particular importance to us as we are considering so many opportunities at this time. We look forward to being able to begin operating our existing three Philippine based business ventures as the COVID-19 lock-down comes to an end. We have, during the “down-time,” thought it wise to consider finding at least one more “virus-proof ” local business to engage in, if bad times were to return. Our work and investments from offshore treated us well but a dependable ” bug-proof ” local income will be most welcome if there is a next time. Going slow and staying focused will be important, that is for sure !!!