6 Rules I Applied To Become Financial Independent
To become rich, think like a rich
You don’t need to sell your soul or do dirty work to achieve financial freedom.
The ultimate truth lies within you and your relationship with money.
For most people, financial freedom means the ability to buy bigger and better things, which usually translates to more material possessions.
You don’t need to live like a poor to become rich.
Of course, you need to prioritize your comfort over the hustle, but at what cost?
To earn more money, you usually end up working longer hours, compromising your health, family time, and life’s simple pleasures, just to make a few extra bucks.
Recently, I met someone who skips buying daily coffee just to save $6 every day.
That translates to roughly $2K a year.
This is where most people never realize that if coffee makes you focused and keeps you in a flow state, it’s not a waste of money but an investment.
So instead of skimping on life this way, think like a wealthy person.
And then, it’s all about your mindset.
The best way I’ve found to protect my financial mindset is with these short rules.
Hopefully it helps you reach financial freedom too.
1/ The Power of Compounding
Invest money each month, or every week, whatever works for you, and keep investing.
The secret to compounding is time.
So keep investing small amounts for as long as you can.
2/ Buy Blue-chip or S&P500 stocks and hold
The number one rule is to buy assets that can help you in the long term. If you’re not 100% sure about trading, don’t play the gamble.
It’s wise to keep investing and never try to time the market because you’ll probably never succeed.
So hold your stocks as long as possible and reassess every 6 months to make sure it’s still a viable option for you in the long term.
3/ Build a portfolio slowly and steadily
Most people go broke overnight because they don’t have a solid portfolio to back them up.
What I’ve learned from rich and wealthy people is that their companies or businesses can go bankrupt, but they hardly lose their personal wealth.
Why is that?
It’s because they have a solid cash flow and never keep all their eggs in one basket.
Diversify your investments as per your goals and needs.
“The fact is, none of us really has a choice: We are all playing the money game whether we want to or not. The only question is: Are we winning?” — David Bach
4/ Credit cards are good until it’s not:
Useful yet the higher credit card debt can trap you.
Credit cards work wonders because you don’t need to pay immediately, and you usually never look at them until you get your monthly statements.
And there is always a 25-day delay to pay your monthly bills.
However, most people get trapped into it to afford their aspirational lifestyle.
Reassess your credit card debts and pay as soon as you can to avoid higher interest rates.
Use credit cards that have higher rewards and lower APRs.
5/ Money isn’t evil, but people make it so
Working your entire life, having to be busy all the time is evil.
And in today’s world, money is important, and we should stop demonizing it.
It’s necessary, as much as air and water, to live a comfortable life.
“The starting point of all achievement is desire. Keep this constantly in mind. Weak desire brings weak results, just as a small fire makes a small amount of heat.” — Napoleon Hill
6/ Challenge your mindset on Money
Our mindset about money is mostly influenced by how we are raised, what our parents and family think about money and how they use it.
And it could turn out good or bad, both ways.
It’s okay to challenge your beliefs and mindset about money and how it works in the real world.
Read books and follow people who have reached where you want to go.
Lastly,
You’re not bad at something; you’re new to it.
Keep practicing the skill and learn as you go forward.
There is no one way, choose the way that works best for you.
Above all, never let money compromise you from achieving the happier, healthier, and joyful life you always dreamt of.
What are you going to pick, share in comments.
Be Bold
Be Courageous
Be Your Best
This article is for informational purposes only and all views are my personal. Consult a financial expert before making any major money related decisions.