Shulay Nunez and Melissa Carpio
Professor Philomena Adams
Composition I
November 2nd, 2020
Financial Freedom
We have become accustomed to thinking that financial freedom is a kind of
unattainable utopia. In fact, many people think that only a privileged few with a very
high income can enjoy financial freedom. However, this belief is completely wrong.
Mostly because financial freedom is not so much about accumulating a lot, but about
knowing how to manage it. According to Robert Kiyosaki, “Financial freedom
basically consists of having enough economic means to cover all your needs in a
certain period of time, without depending exclusively on a salary.” Today we will
know some steps or tips to achieve this financial freedom.
A first step to achieve this is: Invest your savings. Remember that money should
always be producing more money. So don't leave your savings under the mattress
and invest everything you have left over. That way you will get two effects: You
don't spend your savings on unnecessary things because you don't have them
available. And the investments will generate more income in the form of returns,
interest or dividends. We know that when money is idle, easily accessible and has no
destination, it is easier to spend it irresponsibly and unnecessarily.
You can invest in certificates of deposit at your bank, which will generate interest
depending on how long you leave your savings in the account. We all know that real
estate tends to increase its value over time, so another option may be to invest in real
estate, you can rent it and generate extra income and after a couple of years you can
sell it at a higher price than the one you bought it; it is worth mentioning that if you
want to invest in real estate it is preferable that you already have your own.
Second, pay your debts as soon as possible. After paying your debts, most people
feel relieved. If you have a debt of $50,000, even if you have $30,000 in the bank,
you won't feel financially free because you still owe 20,000 euros. And although
paying someone else is not as satisfying as having the money in the bank, doing so
will bring you closer to financial freedom. There are two main ways to pay off a
debt: Snowball strategy, which is when you pay off the smallest debt first, and
Avalanche strategy, which is when you pay off the debt with the highest interest rate
first.
When choosing how to get rid of debt, you should also consider what the most
important debt is, for example, mortgage debt. There are some people who don't
consider a mortgage a debt, however, let's remember that a debt is when we owe
money to an entity or person, so yes, it is a debt. This is one of the most important
debts to keep in mind if you want to keep a roof over your head. You can create an
automatic payment from your bank account, so you never forget to pay it.
Paying off debt takes a big burden off your shoulders. After you've paid off your
debt, you'll see the amount of money you have in the bank increase. It's an incredible
feeling to see the number go up (even if you saw it decrease at first), and it keeps
you motivated to keep growing.
Last but not least, it creates additional sources of income. If your regular job is not
enough, you should look for money by doing more jobs in your free time. Some
experts recommend having seven sources of income. If your income is based on the
time you work, you are limited by the hours of the day. So, some profitable ideas for
additional income may be: Become an Uber driver; be a virtual assistant, helping
someone with their virtual business, answering DM or posting; create your own
virtual store. Fortunately, your seven sources of income can come from the same
source. For example, if you are an e-commerce expert, your seven sources of income
can come from the creation of seven different virtual stores. And remember: you
don't need to start with all seven at once, you can develop them over time.
Keep in mind that life is short, it's not all about saving all your money until you're
65. You can enjoy life while you are alive. That is, you can also buy experiences,
not things. Ultimately the things that will help you live a fuller life will be the
experiences you have and not the products you own.
References.
1. https://www.investopedia.com/articles/personal-finance/112015/these-10-habits-
will-help-you-reach-financial-freedom.asp
2. https://www.daveramsey.com/blog/what-is-financial-freedom
3. https://www.moneyunder30.com/start-investing-with-little-money
4.https://money.stackexchange.com/questions/47328/am-i-considered-in-debt-if-i-
pay-a-mortgage
5.https://www.forbes.com/sites/jrose/2017/11/02/different-sources-income/?
sh=a7740a137bbe
