Last Updated on 20/02/2023 by Steve Wanjie
Financial freedom for you. How will you achieve it?
What is Financial Freedom in Kenya and Africa?
Financial freedom is being financially independent and not having to work for money to live.
It is the ability to live without financial worries.
Financial independence is not about how much money you make but what you do with it.
There are many things that you can do to achieve this goal.
Personal economic freedom is a goal that many people strive for.
There are four ways to achieve it:
1. Create passive income streams through investments
2. Save money and invest
3. Increase your income
4. Reduce your expenses
If you’re not happy with your current financial situation, then there are a few things that you can do to change it.
The concept of financial freedom has been around for a long time, but it has gained more popularity in recent years.
It’s one of the most common goals people have these days.
In this article, we will discuss financial freedom and how one can achieve it.
This article will discuss some of those steps and provide tips on creating a plan for achieving financial freedom.
Why You Should Want Financial Freedom?
Financial freedom is the ability to live without the stress of money.
It is a state where you have enough money to cover your needs and wants.
We can achieve financial freedom through wise spending, saving, investing, and other methods.
Financial freedom is not just about earning more money or getting out of debt.
It is about having enough wealth to not depend on your income or employer for your needs and wants.
1. Start With Budgeting
Budgeting is a fundamental part of financial planning.
It estimates how much money you will spend in the future and how much income you will have to meet those expenses.
The best way to budget is by creating a list of your monthly expenses and then categorizing them into fixed and variable costs.
Fixed expenses are the same every month, such as mortgage or car payments, while variable costs, such as food or gas, vary from month to month.
How do I budget?
Budgeting is a way to plan and control your finances. It is allocating resources to meet goals.
We can define a budget as the plan for how you will spend or save your money over a specific period.
We can also define a budget as the amount you set aside for a particular purpose, such as buying a home, going on vacation, or saving for retirement.
-The first step in creating a budget is determining your income and expenses.
Your income includes salary, interest from investments, and any other sources of income that you have.
Your expenses include items such as housing costs, food costs, transportation costs, entertainment costs, and other recurring bills that you have each month.
If you are unsure what some of these items are, it may be time to consult a financial (coach) advisor.
The next step is to determine the cost of your necessities.
This includes food, clothing, transportation costs, and entertainment.
Finally, it would be best to determine how much you spend on extras like new clothes or a night out with friends.
Once you have identified your expenses, it’s time to create a budget that will work for you and your lifestyle.
2. Save Money by Spending Less
The first step to saving money is to list your monthly expenses.
This includes all the bills you must pay and the cost of groceries, entertainment, and other items.
Once you have all your expenses written on paper, it is time to find ways to reduce them.
Some tips include using public transportation instead of taking cabs or getting rides from friends or family.
This will save you on gas and parking costs, which can add up quickly for those who commute by car every day.
Another way to save money is by making meals at home instead of dining out.
If you are tired of repeatedly cooking the same old foods, try downloading some recipe apps that offer hundreds of different dishes for free!
3. Invest Wisely
Investing is putting money into a financial asset, expecting it will provide income and/or appreciation in value.
An investor can either be an individual or a company.
The return on investment is the amount earned from the acquisition, such as interest, dividends, capital gains, or any combination of these.
The most common way to invest in stocks is by buying shares in a company.
A person who owns shares partially owns that company and earns money from its share when its stock price increases.
The riskier an investment is, the higher its potential return.
Investing wisely is the key to successful long-term investing.
The more knowledge you have, the better you can make an educated decision about how to invest your hard-earned money.
Successful investing starts with understanding what you are investing in and why.
You must know about the company’s business model, management team, product pipeline, etc.
Second, you need to understand how the general economy works.
Consumer spending and confidence levels drive growth in most economies and are a leading indicator of what will happen next for stock prices.
Third, everyone should follow some basic investment principles or at least be aware of them when investing or saving their money for retirement or other goals.
Basic Investment Principles:
- Acquire knowledge on how to invest wisely
- Know your risk tolerance level
- Have an obvious goal on why you are investing
- Have a simple investment plan
- Consult experienced investors
- Start small – take baby steps in the beginning
What are some simple methods of investing?
There are simple methods of investing that don’t require any knowledge of finance or investments – like buying stocks through an online brokerage account, which anyone can do with no financial background at all.
Investing is not as complicated as it may seem.
You can do it, but here are some of the most common methods.
a) Buying stocks
Investing in stocks is one of the most popular methods for investing.
This method allows you to invest in companies without buying their entire company outright.
Bonds are a type of debt that governments or companies issue and they usually offer a higher return than other investments like stocks.
c) Mutual funds
Mutual funds are a collection of investments that an individual or company with expertise in that area professionally manages
Traded funds (ETFs) – ETFs are like mutual funds but trade on public exchanges like stocks. ETFs often.
4. Be Aware of the Consequences of Your Decisions
keywords: financial freedom plan, risks & rewards of investing
A financial freedom plan is a plan that helps you achieve your goals and live the life you want.
It is a way to map out and reach your goals so that you can live the life of your dreams.
They usually made financial freedom plans up of three phases:
-The first phase is setting up your financial goals
-The second phase is saving for those goals
-The third phase is achieving those goals and living the lifestyle you want
The financial freedom plan is one of the most important decisions that you will make in your life.
It will determine how you live, what you do with your time, and how much money you will spend.
You should know the consequences of your decisions.
Investing is not a game; it’s about building wealth for the future.
What are the risks & rewards of investing?
Investing is a high-risk activity that can bring in high rewards.
Investors are connected to the markets, which can be volatile, but there are ways to manage the risks.
The risks of investing include losing all your money, not being able to sell your investments quickly enough when you need it, and not being able to recover from a sudden financial shock.
The rewards of investing include earning more money than if you had kept your money in a savings account and the potential for higher returns than if you had invested in a fixed-income investment like a CD or bond.
The risks and rewards of investing can differ depending on what type of investment you’re making.
For example, when investing in stocks, there’s always the risk that your shares will decrease in value.
That’s why it’s essential to research before investing in any company or stock.
What are the best financial freedom plans?
You are looking for the best financial freedom plans.
You want to know how they can achieve your goals quickly and easily.
Many types of financial freedom plans are available, but not all are equally effective.
The following list includes some of the most popular ones:
- Pension scheme
A pension scheme is a retirement plan in which an employer contributes money to an individual’s pension account, which is invested in stocks, bonds, or other assets.
With the help of a pension scheme, individuals can save for their retirement while they are still working.
It invested the contributions of the employer and employee in various types of assets to generate income during the individual’s retirement years.
Pension schemes offer many benefits, including:
a) A secure source of income after retirement
b) A potentially higher level of income than if you had saved on your own
c) Access to professional investment management services
- Retirement scheme
A retirement scheme is a method of saving money for the future.
It invested the money saved in stocks, bonds, or other investment vehicles expected to generate income.
The most common type of retirement scheme is a pension scheme.
These are schemes where the employee pays into the plan and then receives an income from it when they retire.
- Investment scheme
An investment scheme is a business model based on the principle of involving investors in generating profits.
Investment schemes are not new to the world. Some ancient cultures, such as ancient Rome and Greece, used this investment model to generate revenue for their governments.
The common investment schemes include:
1) Direct investments in stocks, bonds, or other assets.
2) Investment in a fund that invests in stocks, bonds, or other assets.
3) Investment in a company through purchasing shares (equity).
4) Investment through a donation to a charity or non-profit organization.
5) Investment with an initial public offering (IPO).
6)Investment by leasing property to another individual or company for periods of time ranging from a few days to several years can be lucrative, albeit risky.
- Personal savings plan
Personal savings plans are a type of investment account that banks and credit unions offer.
Savings plans are often used to save for retirement, emergencies, or purchase a home.
The funds in the account grow tax-free, and you withdraw anytime without penalty.
It can be a short-term or long-term plan. This plan aims to help you save money and reach your financial goals.
- Tax-free savings plan
A Tax-free savings plan is a type of account that you can open with a bank, credit union, or brokerage firm.
It provides a way to save money for the long term without paying taxes on the interest income from these investments.
Tax-free savings plans – ‘TFSAs’ or ‘RESPs.’
Some of the best financial freedom plans to consider are:
– Roth IRA
– Traditional IRA
– SEP IRA
– SIMPLE IRA
The Ultimate Financial Independence vehicle
The ultimate method you need to get financial independence is starting an income-generating activity, i.e., a business.
Financial freedom is the state of being free from financial worry.
It is a choice to live a life without the stress of financial limitations.
One can achieve financial freedom by living within one’s means, eliminating debt, and investing wisely.
There are many ways to achieve financial freedom, but no single path fits everyone.
The best way to find your own path would be to start with an assessment of your current situation.
This will help you identify what you need to do in order to achieve your goals and what steps you should take next.
It is a state of not having to worry about money, having enough money in savings and investments so that one can live comfortably for the rest of their life without working, and making enough money that one can do what one wants with their life.
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Steve Wanjie is a digital marketing specialist, SEO Expert, expert article writer, blogger, sex educationist, and businessman. He is the founder of Dijito Marketing and Laikipo.com. He works and lives in Nairobi Kenya.