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Tips On Achieving Real Financial Stability

Wednesday, Aug 26, 2020, 7:54 am

Many people dream of possessing enough money to fund the rest of their lives without the need to maintain full-time employment. Some individuals who achieve the goal of financial stability do so by earning money and saving over time. While others are able to start businesses that satisfy their income needs but do not require their daily presence. 

In any event, the following wealth building tips will help you along your path to financial independence. 

1.Avoid Debt

The accumulation of consumer debt works directly against the goal of financial independence. When you use the credit available to you to buy consumable goods, your efforts are much more likely to enrich big banks than provide you with financial stability. 

Automobile loans, payday loans, and credit cards are all financial encumbrances that should be used sparingly. An important first step on the path to financial independence is to eliminate high-interest debt so that the money you earn can work for you and not big banks. 

Avoid Debt-Tips On Achieving Real Financial Stability

2.Forget The Joneses

One reason you may find yourself spending more money than is necessary is the need you feel to keep up with your family and friends. But is the quest to accumulate material possessions the reason we work hard on a daily basis? 

Most of us do not need a mansion or a luxury vehicle to maintain happiness. A modest house and vehicle are more than enough to facilitate a comfortable life. Do not fall for the commercials you see on television that encourage you to view life as a competition to purchase the most expensive vehicles and gain prestige through material possessions. 

Ignore the Joneses while you build your financial future. This approach will help you take a lead in a race that is truly worth winning. 

Forget The Joneses-Tips On Achieving Real Financial Stability

3.Spend Less Than You Earn

A major key to success financially is the discipline to spend less money than you earn. The first two tips will put you well on your way to achieving this goal but it will still require diligence on your part to complete the mission. 

Record the money you spend over a month. You can then eliminate spending that is not necessary. 

Do not forget there are two sides to this equation. It is just as important to keep an eye out for additional income streams as it is to save the money you already earn. 

Spend Less Than You Earn-Tips On Achieving Real Financial Stability

4.Pay Yourself

Despite the selfishness this tip may suggest, you will need to think of yourself first if you plan to reach a reasonable level of financial stability. Put simply, your savings need to take precedence over all other spendings in your life. Money should be delivered to your savings account before the rent is paid, the bill for utilities is settled, and any groceries are purchased. 

An employer-sponsored 401K plan is an excellent way to get started with your savings. Your contribution to the plan will be taken directly from your paycheck so you do not have to worry about forgetting to contribute to the plan. Once you train yourself to live only on the money that remains after you fund your savings account each month, you will be well on your way to achieving financial stability. 

Pay Yourself-Tips On Achieving Real Financial Stability

5.Buy A Home

Many financial experts will tell you that overpaying for the car of your dreams is a sure way to thwart your plans for financial independence. But paying constantly increasing rents over the course of your life could be just as destructive to your financial health. 

Home ownership is a dream of many families. And if done correctly, purchasing a home can further you along the path to financial independence. Before buying a home, Gavin Harrigan from says that you should have stable finances, have saved some money to put towards buying a home, and do your research on what area you want to live in and the prices homes are selling for there. It is also a good idea to make sure your monthly house note is no more than 30 percent of your income. 

It can be quite tempting to buy more house than you can afford by taking advantage of no money down deals with interest rates that will later rob you of your financial freedom. Do not fall victim to this temptation. When you make your home purchase, put down the money necessary to assure a decent interest rate and do not accept a payment structure that exceeds the 30 percent threshold. 

Buy A Home-Tips On Achieving Real Financial Stability

6.Income Generation Through Assets

Once you have accumulated a significant amount of savings, you need to invest in income generating assets. The stock market has proven to be solid over time and many people have found the financial independence they desire by stock market investments. 

Other investments that will help you along the road to financial stability is investment properties, collectible art, and other appreciating assets. Spend your money on things that will be worth more money years after you purchase and not on things that are worthless after a year of wear or use. 

Income Generation Through Assets-Tips On Achieving Real Financial Stability

7.Continue Investing

A long-term commitment to investing is just as important as the initiative necessary to begin investing. The stock market, in particular, is an investment opportunity that you must stick to during good and bad times. You may be leery of purchasing a stock that is losing value. However, this is necessary if you want to profit on the recovery of the company. 

You should invest no matter the state of the market. This strategy will allow you to build a steady source of wealth over time. When your retirement years are in view, you can adjust the allocation of assets to decrease any risk and uncertainty. 

Continue Investing-Tips On Achieving Real Financial Stability


8.Flexibility Is Key

You should always remain flexible enough to adjust your spending to fit your needs. Different times in your life will present different challenges and you must be able to deal with these challenges when they arise. For example, if you get laid off from your job, you will need to cut spending significantly. 

A stock market plunge could result in you losing half your net worth on paper in a matter of months. Do not panic and withdraw money during these times. Stay the course and get a part-time job for a while if necessary. Developing this flexibility will assure you land on your feet despite the challenges life shows you. 

The ability to become free from financial pressures is something we all desire. And while this goal is not an easy one to achieve, the eight steps above can provide you with a solid foundation for taking control of your financial future. 

Flexibility Is Key-Tips On Achieving Real Financial Stability


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