Let’s start with some thoughts on dealing with financial freedom.
On earning: Never depend on a single source.
On spending: If you buy things you do not need, soon you will sell some that you need
On savings: Do not save what is left after spending, spend what is left after saving
On investment: Do not put all eggs in one basket
On taking risks: Never test the depth of the river with both feet
On expectations: Honesty is an expensive gift. Do not expect it from cheap people.
These are some of the pearls of wisdom from none other than Warren Buffet. Isn’t it the goal of almost every individual and business to attain financial freedom at some point in life?
Have freedom from debts, a nice car, nice home, an early retirement, a vacation and you don’t have to worry about your work or business?
I have heard this from almost every single person I have met, though the brand of car and the choice of vacation destination may differ from person to person.
There is financial aice in abundance. So what is it about financial freedom that everyone is yearning for? Is it more money? Is it the ability to spend more? Well, there might be some truth about it but it’s not all.
So if you are trying to attain financial freedom, here are some tested tips from some of the most famous and successful people.
Plan your Finances: “Someone is sitting in the shade today because someone else planted a tree long ago.” You can’t just wake up one day and say you want to be rich or have financial freedom from debts and loans. You need to plan for it. Planning your finances is a life-long process.
Your financial plan is your road map that would help you navigate your dreams and life.
And the more details, the better it is. In fact, you need to be passionate about planning your finance because without passion, you won’t have the energy and without energy, you will have nothing.
Save: “Don’t save what is left after spending, but spend what is left after saving.” This may sound like an incredible piece of impractical aice. Save first, spend next.
“Why save for the future that you have not seen by not living well today?” is the question many young men and women ask. It’s not so much about not living today, but making sure you have enough risks covered for the future that won’t throw you off-guard. Businesses also need to keep costs in place and save for the future.
But never make the decision of just cutting costs but not increasing income. Because cutting costs can only take you so far, your growth depends on how well you can plan to increase income while you save what you have.
Invest in time and wisely: There are two rules. First, do not lose the second is not to forget the first rule.
You don’t have to be armed with a degree or a diploma in financial management or you don’t have to necessarily be an investment banker to identify avenues for investment. You just need to start investing small. While risk-taking is important and a must for growth, don’t be foolish or careless.
Businesses ought to give priority to investments and wait for returns.
Grow consistently: You will come to know one day that what appears as a sacrifice today will instead prove to be the greatest investment that you will ever make.
Your growth is not always about how much money you make, save or you invest. In fact, it is even more about how much you have grown and how consistently.
Invest in yourself because that is the best gift today and in the future. When you invest in growing yourself, talent or even your own future, you will reap big rewards and grow consistently.
As Warren Buffet says: “Investing in yourself is the best thing you can do. Anything that improves your own talents, nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less.
You can have all kinds of things happen. But if you’ve got talent yourself, and you’ve maximised your talent, you’ve got a tremendous asset that can return ten fold.”
I have also heard many asking how long it takes to attain financial freedom.
I am yet to figure out the answer myself. And there is no one or right answer. Financial matters are relative in scale. There is no thumb rule on how much you need to save, how much you need to invest, and how fast you can grow.
Take one step at a time, be clear in what you want and plan for it. Strength and growth come only through continuous efforts and struggle. Ask anyone who has achieved growth if it was easy. I bet you would never hear a YES.
Sriram is the founder and chief mentor of Kuza Biashara Limited, a capacity building organisation coaching youth and SME owners across Africa. @Sbharatam or email@example.com.
SOURCE: BUSINESS DAILY