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On 15th August 2021, our nation will celebrate its 75th Independence Day. India got freedom from 200-year long British rule on the same day in year 1947. Yes, it’s true that we are living in Independent India.
But, don’t you realize many people of the nation is living with financial shackles. It’s time to remove those shackles, manage your personal finances and pave a path towards achieving financial freedom.
Thousands of people are always looking for ways to achieve financial freedom. Gaining financial independence holds extreme importance, as it helps fulfil your financial needs.
Let’s have a look on key takeaways that will help you achieve financial freedom.
- Identify the Desired Corpus
- Pay Off Your Debts Quickly
- Put Money in Emergency Fund
- Make Savings a Habit
- Generate Additional Source of Income
- Get Insurance Cover
- Choose the Right Investments
Once you have decided to achieve financial independence, it’s time to determine the corpus amount that you want to accumulate. Identifying an ideal corpus that you want to achieve by a certain age requires assessing your current financial situation and start investing in a way that help accumulate the desired corpus.
With help of proper financial planning process, you can easily achieve your goals in a time-bound manner.
Existing loans and other major financial liabilities just eat away the savings. Also, it is one of the major reasons for not being able to building wealth. So for accumulating wealth, you firstly need to adopt a loan repayment strategy that ensures to pay off your loans and debt as quickly as possible.
You must clear loans that attracts high rate of interest such as personal loan and credit card loan.
Financial planners always suggest to create an emergency fund that can help you meet the expenses for 6 months. It is created to help fight against financial emergencies such as sudden loss of income, unexpected hospitalization, or any other event that put your financial situation at risk.
You should keep your emergency fund in liquid instruments such as liquid funds, short term funds, and ultra short-term debt funds, etc.
To achieve financial independence, you need to follow a disciplined savings habit. For this, you should create a monthly budget and manage expenses within the budget amount. Also, track your expenses that help you check where you are overspending and get ways to cut down the expenses. Don’t ever overspend.
In addition to trim down on expenses, it’s advisable to explore options to generate more income. You can invest this extra income towards accumulating a corpus that further helps make the process of achieving financial freedom quick. With an additional source of income, you can also tackle emergency expenses and don’t need to reduce your investment amounts during financial emergencies.
When it comes to achieving financial independence, you need to invest your funds with the right set of investment options that offer high returns and give you the assurance of capital protection.
Before investing, you need to thoroughly understand your risk-return profile and begin investing accordingly.
Related Reading: Guide to Investing for Beginners in India
Insurance provides coverage against any unforeseen circumstances and with the right coverage, you and your family are financially secured against unforeseen circumstances. You should have a sufficient life insurance cover that ensure a comprehensive financial security for your family. Having health insurance provides financial guard against medical bills incurred due to health emergencies.
Apart from life and health insurance cover, you may get your assets covered with motor and home insurance.
Achieving financial independence is possible through identify the key goals and invest consistently. You must also keep yourself ready to fight against financial emergencies and unforeseen circumstances. The tips and guidelines stated in this article help you obtain wealth creation and attain financial freedom.