3 things to start doing TODAY in order to achieve financial freedom

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I’ve always used weight as an analogy for money. Maybe this is because I’m a woman who is usually thinking about my weight, or maybe because it really is the same strategy for gaining financial freedom.

This is because physical health and financial health are a lifestyle. You have to do the work daily. Yoyo diets are the equivalent of a get rich quick scheme. Neither works, what works is persistence and commitment to your goals.

If you ever want to gain financial freedom, you have to start today and continue to work for it until you get there. And even once you do get there, your habits will need to remain in order to keep it. It’s just like weight loss! I would say it’s easier than weight loss though, because you can make your money work for you.

So what can you start doing right now to gain financial freedom you ask?

    1. Savings fund: make sure you have a savings fund for emergencies, if you don’t have this yet, then you’re not ready to start investing.
    1. Get out of debt.Do this is rapidly as you can. Hustle until it’s done, then you can relax a little after that. Putting money toward investments while carrying credit card debt with high interest rates will negate the work you are doing.
  1. Invest early and invest often. Compound interest is amazing. You can turn a $500 initial investment with $500 annual contribution into $20,000 over 20 years with compound interest (if you receive 6% return which is historically very doable).

Right now, I’m loving LendingClub. I can put $25 into a bunch of different loans, with different ratings for how risky I’m willing to go. The more risk, the higher the interest rate. I personally prefer to play it conservatively, so I choose mostly A and B rated loans. Overall I’m currently getting around 6% return on my money.

Follow those three steps and you’ll be on your way to financial freedom.

I do have a 4th recommendation which is homeownership, but only if it makes sense to you and your situation. Whereas the 3 items listed above I recommend to every single person. Homeownership can be very rewarding and a great step to building wealth and stability. It can also be very expensive and leave one house poor if their market doesn’t have affordable options. If you do choose to buy a home, read this first.

More on compound interest

Think of compound interest as the snowball effect. The larger a snowball gets, the more snow it can collect when it rolls. The larger a sum of money in an interest bearing investment, the more money that will be collected in interest. This takes time though, so the earlier you start, the better.

Check out this compound interest calculator to see for yourself

Compound Interest Calculator

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