Financial Wealth Management to Financial Freedom – Personal money management to financial independence maybe an evasive goal to achieve but to the visionary and knows how to get into personal financial planning, apply and stick to his plan, financial freedom is achievable. Here are seven steps you can take to ensure yourself more financial freedom in the future.
1. Start With A Plan
List down your usual expenses. Focus on your objective: What are you saving up for? Remember to allocate and prioritize. You should keep these in mind when planning for your retirement.
2. Manage Your Debts
When your credit card payments from different banks get out of hand, is is far wiser to consolidate your loans by securing one major loan and paying off all the others—that way, you only have one loan, and one escalating interest, to think of. Always list down all our monthly debt payments and your incoming cash flow – it may depress you enough to change your spending habits.
3. Pay Yourself First
Again, we go back to the cardinal rule. Instead of targeting to save what is left from your paycheck, set aside a reasonable amount upon receiving your salary. Refer to your expenses list and look for negotiable expenses you can reduce or minimize.
4. Capitalize on “Small” Things
This will allow you extra mileage. What’s “small” in increments may turn out to be big, after all. Take stock of how much you spend on your coffee, cigarettes, and beer! Multiply it by the number and you just might be surprised that the amount could get you a nice LV bag (or three month’s rent.)
5. Diversify and Balance Across Cash, Growth, and Income
Do not put all your eggs in one basket. One’s savings should be divided among different products that offer different yields, from a regular savings account, so you have liquid cash to obtain in case of emergencies, to time deposits, all the way to bond funds and stocks. There are people who are interested in regular interests, payments, and liquidity. Some are interested in and are brave enough to go into equities. Whatever your decision is, remember to always consult an expert.
6. Remember That Deposits Barely Keep Pace with Inflation
One of the key elements of growing wealth commands that a portion of your wealth should grow in pace with inflation. Do not be too safe as to stash your cash in deposit accounts, as when inflation hits, your money could be greatly reduced in value. If you are one of the cautious kind, the Bangko Sentral ng Pilipinas (BSP), through HSBC, offers a Special Deposit Account, with an investment period that is generally short-term where you ern a higher rate of interest than your usual time deposit. (For futher information, please call +632-85800, log on to www.hsbc.com.ph, or visit your HSBC nearest branch)
7. How Much Cash Do You Need?
Typically, six to twelve months of your income should be easily retrievable should you need it for emergencies. For your extra cash, remember that if you put money into high-risk investments, you may also get high yields.
Source: Sense and Style
Hope you learn some lessons on Financial Wealth Management to Financial Freedom.