Today, every women in India is well educated and want to become financially independent. We have jolt down 5 ways through which a women can achieve financial independence.
What is Financial Independence (FI)?
Being financially independent does not mean ‘early retirement’ this is all about creating ‘wealth’ and not being dependent on a high-paying job for the rest of your life.
It simply means not having to work to pay for your living expenses. Does it mean you have to stop working? It means you don’t ‘have’ to work to pay for your living. You work because you want to, or you like to and not because it’s a compulsion.
The amount of money you need to save to be financially independent totally depends on your lifestyle choices also the younger you are when you start investing, the more likely you’ll achieve financial independence early on.
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Below are the ways anyone can adopt to become financially independent:
1. Ignore the Joneses
The proverbial “Joneses” is the family that:
- Drives the latest cars
- Lives in the biggest home
- Takes the nicest vacations
- Buys the hottest tech gadgets
Stop competing and stop trying to buy the most expensive items. Achieving financial independence has to do with spending less than you earn.
“Building wealth really isn’t rocket science. As long as you spend less than you earn and invest the difference, you should see results fairly soon”
2. Make Budget:
One of the fastest ways to fight the “Jones Syndrome” is to create a “budget”. Budgets help make your dream life a reality.
A monthly budget planner will help you to have a watch on your incomes v/s your expenditures and will improve your money management.
3. Increase your saving rates:
“Income does not equal wealth, saving is equal to wealth” An example of this is, a couple who earn approx. 90 lakh a year, are in their late 60’s, and they will have to work for the rest of their lives because they have saved only 10 lakh over their lifetime. On the other hand, I’ve seen assistants earning 5 lakh a year who managed to save and invest over 20 Lakh in just a few years.
To become financially independent, you need to increase your savings rate. In this case, the average rule of thumb is to save between 10% to 20% of income. In fact, if your savings rate is 50%+, studies suggest that you’re more likely than other groups to become financially independent.
To live an above-average life, you’ll have to do what the average person won’t.Note: Make sure you keep a portion of your saved money (Keep 3 to 6 months of living expenses) in an emergency savings account, while you invest the rest.
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4. Increase Your Monthly Income:
You can save as much as you want, but at some point, you just won’t be able to save more money because you still need to pay for basic living expenses. Here, you can consider for a side hustle such as blogging, Freelancing, Affiliate Marketing etc.
Please note that these side hustles ideas take time to build up before they have the potential to make money while you sleep. And that’s totally ok. Make sure you pursue a side hustle because you enjoy it – and not just because of the money.
5. Start Investing Today:
The most underrated tip is to start investing as soon as possible. This will enable you to protect your savings from inflation and other negative aspects of the markets. For instance, if you have a diverse portfolio with investments in precious metals, real estate, equities, commodities, ETFs, bonds, etc., your portfolio will gradually start to become more resilient, which will be extremely beneficial to you in the long run. Create an investment strategy for this and stick to it at all times.
Becoming financially independent is not easy and it certainly will take a lot of patience.
Financial Independence is living a few years like most people won’t so you can live like other people can’t.
Achieving financial independence will take:
- A long-term mindset
You’ll probably have to give up several luxuries in life – like buying cool clothes, going on fancy vacations, or buying luxury cars but once you have achieved financial independence, you’ll no longer have to:
- Work a job you hate
- Work with people you hate
- Constantly worry about money
If living a life without money worries sounds like the ideal life for you, then you’ll know that the sacrifice you make today will be worth it.
Start today, because your bank accounts will thank me tomorrow.
Do you plan on becoming financially independent? Let me know your thoughts in the comments section below!
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