To stay afloat in times of economic turbulence is what most people are striving for at these times. Having a decent income is one of the prerequisites, but exit from the rat race and reaching financial independence is, above all, a mindset to acquire. Besides the proper attitude, there are other factors in the financial stability equation, and we will tackle them within the following lines.
Passive income holy grail of financial independence
The excellent method of achieving financial independence is covering expenses with passive income. It’s a method to use to access that holy grail of financial independence more quickly.
Passive income should provide you with reliable cash flow with minimum effort and enable you to win more wiggle room for achieving financial goals such as getting rid of debt, saving, and investing money. Some of the ideas: creating online courses, writing an ebook and selling on Amazon, investing in shares etc.
However, some initial work has to be done in the initial phase for setting up the passive income system. For instance, if you want to make passive income through online courses, you will need to set proper methodology, educational material and work on your social media image.
Start investing in financial markets.
Of course, saving should be at the core of your financial plan to achieve more significant goals. But after some time, when the money starts piling, you should start making your money grow.
There are many ways to make your money grow. The first that comes to one’s mind is the savings account with a good interest rate. But, what many are prone to overlook is investing in stocks, foreign currencies, or cryptocurrencies. The latter is relatively new but turned out to be the best investment during the last year.
Many people tend to associate investment with high-level financial expertise. The truth is that markets such as Forex, to take the most prominent example, are easy to navigate.
Of course, you will have to learn and train yourself. And there is tons of free training material online. Once you have selected the right Forex broker, or crypto broker, depending on your asset type, you just need to follow the market trends, news, and chart analysis in order to make the proper investment decisions.
Real estate – a great vehicle to make your money grow
Why real estate? The answer to this question is simple. Real estate offers returns on invested capital ranging from 17% to 35% or more. No other investment vehicle offers such returns.
Above all, real estate is the investment vehicle that allows it to use leverage. There are several ways of using leverage to achieve the returns mentioned above:
First and of course, bank leverage through the mortgage. Then, the rental type leverage (long term, seasonal, short term). In general, the shorter the duration, the higher the yield.
Finally, there is a leverage of the renovated property. Buying an inexpensive property, renovating it, and renting it out for a short period could offer a return exceeding 50%.
There is also marketing. Using a platform like Airbnb, you can reach many people very quickly without putting in too much effort. The site takes care of it, for a small fee from us (3%), which is super interesting.
Thanks to these returns, your real estate investments could generate cash flow every month, thanks to the rents received from my tenants.
Staying in a good financial position is a harsh task but possible to achieve. From the overall perspective, the order of rolling out the steps of your financial plan should be:
- Setting budgeting goals.
- Earning more through passive income.
- Making money grows through investment.
And also, don’t forget strict discipline when it comes to all of the steps of the way. Juggling between saving, investing, and earning can be a tricky task, so it’s always welcome to search for help from your financial advisor.