Financial Freedom is a state of financial security that allows a person to live an entirely debt-free lifestyle. This freedom allows them to travel the world without worrying about money, give to charity or do mission work. In order to reach this level of financial freedom, you must start saving at least 2% of your income. Saving 15% or more of your income is even better.
One of the simplest ways to achieve financial freedom is to automate your payments. Set up automatic payments for your mortgage, auto loan balances, credit card balances, utility bills, and even 401(k) contributions. You can even automate investments like employee stock options. The more automated your payments are, the faster you’ll be able to pay them off.
You can also earn passive income. Passive income is income that you get from other sources without exerting much effort. Some passive income streams include dividend stocks, limited partnerships, and rental properties. Regardless of the source, financial freedom opens up a wealth of opportunities for you. The freedom to earn as much or as little money as you like means that you can pursue whatever you want without worrying about the financial future.
Saving for future goals is another important part of financial freedom. You can save for your retirement, a home, vacations, or a child’s college expenses. The more you save for your future, the more money you will have when you stop working. As you accumulate savings, you can allocate small portions of your paychecks toward several goals at the same time.