You Are 3 Steps Away From Financial Freedom
What does financial freedom mean to you? Having enough money to do whatever you want to do is how most individuals define financial freedom. You can reach that level of freedom in you understand investing. You do not get a second chance at working and investing. Your working years are the only chance you get at saving enough money to reach financial freedom; do not waste the opportunity.
Step #1 – Do You Have An Investment Strategy?
The key to creating your investment strategy is to have an investment strategy. That sounds very simple however many people just “stumble” into a portfolio. They collect mutual funds and stocks as if they were butterflies. Something bright and pretty catches their eye, perhaps an article or advertisement with a great rate of return, they get excited and buy some of that mutual fund or stock with little research into the investment. That by the way is not an investment strategy; an investment strategy requires a bit more soul-searching.
Step #2 – Ask The Hard Questions
If you want your investments to bring you to financial freedom, you need to choose them wisely. You work hard for your money, why waste it on investments that will not help you achieve financial success. Ask yourself the hard questions to determine what investments are best for you.
Have you set any financial goals? What do you want to achieve? What do you want to spend your money on: early retirement? debt free living? frequent travel opportunities? What do your finances look like now? Where are you at, where do you want to be? Have you set a deadline date by which to reach these financial goals? Do you have an action plan? Are there any gaps in your plan? These are all hard soul-searching questions that must be answered before choosing your investments.
Step #3 – Understand The Reason For The Questions
Why would your financial dead-line date determine your investment choice? Or why does your financial goal make a difference on which investments you choose? Different types of investments offer different advantages and disadvantages so by understanding your financial goals you can match up those goals with the proper investment. If an investment charges fees, holding that investment for the long-term can help dilute the fees. To take advantage of the highs and lows of stock prices, you can dollar cost average (buy the same amount at the same time every month).
There are no right or wrong answers; it’s your money, your questions, your answers. Just be honest with yourself. It’s okay to not be familiar with certain types of investments; everyone cannot a financial guru and that is okay. Knowing yourself and your goals will help you pick better investments.