Who wouldn’t want that: to be financially independent and only devote themselves to the beautiful and important things! But the topic of financial freedom has many facets. In this article, you will learn how your path to financial freedom can lead you there.
Of course, it’s smarter to combine these two options. Here is our 4-step plan for financial freedom or you can try your luck at woocasino.com.
OUR STEPS FOR YOU
Step 1: Think about what you need money for
Write down your three most important goals that you want to achieve. Money alone does not make you happy. But with a financial cushion, you are generally less unhappy because you are less exposed to external constraints that you should be afraid of – that’s what financial freedom means.
Do you have specific purchases in mind? Are there any foreseeable crises that you want to arm yourself against? Are you planning major time-outs, for example to explore the world or expand your education? Do you simply need a cushion to feel more secure in general?
Tip: Simply write down the most important goal (or the three most important goals) that you are striving for financial independence for. Feel free to discuss this with trusted people to get feedback, get new ideas or check your thoughts against other perspectives.
Step 2: Check your expenses
A little money can become more if you invest it. But first you need to know how much you can save or invest each month.
The classic budget book is still not only useful here, but indispensable. A table with fixed expenses such as rent, electricity, clothing, living expenses, mobile, streaming and a buffer for extras (broken fridge…) will also help you.
Ideally, you should end up with a sum that you don’t need and that you can use to invest in a sustainable fund, for example by saving in a fund every month.
Step 3: Distinguish between saving and investing
You can put money aside in different ways:
Saving usually means that you put money aside in such a way that you can access it again at any time. Whether it’s a savings account or call money, it’s simple, free and safe. Whereby overnight money is certainly preferable, depending on the current interest rate. The advantage: liquidity. You have access to your money at all times. However, do not succumb to the temptation to use your savings for an unimportant goal.
Investing: There are various types available to you here, depending on your personal investment goals and your risk appetite. For example, you can put your money into funds, shares or other forms of investment. Even with small monthly amounts, you can invest in a fund savings plan and benefit from the performance – but you must also expect fluctuations and losses. The offers are often associated with fees. However, if you have patience and can leave the money untouched for a longer period of time, you can achieve higher interest rates if things go well. And tying up the money prevents you from tapping into these reserves recklessly.
Saving is a good way to start accumulating a sum, for example in a call money account. Investing goes one step further with the opportunities and risks mentioned above. Inheritances, regardless of their size, or bonus payments can be a good starting point for investments. Important: Never take on debt to buy shares, for example!
Step 4: Invest your money well
If you are looking for financial freedom, you need strong and competent partners! Inform yourself thoroughly about various financial service providers who can manage your project professionally. Don’t rely on glossy brochures, but ideally also seek a personal meeting and prepare yourself for it:
- What form of investment do you have in mind?
- A custody account, funds, perhaps a fixed-term deposit account or a savings bond with a short or long term?
- Or should it be a property? Are you interested in crowdinvesting?
- Do you want to invest your money in funds sustainably? Should it only do no harm (funds under category 8 of the so-called EU Disclosure Regulation, which take sustainable aspects into account) or should it have a positive impact (funds under category 9, which pursue certain specific sustainable goals, i.e. invest specifically in values with an impact)?
Do your own research and comparisons, ideally draw up a list of questions and discuss them with financial professionals from the institutions of your choice.
