CHANGE YOUR MINDSET

7 Point Formula for Financial Freedom: Personal Finance Tips to Help You Make More Money!

Written By Brian Tracy

One goal that we all have in common is that we all want to make more money and improve our personal finance. However, only a small percentage of us actually achieve the financial freedom we long for. We all want to have enough money so that we never have to worry about money again. The only question is, “are you going to do it or not?”

The good news is that there are more people achieving financial freedom faster today than ever before. There are currently almost four million millionaires, most of them self-made, first generation. Through proper financial planning and making it a goal to improve your personal finance, you can become one of them too.

Here is a seven point formula that you can use to make more money, improve your personal finance, and achieve financial freedom in the years ahead. I have taught this proven formula to countless people in my seminars and I have never had anyone tell me that it didn’t work and that it did not help them make more money. All over the country, I run into people who improved their personal finance and are now earning many thousands of dollars more each year as a result of applying this formula and consistently improving their financial planning.

This formula for financial freedom is based on the fact that it is possible for you to increase your productivity, performance and output by one half of one percent per week. This one half percent improvement can be achieved by something as simple as setting better priorities each day. If you can improve your productivity, performance and output by one half of one percent per week, and you can do this for four weeks in a row, you will be two percent more productive than you were when you began. Here they are:

1. The Golden Hour

Get up every morning two hours before you have to be at work, or at your first appointment, and invest the first hour in yourself. This is called the “Golden Hour.” And the first hour of the morning is the rudder of the day. It sets the tone for everything that happens afterward.

If you read one hour each morning, that will translate into about one book per week. This will translate into about 50 books per year, or 500 books over the next ten years. The very act of reading one hour every single day will enable you to increase your productivity, performance and output by one half percent per week consistently. It will give you your thousand percent increase over ten years.

2. Rewrite Your Major Goals for Financial Freedom

Rewrite and review your goals every day and think of how you could accomplish them. This will take you between five and ten minutes. The very act of writing and rewriting your goals, and thinking about them each morning before you start off, will increase your productivity, performance and output by half a percent per week, two percent per month, 26% per year.

3. Plan Every Day in Advance

Step number three is for you to plan every day in advance. The best time to do this is the night before. The very act of planning each day, each week, each month, in advance will make you far sharper and more precise at everything you do. You will find yourself with better focus and a greater sense of self-control and personal power when you work from a list. Your efficiency will jump 25% the first day.

4. The Principle of Concentration

Concentrate single mindedly, every hour of every day, on the most valuable use of your time. The principle of concentration is absolutely essential to achieve financial freedom. Virtually everything you do in terms of goal setting and financial planning is aimed at enabling you to determine the one or two things that you should concentrate on more than anything else.

Your ability to develop the habit of concentration will do more to assure your personal finance success than perhaps any other skill or habit you can acquire.

5. Listen to Audio Programs to Make More Money

Listen to audio programs in your car. The average person spends 500 to 1000 hours per year behind the wheel. By turning your car into a university on wheels, you can become one of the most knowledgeable and most skilled people in your profession.

I have spoken to thousands of people who have learned how to make more money by listening to audio programs continuously as they drove around. The very act of listening to audio programs, all by itself, can give you an increase of one half percent per week and more over time.

6. Magic Questions

Ask yourself the two “Magic Questions” after every meeting and every event of importance in your life. The first question is, “What did I do right?” And the second question is, “What would I do differently, next time?”

By reviewing your performance immediately after every meeting, sales call, and presentation, you will become better and better, faster than you can imagine.

The answers to both of these questions are positive. By reviewing what you did right and what you would do differently next time, you program into your mind a predisposition to be even better the next time out. If you take a few minutes and write down everything you did right and everything you would do differently immediately after a call or presentation, you can double and triple the speed at which you learn and grow and improve in your work.

7. Learn to Appreciate

The final point is to treat everyone you meet like a million dollar customer. Treat every single person, at home and at work, as if they were the most important person in the world. Since everybody believes that he or she is the most important person in the world, when you treat them as if they were, they appreciate your recognition and acknowledgment more than you can imagine.

By setting financial freedom and personal finance accumulation as your goals, and then by implementing proper financial planning on the one hand to get better and better at what you do while on the other hand saving more and more of what you earn, you will become financially independent, if not a self-made millionaire in the years ahead.

I hope you enjoyed this article on how to improve your personal finance and achieve financial freedom! If you have any other personal finance tips that have helped you make more money over the years, please share and comment below!

Robert Kiyosaki’s 10 Keys to Financial Freedom

By Joel Brown

Financial freedom is one of the most desired wishes anyone has, and it is so for a good reason. You can never expect when there will be a financial crisis, sweeping away all your wealth and income sources. As a result, educating yourself about the importance of financial freedom, as well as the means to achieve it is very essential.

Robert Kiyosaki, an eight-grade dropout entrepreneur and investor, is one of the most popular financial literary activist and commentators living today. His book “Rich Dad Poor Dad” is rated as one of the best personal finance books of all time, and in it he details many ways to achieve financial freedom.

Here are Robert Kiyosaki’s 10 Keys to Financial Freedom:

1. Accept Full Responsibility

Every choice you make has its own consequences, some of which may cause damage to your wealth irreversibly. Hence, you must accept complete responsibility to secure your financial future. Understand that every decision and choice you make today will impact your life tomorrow. Therefore, it is essential that you evaluate all your financial decisions, purchases and expenses within the context of your long-term financial objectives.

2. Control Your Spending

We live in a consumer-driven world where we are compelled to spend continuously. Your spending habits are one of the main reasons why you won’t be able to secure your financial future easily. Track your every expense and think twice before making any purchase. It will be hard to do so at first, especially if you are prone to uncontrollable spending, but once you learn how to manage your expenses, then moving towards achieving your financial freedom will be a cakewalk.

3. Having a Budget is Crucial

Creating a budget and living within its limitations is crucial for achieving financial freedom in your life. A budget gives you the input you need to manage your income and control your expenses. In short, a budget gives you a sense of accountability. If you want to secure your personal finances, then a budget will provide you with tools to achieve just that.

4. Pay Yourself First

One of the key fundamental practices to achieve financial freedom is to work for yourself, rather than work for a bank or a credit card company. Learn to pay yourself first before you pay someone else. By doing this you achieve two things: you make yourself richer, and you stop getting poorer.

Only when you save money today can you invest it tomorrow, ensuring your financial freedom in the process.

5. Never Have Any Debt

Debt is one of the leading causes of financial insecurity in many people’s lives. It starts consuming you from the inside, stopping you from pursuing your dreams, hopes and goals in life. Debt deprives you of a happy future. Being debt-free should be one your unrelenting goals in life, and you should commit yourself totally to stay that way.

Debt-free living should be your passion if you want to achieve financial freedom.

6. Establish an Emergency Fund

An emergency fund is a cash cushion that will support your living expenses for at least 3 months. It can also come in handy when you need to cover unforeseen expenses in your everyday life such as repairs, medical expenses and other emergencies. Having an emergency fund is essential to make sure that you don’t resort to debt when such situations arise. Ensuring that your living expenses will be covered will also give you “peace of mind”.

One of the best ways to have a cash cushion is to set up an alternate bank account and start saving for your emergency fund.

7. Never Stop Learning

Educating yourself about financial matters regularly should be your top priority.

Today, there are countless sources to update your knowledge about the finance industry and how it works. Take full responsibility of your financial life by committing yourself completely to it. Instead of reading all topics in one sitting, you can start learning one subject at a time. For example, you can read about home budgets if that is what you are interested in. Likewise, there are many other financial matters that you can learn consecutively, thereby increasing your overall financial literacy.

8. Have Clear and Concise Financial Goals

If you don’t have any clear defined financial goals, then it will be very hard to work towards securing your financial freedom. If you want to establish a big business, work towards it by starting your own company. Alternatively, if you want to be an investor, learn to pick the right opportunities and grab them immediately when available. Only when you have your financial goals clearly in your mind will you be able to recognize your true potential.

Having goals and working towards them will also motivate you to life the life you’ve already dreamed out.

9. Network Marketing

The low startup cost of setting up a network marketing company is a great advantage to have. It is very hard to start a big business without huge investments and time.

A network marketing company will give you the time you need to build your business skills and transition from being a low-level employee to a highly paid businessperson. Hence, networking marketing is one of the perfect ways to secure your financial freedom. Network Marketing supplies you with a residual income, so you make money while you sleep and travel.

10. Simplify Your Life

Life is becoming more complex with almost every passing day. Running after money and your financial goals will distract you from things that are very important in life. As a result, you will start to lose your motivation and slump into the darkness. Hence, it is very essential that you simplify your life by freeing up your mind of all the clutter.

The key to financial freedom is very simple: convert your regular earned income into passive income or portfolio income. With this in mind, it is very easy to achieve the goals you desire without giving up on things that you hold close to your heart.

How to Achieve Financial Freedom

Financial freedom is the ability to do whatever a person wants to do without being limited by money concerns. For some, it may mean becoming a billionaire, while for others, it may mean being content with what they have. Taking the right actions will help you become closer to your idea of financial freedom.   Steps

1. 
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   Develop a long-term plan. You need clear goals to keep you on track in order to be successful.
   • On a piece of paper or computer document, make a list of each goal that you want to reach in order to be successful. Some examples are to pay off your credit cards, save money for a down payment for a house, or retire at a certain age.
   • List a desired target date for reaching each goal.
   • List an estimate of what it will cost to reach each goal.
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2. 
   2
   Make a budget. A budget is your playbook for how to spend your money. You need it to keep your spending within reason and help you to ensure that you have enough money to cover your current needs as well as to save for your long-term goals.
3. 
   3
   Resolve to live debt-free. If you are currently in debt, plan your budget so that you can get out of debt more quickly by making extra payments. If you are not in debt, continue to live that way by putting off your purchases until you have saved enough to cover them.
4. 
   4
   Reduce your expenses. Cutting spending by even a small amount on a regular basis will make a big difference in the long run. Live frugally by learning to recognize the difference between want and need.
5. 
   5
   Increase your income. It is wise to have more than one source of income, both to increase your savings more quickly and as insurance in the event that you lose your job. There are a number of ways to supplement your income, from working a part-time job to developing streams of passive income.
6. 
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   Invest your money. Your money will grow much faster if you invest it rather than leaving it in a savings account. The increase in value will enable you to reach your goal of financial independence much more quickly.
7. by: WikiHow

Focus on financial freedom instead of debt

There is an interesting concept taught to race car drivers that also applies to consumers trying to reach their financial goals. One of the things drivers worry about the most is hitting the wall during the race. Trainers instruct their drivers to focus on going straight and maintaining speed, and that avoiding the wall is inevitable. People who focus too much attention on “hitting the wall” often find themselves in the position they feared most.

The same can be said about focusing too much on debt and other obstacles hindering financial success. Instead of focusing too much on the possibility of failure or ‘hitting the wall,’ concentrate on reaching financial freedom.

Each year during Financial Literacy Month, thousands of consumers take the pledge to begin the path toward financial freedom on FinancialLiteracyMonth.com. While this year’s month long financial literacy initiative is over, the quest for financial freedom continues. The financial educators at Money Management International offer the following tips on how to create wealth and avoid debt throughout the rest of the year.

Invest wisely. Many people find themselves in difficult financial distress because they have not properly prepared for emergencies or for the future. If you don’t want to end up broke, start putting things in place now to help you reach your financial goal/s.

• Start contributing to a 401(k) account or some other retirement investment. A little put away now will bring huge results later.
• Build an emergency savings fund. Prepare for the unexpected such as a job loss, home or car repairs, and even periodic expenses. This way you won’t have to rely on credit when these instances occur.

Hone your passion. Invest in a career that is rewarding and challenging. Don’t chase money. Many people are living their dreams and making money at the same time.

Protect assets. Insurance may seem like wasting money, but it will come in handy when it’s needed and could save you a boatload of emergency expenses. Make sure all your valuables are protected including yourself. Purchase the right coverage to avoid an unnecessary financial strain.

Pay off credit card debt. Carrying a credit card balance each month is not helping you. The money going towards payments could be put to good use in another area. Be careful not to charge more than you can afford to pay off in a reasonable amount of time (90 days or less). Also, don’t use more than 30 percent of your credit limit.

A good piece of advice on obtaining wealth is to simply live within your means. Spend less than you earn. Don’t buy a $60,000 car when you’re only earning $30,000. Develop some achievable financial goals and stay on course – and off the wall.

by MMI Resources

10 tips for financial freedom

Investment Yogi

Financial freedom is directly linked to wealth creation, and cannot be achieved without elaborate planning, first to reach the goal of being financially independent, and second to maintain that level

For majority of us, our primary source of income is from our personal efforts (job, business or profession). More often than not, our entire lives and consequently those of our families, revolve around our careers -  long hours of work, ruthless competition, insecurity about the future, lack of personal time, and so on.

To keep up with our own demands, as well as so as not to be left behind in society, we immerse deeper into our work, resulting in even more stress, failures in personal relationships and lower self esteem. Ironically, all this is done with the desired objective of providing our families with a better quality of life.

Wouldn't it be great if one doesn't have to entirely depend upon personal efforts to take care of one’s needs?  This would entail creating additional streams of regular income, to supplement or even replace the primary source. If this was possible, most of us would no longer be working without choice, but would work for joy and self fulfillment.

We would have the flexibility to work at our own pace and devote our time to other pursuits we are interested in. Our objective of a better quality of life would be fulfilled. This is what is known as financial freedom – when one is no longer dependent upon personal efforts to maintain a desired level of living standard.

Financial freedom is directly linked to wealth creation, and cannot be achieved without elaborate planning, first to reach the goal of being financially independent, and second to maintain that level. The goal is to achieve an amount of capital which not only provides enough regular returns to meet ongoing lifestyle expenses, but also that the composition of capital is such that it is likely to increase in value over time, so that future returns are generated on the increased capital base and are able to take care of the future increase in expenses due to inflation.

While for the majority of families it would seem very difficult to reach such a level, it is certainly not impossible, and can be achieved with some discipline and sacrifices.

Below are some of the rules which from my experience are paramount in wealth creation and consequently, in achieving financial freedom:

Decide upon your level of wealth required for financial freedom – This will be directly proportional to the lifestyle you wish to follow after becoming financially independent. If one is used to living and dining in Five Star comfort regularly and expects it to continue after becoming financially independent, obviously a much higher level of wealth has to be targeted than for someone who is happy eating out once or twice a month. Hence scaling down one’s lifestyle can lower the threshold required for financial freedom.

Know where you are before you start – It is essential to make a complete list of one’s Assets and Liabilities, Incomes and expenses (both current and expected in future) and cash flows before one starts. One cannot reach a destination without knowing where he or she is starting at.

Give priority to protection of what you have – Insure all your assets as well as payment of liabilities against unforeseen circumstances which have the potential to destroy your wealth.

Know your attitude to risk - This depends upon one’s personality, age, commitments, current level of assets/liabilities/income, etc. Attitude to risk is not fixed, and may change over time or due to changing personal or external circumstances. Generally, higher the capacity and willingness to bear risk, higher is the return, but this is not always true.

Get your finances under control – This implies stopping money leakages, however small or insignificant they may seem. Most money leakages are through unnecessary tax and interest expenses, wrong spending and wrong investments. Money leakages are the most common reason for inability to create wealth.

Pay off debts on priority - Unless the debt is incurred for creating an asset which is expected to increase in value or for business purposes, it is not advisable to incur debt. Any other debt, if incurred, should be paid off on priority.

Keep the taxman at bay – Apart from interest, tax expense is the highest expense item which prevents long term wealth creation. Be prepared to pay for expert tax and financial advice. It may seem expensive at first, but the benefits will far outweigh the costs in the long run.

Understand that there is no such thing as free advice – Advice given by many financial product sellers may seem to be free (as they do not charge you fees but earn from product commissions), but in the long run it must align with your financial goals. If not, it can be very costly indeed. There are only two mantras that ultimately work – spend less than you earn, and buy low and sell high.

Understand that gaining wealth is a slow process – Earning it too quickly (say a lottery or inheritance) may make you rich, but it does not give you experience in acquiring wealth, which is vital for keeping and growing that wealth.

Understand and implement the power of compound interest - Albert Einstein called it the Eighth wonder of the world. Interest compounded over a long period of time has a tremendous capacity to create unimaginable amounts of wealth.

Lastly, understand and accept that money is not the solution to all problem - It makes life easier, but does not solve all problems. It is the oil that smoothens the engine. It is not the engine. So take it easy and do not be consumed by the exclusive desire to earn more and more, as it will destroy peace of mind and defeat the objective of being financially independent.

                             




Source: InvestmentYogi 

Achieve financial freedom in four simple steps

Nitin Vyakaranam

Life gives us ample examples of how to manage our finances at every walk of life. Here are some of them that we come across commonly:

1. Emergency fund: Building an emergency fund is the first step towards maintaining a healthy personal finance life. We have several examples in our day to day activities wherein we anticipate emergencies and take the required precautionary actions. We always make sure that a glass of water is handy when we sit for a meal. This is in anticipation that the food may be spicy. Most of us always keep a torch or some other power backup in anticipation of a power cut. We check our fuel tank before going for a long drive. These are common steps we take in anticipation of some mishap or the other. However, we often stay unprepared for the more serious situations in life. One should maintain a dedicated fund for unforeseen situations.
2. Diversification: Cricket is the most popular game in India. A cricket team is not made of 11 bowlers or 11 batsmen. It is a combination of bowlers, batsmen, an all-rounder and a wicket-keeper. The team management generally tries to pick the winning combination based on the playing conditions and the opposition. Similarly, never concentrate on a single asset class while investing. Savings should be diversified among various asset classes. The ideal combination of various assets classes should be decided based on the individual's risk appetite.
3. Advice: We rely on expert advice in every aspect of our lives except managing finances. In simpler terms, we will not consult an engineer for a heart surgery or a doctor for constructing a building. But when it comes to personal finance, we mostly rely on the advice provided by family, friends, neighborhood agents or colleagues. A financial advisor always remains our last option. Always depend on reliable advice and consult a financial advisor before making financial decisions.
4. Financial decisions: We have many examples of how team work gives us good results. Consider games like cricket, soccer, hockey or any other team sport. Every member of the team contributes to the success of the team. Similarly, it is important that every product in the diversified portfolio contributes to the final return of the portfolio. Buying a wrong product will not only diminish the returns but will also eat away all our savings. So always do research and ask the right questions before picking members (products) of your portfolio team.

Nitin Vyakaranam is the founder and chief executive officer, ArthaYantra, an integrated online personal finance company.

Disclaimer: The opinions expressed in this article are the personal opinions of the author. NDTV Profit is not responsible for the accuracy, completeness, suitability, or validity of any information on this article.

Financial Freedom

Scott H. Young

Financial freedom isn’t the same as being rich. Although people often confuse the two, they are completely separate goals. One person could be completely financially free earning $15,000 per year. Another person could be trapped, even with millions of dollars.

Last week, I touched on the topic of financial freedom. I wrote about my goal to build an emergency fund with a year’s worth of living expenses in savings. This would give me the freedom to make drastic career or business moves without feeling the effect on my bank account for an entire year. But this is just a first step towards financial freedom.

What is Financial Freedom?

I define financial freedom as not needing to worry about money. Money shouldn’t be a dominating force in making decisions in your personal or professional life.

A good way to view financial freedom is another type of freedom most people in the Western world enjoy: freedom from hunger. As a human being, I need to eat to survive. But the relative abundance of food in my life has meant hunger is never a driving force in my decisions. If food were scarce, getting enough to eat would probably occupy all of my thoughts.

Being financially free, is the same as being free from hunger. Money will always play a role in your life. But you are free when it no longer becomes the dominating influence on your goals.

Financial Freedom is More Important than Wealth

With food, there is an upper limit to the amount you can consume. Once you reach a minimum threshold, freedom from hunger is basically guaranteed. But there is no upper limit for spending money. That’s probably why there are far more people free from hunger, than those free from money.

Wealth is only part of the picture. If your spending outpaces your income, it doesn’t matter whether you are rich or poor: you aren’t financially free. Pursuing wealth is a noble goal, providing you do it by contributing value. But it doesn’t guarantee the peace of mind and satisfaction associated with financial freedom.

Originally all of the financial goals I set were strictly income or savings goals. Have $__ by a certain date. Now I realize that this isn’t enough. Earning more money won’t bring me closer to financial freedom unless I also make progress in the other elements of financial freedom.

There are three main elements to financial freedom:

1. Automatic income to sustain yourself without needing to work
2. Higher income than spending
3. A low poverty threshold

1) Automatic Income: Not Needing to Work

Complete financial freedom would mean your income is automatic: either through interest on savings, passive income or a business. If you stopped working for an extended period of time, your life wouldn’t make a noticeable turn for the worse.

Of course, this is an extremely difficult goal to achieve. However, you don’t need to achieve 100% financial freedom to enjoy the benefits. Making progress towards any of the three elements will improve your life.

Building an emergency fund with one year of income is a large positive step towards this first element. If I’m living paycheck to paycheck, I’m forced to work to survive. With a large enough emergency threshold, I have at least a one year buffer before being forced to work.

In a perfect world, material wealth would vastly outstrip needs so that people pursued work entirely for the joy of creating and a professional mission. That’s not reality, but you can be another step closer by having enough automatic income or savings to create a buffer between you and the need to work.

2) Greater Income Than Spending

It’s amazing that in one of the wealthiest countries in the world, we have so much consumer debt. Some debt is an investment. Student loans or borrowing money to launch a business are often necessary to reach more important goals.

But much of today’s debt has nothing to do with investing in the future. It’s excess spending on credit cards. Buying bigger cars and bigger homes in excess of our means. Consuming for today at the price of tomorrow.

In this point, the difference between wealth and financial freedom is most noticeable. Persons earning six-figure salaries are often burdened by consumer debt. If your expenses outpace your income, you can’t be financially free. You are always sitting on the knife’s edge of your ability to spend, so money must be a constant factor in your life.

The goal, of course, isn’t just to eliminate debt, but to be actively saving. When you have the ability to put away 10%, 30% or 50% of your income into savings, you have increased freedom. Now, there is another level separating you from the chains of money. Instead of wondering whether you’ll have enough food to eat, you always have an excess in your cupboard.

3) A Low Poverty Threshold

The poverty threshold is a term I use to describe the minimum amount of money you need to enjoy a comfortable life. Some people require $70,000 per year for comfort. Other people need less than $10,000.

A low poverty threshold means you could be perfectly content with a bare minimum of material conveniences. If all your savings were stripped from you, and your income was reduced by 80%, could you still enjoy yourself? Or would you be miserable having to adjust to a lower level of income.

Your poverty threshold is psychological. It’s not about actually having to survive poverty. Having a low threshold simply means you’d be willing to sacrifice more to make bigger changes. For example, iimagine your poverty threshold was roughly $50,000 per year. If you had the opportunity to switch to a more exciting career, but the starting pay was only $40,000, you wouldn’t be able to make the switch. A lower threshold is freedom.

Building a low poverty threshold is about occasionally conditioning yourself to go without. Go an entire week without spending any money. Travel for a month and stay in hostels instead of nice hotels. Go without your car for a month.

Experiencing mild poverty in small doses allows you to lower your threshold. It’s just like dipping your feet in a lake to get used to the cold water. Occasional splashes keep you from being afraid to dive in when you need to.

I think this last element of financial freedom is the one most away from current advice being given today. It has nothing to do with money, but entirely your mental disposition towards money.

Isn’t Consumption Insatiable?

Economists make the assumption that people have unlimited wants. While that assumption may be useful for drawing graphs, the evidence is to the contrary. Studies of happiness have shown that, beyond a minimum level, money doesn’t directly contribute to your happiness.

There will always be material desires. But if you build enough financial freedom these desires shouldn’t dominate your life. More important desires like meaningful work, relationships and self-improvement should have a bigger influence on your decisions.

Isn’t Earning Wealth the Hard Part?

One discussion of financial freedom could argue that earning all the money is the hard part. Your mental disposition is relatively easy, once you have a high enough income and savings.

I disagree. I know many people who are unhappy, even though they have more material comforts than I do. I also know people who appear to be content, even though they have less. In fact, I’d say that earning the money is the relatively easy part. Your mental disposition is far more stubborn.

It’s easy to be seduced by competing for wealth, advertisements and getting too comfortable with your possessions. The struggle for financial freedom has to be waged on both fronts: earning enough money and building the mental discipline to keep that money from controlling you.

“The Stuff You Own, Ends Up Owning You”

That header is a quote from the book and movie, Fight Club. I think much of the popularity of the book stems from that single idea. That instead of rewriting the rules of the game, we’ve decided to play within them. Earning more money, without evolving our disposition towards it. Building ourselves a comfortable prison.