Achieving financial success is the dream that many hold dearly. However, it remains a mirage as many people continue sinking in debts especially when faced with emergencies. Though there is no single answer to the question how to achieve financial success, this post will demystify four most important strategies that have proven highly effective.
What exactly is financial success? Financial success is not a specific point in life. Rather, it is a set of milestones or personal levels of net worth that one might anticipate in life. Often, the term is used to denote the following;
- Security: This is a personal desire for personal protection against unknown occurrences. For example, the sense of security from thoughts that you can meet financial expenses in case of medical or other emergencies.
- Peace of mind: This is the sense of satisfaction knowing that you can handle anything that life throws your way, and personal aspirations.
- Free time: Wealth can bring a unique sense of value for your time. Depending on a personal agenda, one feels more successful when no time is needed queuing.
The main strategies for financial success include
Spend less than you earn
This strategy is perhaps the hardest for people to implement and follow. However, it is the bottom line to start mapping your steps towards financial success. By spending less than you earn means that there is more cash to invest and save. This is one of the pointers that you are prudent enough and will not keep rushing for expensive loans when an emergency suddenly arises. To make this a reality, you need to be extra careful with credit cards and short term credits that have high-interest rates.
Ensure you have an emergency fund
Bad things can happen. In fact, they occur when one is least prepared for them. Think of an accident to any of your family members or a disaster that might require urgent intervention. By having an emergency fund, you can relax knowing you are prepared. The emergency fund should have an amount equal to your 6-12 months’ income or more. It can be in an easily accessible saving account or cash. You can also augment the emergency fund with insurance of the most probable risks.
Diversify personal investment
Your salary is not enough to take you to financial success. You need to diversify. This means creating several streams of revenue as a guarantee of personal success. Think of acquiring several rental properties for regular rental income, putting cash in security bonds, and even acquiring shares in the best-performing companies. Note that diversifying investment does not mean you need a lot of cash! You can diversify by simply converting a section of your house into a rental unit, opening a baking unit at home, or even starting a part time job.
Get people who you can march together
The road towards financial freedom is long and tiresome. This can cause a lot of fatigue and compromise your focus. To be successful, it is important to identify other people who share the same objectives and march together. It is also important to identify role models and learn progressively about finances to become successful in your focus on attaining financial freedom.