Financial freedom, to many people is a dream. Do not think that you can only get financial freedom only when you have won the lottery. You can do it strategically. One of the strategies is saving and investment. People usually underestimate the power of saving. The truth is that if you do not learn to save, you are never possible to have that large sum of money for investment in order to attain financial freedom.
The saving rate in America is as low as 1%. The low saving rate means that people have to work forever for food and bills. Why is the saving rate so low? The reason has been pointed out by Frank and Muriel Newman. The key is the concept of saving. Many people save their money after their spending. This is absolutely wrong. You should only use the money after you have saved.
You may find it difficult to consciously save part of your salary every month. One way to help you save your money is by using auto investment plans offered by banks or insurance companies. Such scheme usually deducts a fixed amount of your salary on the first few days of the month. Therefore, before you have used up your money for food and clothes, it has become part of your investment.
Of course, I am not asking you to have 90% of your salary transformed to your investment by the plan. The reason for a monthly deduction is to manifest the monthly compound effect of a small sum every month. For example, if you invest $100 a month and that you will get a 5% (very conservative) return. In 6-month times, what you get can be 8% more than $100 x 6 months x 105%. The 8% difference is only for 6 months. Can you imagine what the number is when it comes to 20 or 30 years for a longer term of investment? You are going to accomplish the financial freedom that you dream of.
Other than saving, you have to learn the world control. To attain financial freedom, you should avoid adding to yourself the financial burden. Control your spontaneous possessive desire which leads most of the people go into a financial problem. If you love to use credit card, you should pay more attention to this point. This is because the interest rate charged by the credit card company is extremely high. When you fail to make you payment, the interest is also counted in the way of compound.
One more advice to you is to always keep your eyes on your financial status. Many people go into financial problem and bankruptcy because they do not know their financial status clearly. When you know your financial status, you will do all possible actions to stop your liability and gain more assets.
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