Three Major Goals of Financial Freedom

This blog post outlines three primary goals that most individuals strive to achieve:

• Money freedom
• Time Freedom
• Location Freedom

Successfully reaching these objectives can transform one's life, enabling them to spend more time with family, pursue passion projects, and live life on their terms. However, the key lies in breaking down these complex goals into actionable, manageable steps.

Your trusted guide to financial freedom

Today's roadmap to achieving financial independence comes from a seasoned expert who graduated from NCR, one of the top MBA programs worldwide in 2015. After gaining experience in the corporate world and creating multiple profitable startups, they now enjoy a comfortable life in South Goa, operating on a work schedule of just a few hours each day and spending the majority of their time with family.

Step 1: Securing a Good Job

For the vast majority of young people in India, securing a stable and well-paying job brings two significant benefits:

1. Confidence
2. Discretionary income

Having a safety net of discretionary income, the money left after paying for necessary living expenses, is crucial. It offers the flexibility and financial resources to invest wisely and take calculated risks. Unfortunately, high-quality jobs in India's economy that offer generous salaries are in short supply, making the competition stiff. But don't be discouraged; eye-catching opportunities can be found at both home and abroad.

Step 2: Efficient Debt Management

In today's world, taking on debt has almost become a trend. While it's tempting to indulge in purchasing luxurious items, remember the potential long-term consequences. Misuse of credit today can lead to poor credit scores tomorrow, which will inevitably impact significant financial decisions later in life. Therefore, the rule of thumb to follow is only borrow for productive items and ensure your total debt doesn't exceed 30 percent of your total income.

Step 3: Creating a Safety Net

Before embarking on the wealth-building journey, it's crucial to establish a financial safety net, also known as a baseline. This includes two parts:

1. An emergency fund equivalent to around six times one's monthly expenses.
2. Adequate health and term insurance.

Creating a safety net enhances your defences against uncertain situations and potential financial pitfalls.

Step 4: Building Wealth

The fourth step entails saving 5 to 10 times your annual expenses. It might sound like a daunting task initially, but remember, possessing such a financial cushion will allow you to take on new opportunities, whether in investment or potentially building your startup.

Step 5: Saving 25 Times Your Annual Expenses

A research-backed strategy for achieving financial independence is based on the 4 percent withdrawal Rule. It suggests saving at least 25 times your annual expenses. This solid financial base can support a retirement lifestyle without touching the principal amount.

Step 6: Managing Time Wisely

Time is an irreplaceable commodity. To fully appreciate the freedom that financial success brings, understanding and managing time effectively is essential. Avoid mindless scrolling and spend time on things that truly matter.

Step 7: Finding Your Purpose

Once financial stability is secured and more time is at one's disposal, finding a purpose or passion that brings joy and adds value to others' lives is of utmost importance. It’s crucial to stay engaged in an activity to maintain a healthy mental state and an overall sense of wellbeing.

Step 8: Achieving Balance

Balance is the final component of this comprehensive life plan. Even though someone might possess time and location independence, if the people they love are still trapped in the cycle of earning and surviving, contentment is hard to find. Therefore, helping others and sharing knowledge and resources is an integral part of leading a fulfilled and balanced life.