Financial independence refers to the ability to live comfortably without working. You can retire or work because you choose to, rather than because you have to.
Everyone wants to be financially self-sufficient and retire at a young age. Financial independence or freedom refers to one’s capacity to earn or produce a living that allows them to live comfortably without worrying about their next paycheck.
Ways to Plan Your Financial Freedom this Financial Independence Day
1. Make a Life Plan
To you, what does financial independence entail? Everyone wants it in some way, yet it’s a too nebulous aim. You must be very explicit when it comes to money and timelines. The more explicit your goals are, the more likely you are to achieve them.
Make a list of the following three goals: 1) how much money you’ll need for your lifestyle; 2) how much money you’ll need in your bank account to make that happen; and 3) when you’ll need to save that money. Then, working backwards from your deadline age to your actual age, set financial mileposts at regular intervals between the two dates. Put the target sheet at the top of your financial binder and carefully write down all amounts and deadlines.
2. Make a Budget for your Spending
Start with your current spending by reviewing the previous three to twelve months’ worth of bank and credit card statements and noting your costs on a worksheet like this. Then consider how your spending could alter as a result of your new lifestyle. If you plan to downsize or relocate to a lower-cost-of-living location, for example, you may pay less on housing. Travel, hobbies, and health care, on the other hand, may be more expensive.
3. Start putting money aside and Investing it
Have you ever heard of the term “inflation”? – Inflation is defined as an increase in the cost of living that reduces the buying power of your hard-earned money.
Investing in productive asset classes and investment channels within them, such as mutual funds, is the key to combating inflation. To achieve financial independence, be aware of inflation and have the appropriate investment/asset mix to meet your financial objectives. Some investments provide tax benefits under Section 80C of the Income Tax Act of 1961, which might help you save money on your taxes.
4. Prioritize and Set Financial Goals
Setting goals is the most important part of planning because without them, you’re like a stranded sailor. As a result, when you make financial objectives, they must be detailed, quantifiable, and time-bound, with defined time limits for each target (3 years, 5 years or 10 years).
Short-term, medium-term, and long-term objectives should all be categorised. Goals must also be attainable, reasonable, and flexible. S.M.A.R.T – Specific, Measurable, Adjustable, Realistic, and Time-bound – should be the acronym for your financial goals.
5. Be Debt-Free
“It is critical to remove all debts on one’s path to financial freedom since they might distract one from attaining one’s objectives. Credit card loans, vehicle loans, home loans, and personal loans are all examples of indebtedness.
E.g.: It is a red flag if a person spends more than 30% of their credit limit on a credit card. When dealing with credit cards, it is essential to pay bills on time and avoid using revolving credit, as this type of debt has a very high interest rate, ranging from 24-36 percent p.a.
If you have many loans, start by repaying the lowest one first, since this has a beneficial effect on the borrowers’ mentality and provides them a sense of accomplishment.”
6. Make a Decision on your way of Life
Consider what you would do if you didn’t have to go to work or wake up to an alarm clock every day. Which city would you like to call home? What would you do with your free time if you were given the opportunity? Keep in mind that the more luxurious the lifestyle you envisage, the more difficult it will be to achieve. The more minimalist you are, the more quickly you may achieve financial freedom.
7. Early-middle-age financial planning
The majority of people who seek financial advice believe they will never be financially independent, at least not when they want to be. They are unsure what they should do now to make it feasible afterwards. People in this age group are seeking to support their children’s private schools and college educations, as well as look into the potential of early retirement. They may have done some investment, but they lack confidence in their financial judgments and are afraid of making a mistake, so they do nothing.
8. Buy Life and Health Insurance
“Life insurance is essential to hold once you have dependents in one’s life. It provides monetary safety to one’s family if the bread earning member dies. However, one must not confuse investment plus life cover. One should focus on a pure life cover.
Health insurance provides coverage for medical expenses and hospitalisation. One should go through the medical policies available in the market and select the one appropriate to one’s need, gradually increasing the cover as age increases is a good idea.”
9. Maintain a moderately diversified and Low-Cost Investing Portfolio
There is no such thing as a magic formula when it comes to investing. Simply diversify your portfolio based on your time period and risk tolerance, and keep your costs low, as low fees have been shown to indicate higher results. A low-cost target date fund is the simplest method to do so. You may put all of your money into the fund with the year closest to when you want to retire because each fund is adequately diversified to be a one-stop shop. As you approach closer to your goal retirement date, it will automatically become more conservative, allowing you to set it and forget it.
10. Create an Emergency Fund
“One never thinks that anything can go wrong with us. However, man proposes, and God disposes. So, one should always keep 6-12 months of living expenses as a cash reserve to meet unforeseen events.”
Why Choose Loans from Omozing?
Omozing helps make Smart Money Moves for a Lifetime. They strive to get lowest interest rates and best terms for your Online Applications at www.Omozing.com . We’ve made business lending smarter, faster and easier by transforming the approval process from stumbling blocks to stepping-stones. This enables borrowers to not just get access to capital, but also understand what areas they need to work on in order to enhance their credit profile. Omozing ensures that Borrowers get a secure, safe and reliable application process that be tracked online.
5 Reasons to choose Omozing
1. Loans from INR 10k to INR 10 lakhs
Personal Loan Interest Rates starting from 0.8% p.m, and Loan amount ranging from INR 10,000 to INR 10,00,000. The Minimum and maximum repayment period ranges from 1 month to 48 months. CIBIL 600+ all company categories (including LLP, Self Employed, Proprietorship)
2. Cutomised Tailor Options
- Depending on your demands, we may provide quick financing of varying quantities at affordable interest rates.
- You have the freedom to utilise your loan anyway you want, whether for business or for immediate personal needs.
- Flexible repayment options depending on your specific cash flow and budget, as well as conditions that is beneficial to your position.
3. Lower CIBIL
While most lenders require borrowers to have a CIBIL score of over 750, at Omozing.com provide loans even with 600. Besides the CIBIL score, we also considers your age, employment status, and net monthly income.
4. Ways to apply
You can apply for a personal loan through us by 2 ways:
1. You can download our Mobile Application from Google app store.
2. Apply on portal using out Personal Loan link
5. Prompt Loan Disbursal
An easy online application process facilitates speedy verification and disbursal of loan. Get KYC verified from the comfort of your home and have our loan manager take care of an instant transfer of funds to your account.