4 Steps 4 Financial Freedom



4 Steps 4 Financial Freedom


By Brett Sifling


Independence’s day is quickly approaching! It’s a great time to reflect on our freedom and what it means to be an American. However, many of you are not free. So, what does it mean to be TRULY free? Financial independence. Having financial independence allows you to live your life to the fullest and do what you want.

I wanted to share four steps that you can start today that will help you become financially free:

1) It’s all about the plan
First thing’s first, you need to get organized and do a comprehensive overview of your finances. You should put together a monthly budget and figure out how much you can save. Then, spend some time thinking about your goals. What is your primary financial goal? Is it to buy a home? Retire by age 55? Pay for your children’s college?

2) Open an investment account
Once you figure out your goals, you will want to open an investment account. Different types of accounts are useful for different reasons, depending on your situation and goal for the money. For example, if you are looking to save for retirement and you qualify, you might consider opening a Roth IRA. This account will allow your post-tax contributions (money in the bank) to grow tax-deferred and the gains are not taxable at retirement. This is the only account where an individual can get tax-free money at retirement.

3) Contribute on a regular basis

Now that you have an investment account, you will want to contribute to it on a regular basis (that is why you do a monthly budget)! A good starting point is to contribute 10% of your gross income. This means if you have a $75,000 salary, you should aim to save $625 per month for investments. If you live a comfortable lifestyle saving 10% of your income, bump it up to 15%, and then 20%! By adding to your investments on a regular basis, you can take advantage of a strategy called dollar cost averaging. This is a method that takes advantage of fluctuations in the market and allows you to build an asset base for the future.

4) Live a balanced life
Lastly, make sure that you are living a balanced lifestyle. If you don’t save at all, you will never have financial independence. If you save every penny you make, you will probably not enjoy the fruits of your labor. There must be a balance. It’s okay to have fun, just make sure you are living within your means and not overspending at the expense of your long-term financial goals.

As always, feel free to shoot me an email if you have any questions. It’s always a good idea to consult with an investment advisor, as we have the resources and knowledge to help you put together a plan and invest appropriately.