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Financial Freedom - Achieve Financial Independence
The First and most important step to achieving financial freedom is understanding what exactly financial freedom is.
Financial freedom is the ability to stop worrying about finances. Being financially free means that you don't have to worry about losing your job. It means that you have steady streams of income from multiple sources that allow you to live your life free from the shackles of financial stress.
Financial freedom seems like a pipe dream to many, but it is achievable. The key to becoming financially independent is creating multiple streams of income. By this, I simply mean income from numerous sources. This simply means not putting all of your financial eggs into one basket. This way, if one income stream dries up (for example, you lose your job) you can still live your life stress free with income from another source.
Creating Multiple Streams of Income
As I said above, the key to becoming financially independent is to create multiple streams of income. This sounds complicated, but in reality, it is quite easy.
Your first stream of income is your full time job. This is probably most people's primary stream of income, and a lot of people's only stream of income. Many people would be financially devastated if they lost their job, their primary income stream.
There are numerous ways to create additional streams of income. These can be broken down into investments, part-time work, and online opportunities.
The easiest way to create investment income is to open a 401K or IRA. These are retirement accounts, and they won't help you achieve financial independence in the short term, but they will allow you to be financially independent when you reach retirement. For example, my 401K grew by $20000 this year alone (that is not even including my contributions). Although currently I can't live on $20000, I know that number will continue to grow as I contribute more money to the account, and as my investments grow. I started my 401K with only $5 per pay period, and now I contribute 5% of my income. If I can do it, anyone can.
Another way to create additional income is through non-retirement investment accounts. There are numerous different types of these accounts available, from brokerage accounts where you can chose your own stocks to mutual funds that invest for you. If you are a novice investor, there are numerous funds available that do all of the work for you, so you don't have to stress about it. Check out the Hub Three Investment Ideas for the Hands Off Investor for some ideas on stress free investments that will help you create an additional stream of income. If you are weary of the stock market but still want to create income through investments, check out peer-to peer lending websites such as Lending Club. These are websites in which you lend small amounts of money out to people just like you, and they pay you back with interest. I started with Lending Club about a year ago with only $500, and it has already grown to $600.
Another, albeit expensive, way to create investment income is through rental properties. If you can afford the upfront cost of buying a rental property, the income stream you can create by finding renters could potentially rival the income you receive from a full time job.
Investments are great ways to create additional income streams. The downside of utilizing this method is that you need money to make money, so if you do not have additional money to invest, you can't create an income stream.
Investing isn't the only way to create an additional income stream. Working part time can also boost your income. This doesn't necessarily mean working part time at a minimum wage low skill job (although if that is what you want to do, go for it). There are numerous ways to work part time on your time. For example, you can join a direct sales firm such as Pampered Chef or Mary Kay. You can sell these products on your own time, and don't have to be stuck to someone else's schedule. In addition, most of these firms offer you a percentage of the sales from people that you recruit. If you are going to go this route, make sure that you join a firm that is reputable and has a great product. Some firms say they sell products but are actually pyramid schemes, with the main goal of getting you to recruit as many people as possible. Research the companies and only agree to sell the products that you believe in.
There are numerous other odd job opportunities available for those who look. Check out the Hub Ways to Make Extra Money Without the Internet for seven additional ideas for part time work that can help you create additional income streams.
Opportunities for creating additional income streams abound online. Whatever your interest is, you can probably find a way to make money doing it online.
There are opportunities, artists, photographers, resellers, consultants, creators and more online. My third stream of income was created through E-Bay. I buy items at garage sales and I resell them on Ebay for a profit. In my first month taking this side job seriously, I made over $100. I made over $200 in my second month. As I learn what to look for at garage sales, my income from Ebay steadily increases.
I also create income through HubPages. Although I don't put enough effort into it to create a substantial income, many people use Hubbing as a primary source of income. There are some Hubbers who make 30-40K per year just through their writing. You can join Hubpages and make extra money by writing for this site.
For more ideas on how to use the internet to make more money, check out the Hub Ways To Make Extra Money and Create Income.
Achieve Financial Freedom
As I have shown above, there are numerous methods of creating additional income streams. Having these streams will lead you to Financial security and ultimately, Financial Freedom. There are methods available for people of any income level, any skill level, and any education level. Anyone can achieve financial independence if they put forth the effort.
I'm sure that there are numerous other ways to create income streams that I didn't discuss in this article. I would love for you to leave suggestions in the comments.