5 steps to financial independence

There is a difficult, but real way to retire much earlier than the legal age – to accumulate a volume of assets sufficient for life when working remotely or part-time. The scheme for achieving financial independence, that is, a situation in which you freely manage your time and choose comfortable working conditions, can work even for people with an average income level. Here is the sequence of actions.

1. Answer: why do you need financial freedom? Perhaps you are aiming for an early retirement, you want to travel more or spend time with your family – or you just hate your job and are already tired of everything. It is important to determine the goal and stick with it for many years. It will take a substantial motivation to achieve our plans and resist the temptation to spend money here and now.
2. Track expenses. You will be surprised at your expenses when you begin to fix them. In this case, you will not be able to extract the maximum benefit from the money that you already have, if you do not know where they are going. It is easier not to use cash, since their movement is difficult to track: card statements in the Internet bank are more suitable for this. Record all expenses in a single file or a special application for your smartphone. Ideally, you will group expenses by category – for example, food, housing, clothing, restaurants.
3. Start tracking your personal net worth. Net capital is the value of your assets (real estate, the amount of savings on deposits, account balances, the cost of securities and some other valuable things) less liabilities (for example, loans). To track this indicator is very important – he is who determines how well you are moving towards financial independence. Fix its value on a specific date, for example, at the end of each month or quarter.
4. Set financial goals. Everything is individual, but you can take as a basis the size of your annual expenses multiplied by 25. That is, if you spend 300 thousand rubles a year, then you will need to accumulate 7.5 million rubles for financial independence. For some, this amount will be quite enough, but for someone – not. In addition, it is necessary to take into account inflation. It is also important to determine the specific date by which you plan to accumulate these funds. And the plan must be realistic.
5. Create a monthly budget. It should include a plan for monthly income, expenses and investments. Typical advice from financial experts: save and invest 10–20% of your income. But if you want to achieve financial independence earlier, then you will probably have to postpone 40–50%