This is similar to planning a journey. And in case you missed it, you may want to read Part I of this article on starting your journey to financial independence “The Road to Financial Independence“.
Like planning any journey, here are a few tips for planning your journey to financial independence.
Plan the journey – What is the most appropriate road for you to reach your destination? What are your options: long vs. short term or risky vs. safe? For instance, it might be more worthwhile for a much younger person to invest in stocks, which is a longer term investments, and could also be regarded as risky; however, for a much older person, a shorter term and less risky investments where the money is not tied up for too long a time and is safer, may be more ideal.
Prepare for the journey – Take time out to learn and gain knowledge on growing and managing your money. This could include reading, seminars or discussions with friends and colleagues. I can tell you from personal experience that who (friends, family, colleagues etc) you regularly associate with, goes a long way in influencing the financial choices you make, as well as how you live your life.
Stock up for the journey – This involves gathering the relevant resources for the journey, such as the capital, and even the relevant professionals that could assist you in making the right decisions. Most times, gathering the capital might mean having to budget. Though I’m a fond believer of living and enjoying today for what it is, that does not mean to say I don’t forgo a few immediate pleasures in order to reap greater pleasures in the future by the grace of God. So if attaining my goals means going to the cinema and visiting my favourite restaurant only once a month as opposed to weekly in order to have money for savings and investments, so be it.
Travel cautiously – Before making any investments; whether stocks, property or business, critically evaluate these financial vehicles. What are the risks, returns, or retrievability factors? Be as wise as a dove, but as cunning as a serpent. Don’t be quick to jump on the bandwagon just because everybody is doing it, however the fact that there is a lot of interest should alert your curiosity.
Make regular stops to revaluate – As time passes by, the market changes; what was formerly lucrative, may not be anymore, and there will be new opportunities for investments. Therefore, it is worthwhile to periodically revaluate your investments portfolio and make sure it is on track to meeting your end goal. You might want to consider making use of a financial adviser who could not only advise you, but manage your portfolio as well.
You need to start now to make your way up the road of financial independence; don’t leave for tomorrow what you can do today. I hope to see you at the top of the road.
You can also read Part I of this piece The Road to Financial Independence