Financial Freedom: The true measure of success in your money life.
– Vishal Dhawan, Chief Financial Planner, Plan Ahead Wealth Advisors.

 

“Freedom is the oxygen of the Soul” is both one of the simplest and yet one of the most complete definitions of freedom that I have come across. The word freedom evokes a sense of hope, inspiration, choice and joy all at the same time, and could mean very different things to different people. Financial freedom is something which can give us the same sense of emotions of liberation for the money side of our life. One of the common things that we hear from investors when they define the word “Financial Freedom” for us is: When I do not have to work for the money and can actively decide how, when, and with whom I choose to associate in my professional life. One of the most efficient ways to achieve financial freedom is to create a financial plan for yourself that can enable you to be financially free i.e. decide how you wish to lead your life.

One of the most efficient ways to achieve financial freedom is to create a financial plan for yourself that can enable you to to be financially free i.e. decide how you wish to lead your life.

However, you need to remember that financial freedom is not a gift, but an achievement. We have to put in active efforts to achieve this phase of financial freedom in our lives. To put it simply, in order to achieve financial freedom we should take certain conscious steps and in a disciplined manner, which include:

1. Know where you are: Write down details of your current financial life – your expenses, your income, your assets, and your liabilities, essentially everything that is related to money in your life. This step may seem very unimportant, but nothing helps like putting pen to paper.Having ten things at different places in your mind at different points in time and having ten things on a sheet of paper in front of your eyes are two different things. Writing details of every financial detail of your life helps to ensure that you do not miss out on anything, and also creates an inventory in case something unexpected was to happen to you.

Not having clear goals can prove to be the biggest roadblock in our journey towards financial freedom. Setting life goals allows you to gain clarity on where you want to go with your life, remain focused on all of these goals, and also helps in validation of all that we have been thinking about in our lives.

2. Crystallise your goals: Knowing where you want to be is absolutely critical. We like to refer to it as defining your life goals. We often face situations in our life where we feel listless and we wonder about where we are heading. Not having clear goals can prove to be the biggest roadblock in our journey towards financial freedom. Setting life goals allows you to gain clarity on where you want to go with your life, remain focused on all of these goals, and also helps in validation of all that we have been thinking about in our lives.

3. Build a roadmap: A financial plan is a roadmap for your financial life. Along with your financial goals, it lists a set of actionable that should enable you to get to the point of financial freedom. Prepare a financial plan or get one made for yourself. A financial plan will outline for you where you should concentrate your energies on and what actions you should take to live the life you have dreamt of for yourself and your family.

4. Take action: Step one to three was like setting up a base camp, this step is where you will actually start climbing. This is the most critical step. Now you have to work on the action items listed in your plan right away. Remember procrastination is the biggest enemy of planning, so remind yourself constantly to implement the plan.

5. Stick to the plan: Discipline is the key here. There are times when we get disturbed by a multiple items including negative news, political uncertainty, global events, etc. However, through these crests and troughs, it is critical to stick to the plan, unless your goals change.

6. Review your plan: Revisit your plan once every year or once in two years and make necessary revisions if required.

These steps may not give you financial freedom tomorrow but remember that just like a journey of a thousand miles begins with a single step, your journey towards financial freedom begins when you firm up your mind that “Hum Honge Kaamyaab”.