The path to financial independence

If you are like me, you would like to one day be financially independent. That is a very difficult goal that only very few people are able to achieve.

The following wikipedia page has a very good definition of what it means to be financially independent. Check it out, it is worth the reading (come back here once you are done!): Definition of financial independence

This topic can keep you busy for the rest of your life. The aim of this blog is to give you a very high level summary of the various advices you can find on the web.

It is not meant to be an exhaustive and complete list, it is just a  starting point to the process of achieving financial independence.

Become financially literate

This is an absolute must. You need to have at least a basic understanding of how to manage your money.

Robert Kiosaki is always emphasizing financial education in his books. He says that cash flow is the key, so understanding how much money comes in and how much money goes out is the beggining to understanding your finances and to set yourself up to be financially secure. There is much more to financial education than just understanding cash flow.

I will blog some definitions and practical applications in the near future.

Have a financial goal.

Set yourself a goal and stick to it. Put in your mind that you can achieve anything that you want and work hard towards achieving your goal.

Write down the goal, memorise it, think about it, motivate yourself to always act towards achieving your financial goal.

An important word of warning, don't become a slave of your goal, the goal can change as your circumstances change. Your are the master of the goal, not the other way around. 

Build yourself several different sources of income

The key from this point is not to put all of your eggs in one basket, but to diversify. If one of your sources of income is not doing very well, you have other sources of income that are doing well.

Just off the top of my head I can think of the following streams of income: real estate, shares, online, allifilate marketing, ebay shops, income from online activities, tutoring (if you are tutoring is not passive income but it can help you).

Robert G. Allen has written a very good book about this topic. Refer to Multiple Streams of Income for more information about it.

Keep yourself motivated 

The path is not easy, if it was everybody would be financially independent. The point is that it is achievable with a lot of work and determination. And you should start now. Start small and keep motivated. 

Set yourself a goal and start working towards it. Take action as soon as possible, a small step is all that will take to start the journey to becoming financially independent.