10 Solid Tips to achieve financial freedom faster




Solid Ways to achieve Financial Freedom faster10 Solid Tips to achieve Financial Freedom Faster


Financial freedom is where you have enough money to spend, your regular expenses for life and fulfill all your financial goals in the future. Earning salary or income from the business is not enough. One should not struggle accumulating money over their lifetime to achieve their financial goals.  How about achieving financial freedom faster say at 50 years of age? Whether you would get excited if you are able to achieve financial freedom at 45 years of age? In this article, I would detail 10 solid tips that would help you to achieve financial freedom faster than you ever thought.

What exactly is financial freedom I am referring here?

Financial freedom is not just becoming rich (don’t ask me how much to earn to become rich). For me, achieving financial goals faster than we ever though even in our absence is a financial freedom. Here are some examples:

1) Buying a dream home

2) Giving quality education to kids (including foreign education if they wish in the future)

3) Accumulating money for daughter’s marriage

4) Accumulating money for retirement, etc.,

All above financial goals have a tenure to achieve. If you are able to achieve those financial goals faster, then you have achieved your financial freedom. E.g. if you think you would need Rs 10 lakhs for child education in next 10 years, if you are able to achieve them before that period, you are free from those financial goals.

10 Solid Tips to achieve Financial Freedom faster

Let us jump into the main topic now. Here is are few tips which can help you in this journey.

#1 – Have adequate life insurance + Health insurance Plan

#2 – Set financial goals

#3 – Follow the rule: Expenses = Income minus savings

#4 – Create multiple sources of income

#5 – Invest in high return plans suitable to you

#6 – Be ready to face financial crisis

#7 – Get rid of high cost debts

#8 – Two credit cards are enough to use

#9 – Cut taxes if you can

#10 – Consult financial advisor, if required

10 Solid Tips to achieve Financial Freedom faster

Now let us go into detail with an action plan.

#1 – Have adequate life insurance + Health insurance

The first step in financial planning is to have adequate insurance.

Earning member in the family should consider taking a good term insurance plan (that comes with low premiums and high sum assured) to secure their family’s future even in their absence.

Life is uncertain. If you or your family member is sick and hospitalized, such hospitalization expenses would kill your savings. To avoid this risk, one should consider a health insurance plan for the entire family to safeguard their savings. If you are a job holder, your company would have provided health insurance plan. It’s time for you to review the sum insured and take a top up plan or an additional health insurance plan if required.

This step ensures that all your financial goals are achieved even in your absence or even if one is facing high medical bills due to hospitalization.

#2 – Set financial goals

What are your financial goals? It could be buying your dream home, kids’ education or retirement planning, etc., First set these financial goals which you wanted to achieve and then go over it. These goals should be SMART (Specific, measurable, attainable, relevant and timely).

Incorrect financial goal – I want to earn Rs 10 Lakhs for child education.

Proper way of defining the financial goal – I want to earn Rs 10 Lakhs for child education in the next 10 years (SMART financial goal).

#3 – Follow the rule: Expenses = Income minus savings

It is immaterial how much you are earning. You should analyze, how much you are saving. Here are a couple of examples.

Mr.Ramesh earns Rs 60,000 and spend Rs 50,000 towards expenses. His savings are Rs 10,000 per month.

Mr.Rajesh earns Rs 50,000 and spend Rs 35,000. His savings are Rs 15,000 per month.

The best way to have higher savings is defining how much you want to save. Spend balance.

It is not difficult. This is how I planned in 2010 and became Crorepati in 5 years (3 months ahead of time).

#4 – Create multiple sources of income

Are you doing a 9-6 job and depending only on salary income? Then achieving your financial goals might go on a slower pace. How about creating multiple sources of income. It could be getting rental income, part-time jobs, interest on fixed deposits, earn through blogs etc., Such regular income would help you to achieve your financial goals faster.

#5 – Invest in high return plans suitable to you

Are you investing in traditional investment options like bank FDs and post office schemes? It is time to switch to equity, mutual funds, real estate, etc., You can check how to invest in high return investment options based on their risk appetite and tenure of investment. You can save every month and invest in some of the best SIP mutual funds in India.

#6 – Be ready to face financial crisis

You would have invested in real estate, but have you seen people struggling for liquidity during financial crisis or now during covid-19 where realestate has crashed. Have you lost-job, then how can you survive for next few months without salary? Have you ever prepared for such financial crisis? One should always be ready to face financial crisis situations. Get prepared to have an emergency fund which would be useful during such crisis.

#7 – Get rid of high cost debts

High cost debts would eat away your savings. Here are a few examples

1) High interest home loans

2) Abnormal interest on personal loans taken by you

3) Credit card payments delayed and you are paying high interest on credit card bill outstanding.

Personal loans or credit cards comes with high interest rates. One should get rid of such loans as early as possible.  If you are paying high interest on home loans, switch to low interest home loans (e.g. SBI or LIC HFL who is offering low interest rate home loans) as soon as you can.

#8 – Two credit cards are enough to use

Many of us apply for several credit cards just because some bank is offering to us. We might not use them frequently too. In some case we make payment for one transaction and forget about it. Any missed payments would attract high interest rates. One can keep two credit cards (if one has some problem, other can be used) and call the bank and ask them to close the credit cards (to avoid any charges being levied in the future) and you can destroy such cards from your side.

#9 – Cut taxes if you can

Many individuals might not plan for income tax properly. Even planned, they might not invest in the right tax saving plan. If an individual is willing to take risks and expect high returns, they can invest in ELSS Tax saving mutual funds rather than NSC or PPF. If one is willing to save tax and use such tax savings as retirement tool, they can invest in PPF  (EEE status) instead of a ULIP. One can also check list of tax saving plans.

#10 – Consult financial advisor, if required

Finally, if you are saying, all this is fine, but I don’t have knowledge and don’t have time to even learn, then what should I do. First, I would advise you to learn and get educated about these financial things. One can also take help of financial advisors who can provide financial planning for a fee. One can pick-up right financial advisor who can provide unbiased view.

Summary: Financial planning is an Art. One can follow a disciplined approach in saving and investments and achieve their financial independence faster.

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Suresh KP

23 comments

  • Richard Alva

    Useful information and a lesson to learn specially now during the pandemic situation.
    Also if you can include where a NRI can park money considering FD returns are tax free. Thanks Sir.

  • Ram

    Dear Suresh, can you suggest us a better compounding investment plan preferably monthly for investment other than FD & RD

  • Maven Cruz

    Hi Suresh

    I remember 10 years ago i was in my mid 20s and all my friends were getting married and i said to my self i will not get married but i will retire by 35.
    I worked 2 jobs and weekends and also made my money work for me.
    I remember the first time i was on this site i think back in 2013 and i got all the information from you how to invest and save.
    I retired from work before i turned 35 and now all my investment is working for me.
    I just want to say Thank you very much for all the information you provide.

    Maven Cruz

  • Sudhir Mohan

    Very informative n useful , adoptable to everyone for economic freedom.Thanks .

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