The journey to financial freedom is like climbing a mountain. When you start out chances are that you probably won’t picture yourself at the summit but once you dig deep, persevere and make a few sacrifices along the way, you will undoubtedly be rewarded with a breathtaking view after the hard climb.
Everyone wants the financial success and comfort that come with building up savings, planning for retirement, and managing finances wisely.
Attaining financial freedom is however a daunting task to achieve especially if you are debt-ridden, lack savings or are living from hand to mouth.
Despite all this, there are a number of ways you can build long-term financial success. With this in mind here are:
7 tips you can use to get ahead financially:
1. Spare a part of your income regularly
For investment options that give you returns above the inflation rate.
2. Look for clever ways of compounding your income
Choose options ike investing interest from treasury bills and bonds in money markets to compound it every 6 months in case you are invested in a 5-year or 10-year bond.
3. Budget your money using the 50-30-20 rule
50 per cent of each pay cheque or salary should be set aside for bills and necessary expenses while 30 per cent should be designated for day-to-day lifestyle expenses and 20 per cent should go into savings.
This is just an example and the more we save the better. Saving more than 30 per cent of our net income should be a good habit or at least a good target for our long-term financial wellbeing.
This rule allows you to pay bills, have fun and still be able to save. Having a balance is all about making the most out of your finances and your worth as a human being so that you can live the kind of life you want.
4. Reinvest dividends from Saccos, Stock markets and Chamas
By reinvesting your dividends, your money works for you and this is the height of earning money known as passive income.
5. Consolidate some of the hard assets that you have:
For example, if you own 5 pieces of land, you can sell some in your 30s or 40s and invest the cash in the money market or bonds to generate regular cash flow.
6. Replicate Rhythm of an Income Source
Once you have found a rhythm in one source of income, work to create a second one so that you have multiple sources of income.
7. If in business, work to increase the cash flows in your business
This allows you; over time so that you can pay yourself more and set aside part of this regularly.
Invest in your self-development by learning new skills to increase your ability to offer more value and earn more over time.
It is also important to invest in social and business networks where you are likely to access opportunities in your area of expertise or business.
