Which Direction Are You Heading?
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to.”
“I don’t much care where –”
“Then it doesn’t matter which way you go.”
― Lewis Carroll, Alice in Wonderland
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Do you know where it is that you want to go? Do you have a plan for getting there? Financially speaking, which direction are you heading?
Knowing The Right Direction Towards Financial Freedom
Directionality is as important as anything in life; your direction – or heading – correlates with how successful you are in arriving at your final destination.
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If you are traveling in the wrong direction or if you have no direction at all, your chances for arriving at the intended spot are very slim, perhaps even non-existent. Sure, you may stumble across a few nice spots here and there and even find some peace along the way. But unless you give the universe an idea of what it is you want and a rough outline of your plan for getting there, the full realization of your dreams and desires will remain just that: unrealized dreams.
Want to make sure you’re on the right path?
To get out from under the ambiguity of not having a financial direction, here are some questions for you to answer. Think aloud, jot down, and ponder these over the upcoming days/weeks/months ahead. Once you begin to get clarification on these, then you can start to make a plan for how to orchestrate your life in the proper direction.
Answer these questions (remember there are no right or wrong answers; the only rule is just be true to yourself):
- What does Financial Freedom look like for you?
- At what age would you like to achieve Financial Freedom?
- How much money would it take per year for you to be comfortable?
- What skills and abilities do you bring to the table that people would pay you for?
- Would you be open to part time work to make ends meet?
- Are you currently saving in a 401k/IRA, etc?
- Are you currently building a passive income stream?
- What (if any) will be your income streams in retirement?
These are only a few questions to get your started on the retirement question. This question is brought up not as a means in itself, but rather to get you thinking about a financial plan for your life. If you’d like to retire by 60, move to a beach in Florianopolis, Brazil and live out your days listening to the sea waves hitting the shore at night, it is not only possible, but realistic if you have a plan for getting there. What you do now will dictate how your future unfolds. Think hard about these questions and start planning today.
What You Can Do TODAY
Consider the following while you contemplate the questions above:
1.Don’t expect social security to come to your rescue.
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You’ll need your own nest egg in retirement. I personally believe in investing in assets that generate passive income streams in order to keep from piecemeal selling my nest egg to make ends meet.
2. Start saving TODAY!
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Not tomorrow. Not next month. Start saving TODAY! Whatever you can afford, put away for a rainy day. Start up a high yield savings account and accrue compound interest (Compound Interest is rightly referred to as the Eighth Wonder of The World!)
3. Give yourself credit for each and every action you undertake towards your Financial Freedom goals.
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Celebrate your successes! Every step that you get closer to your goal is a reason to rejoice in your progress!
4. What Passive Income sources can you begin build today?
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One thing that every Financial Freedom seeker needs to have in place are passive income sources – sources that make you money, even when you sleep. Set up a brainstorming session to generate a few ideas and then act on those ideas!
5. How can you make extra money towards your ultimate goal of being Financially Free?
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To get to our passive income sources, we need active income sources. How can you make extra money towards your financial goals today? Put some ideas on paper and then pick the ones that make the most sense. Remember, get started TODAY!
6. What is your current savings rate and does is it on par with your Goals?
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How much are you putting away each month for that rainy day? Make sure that you are cutting out unnecessary expenses out of your life and putting those funds in a high yield savings account. Not only will you be saving for a rainy day but you will also be growing a passive income source – your money will be making money for you in the form of compound interest.
7. Do you have skills that the market would pay you for?
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Working a 9-5 job doesn’t provide the needed diversification for the down times. If your job is your 100% source of your income and you hit rough financial straits and get let at your job, you have just gone from 100% income to 0% income. Accountants call this “Concentration Risk”. Begin your diversification strategy today!
These are only a few of many ideas to consider. No matter where you are at in life, begin considering these and move forward from there!
“The great French Marshall Lyautey once asked his gardener to plant a tree. The gardener objected that the tree was slow growing and would not reach maturity for 100 years. The Marshall replied, ‘In that case, there is no time to lose; plant it this afternoon!”
– John F. Kennedy
What are you planting today?
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Disclaimer: (1) All the information above is not a recommendation for or against any investment vehicle or money management strategy. It should not be construed as advice and each individual that invests needs to take up any decision with the utmost care and diligence. Please seek the advice of a competent business professional before making any financial decision.
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