What Is The Key To Financial Freedom

What Is The Key To Financial Freedom

When Learning about the key to financial freedom, you need to look at the different parts needed to get there. It isn’t only about being owning a business and earning large amounts of money. Anyone can achieve financial independence by changing your habits. Send this article to a friend that could also benefit from reading this post.

Becoming Debt Free

According to Northwestern Mutual’s 2020 Planning & Progress Study, The average debt that an American holds is $26,621. Just 2 years ago it was at $38,000. There was starting to be a slow downturn with personal debt and it was reported that 26% of Americans stated that they had no debt to deal with. Then COVID happened.

The website has also concluded that 15% of Americans (18 or older) didn’t have a savings plan for something like this and will be prepared next time. I know that this pandemic has made it really hard to even try to pay off debt as fast as possible. This is why for the young adults that have none, try to avoid it at all costs.

Yes I know that debt can be good in certain context, but not everyone is out buying rental properties to make passive income. An ordinary person’s debt has a lot to do with shopping and maxing out credit cards.

In the pursuit of financial freedom, you must first find a way never to have debt or make sure that you will be able to pay it off fast.

Having A Good Career

Working at Mcdonalds or simply being a hostess at a restaurant for 10+ years isn’t going to get you anywhere towards a financially free life. I’m sorry if this sound harsh, but it is just reality. If you have the mentality of wanting to work your way up through a company then make sure that there is a huge benefit long term.

Like I stated previously, don’t expect to become the owner of a big chain restaurant by just starting out washing dishes. I’m not saying that these people need to be judged for working entry-level jobs in their late 20s or even at 30. It has to do more about them waking up and realizing how bad it actually is. If you never decide to make change then always expect to be the looker instead of the doer.

You need to go to school, get a degree or certificate that will land you a career with good pay. This is when you will have the ability to actually save your money and invest long term. Anyone can make the necessary changes to their life that can be a game changer. Take action and get started.

Investing Your Money

The last key to financial freedom in my opinion is investing your money. Once you have become debt free and found a good career, it’s now time to start investing more heavily. According to a recent study by pewresearch.com, it’s stated that 1 in 5 had invested in the stock market that only made $35,000 a year. The number of people investing needs to be more than 1 for every 5.

I know that a lot has to do with fear of putting your money in something that is always jumping up and down. No one likes to see the stock market drop and be in the red. It is scary, but it doesn’t last. Stocks will always go back up and then rise higher.

According to grow.acrons.com, it states,

Even with the latest market slump, fueled by fears that the deadly coronavirus will hamper global economic growth, the S&P 500 is trading at levels last seen a matter of weeks ago in December. And while this gauge is down less than 4% for the year so far, it’s still up almost 12% in the past 12 months, and a whopping 48% in the past five years.


48% in the past five years is really good and this just shows you the power of consistency. I mean if you really need more proof then look up Warren Buffett and his come up. This man has looked for opportunity, bought the lows, and reaped the huge gains long term.

If you don’t feel like investing in single stocks then I suggest that you aim for ETFs. This way, you are investing your money into something that holdings in multiple stocks. The next best step to do after buying ETF stocks is to put your money into dividend stocks. These companies (or ETFs) will pay you a dividend for investing money into them. I make about $1.50 a month in dividends, but that is reinvested (in fractional shares) towards the same stock. compound that over years (along with me buying shares), I will practically be on automatic with consistently investing my money.

The power of dividend investing and investing, in general, is one of the best things that someone can do in the pursuit of no financial worries long term.

Closing Thoughts

Writing about personal finance is such a fun an exciting thing to do. I get to do my research on the topic and put that information into articles that will be beneficial for readings that are looking for what I have already found.

I really believe that the basic steps to financial freedom is becoming debt free, finding a good job, and investing your money. If you skip just one key then it will just be harder to hit that goal of not having to worry about money problems later on. No one wants to be 40 years old and be worried about paying bills or putting food on the table.

We are given so much opportunity at a young age to shape our future selves and we never take advantage of it. That should drive you crazy thinking about that. I’m also pretty sure that you can witness money struggle around you. If for some reason you’re lucky, don’t lose focus that you need to also put in the work to achieve what your parents (or grandparents) have done.

Never expect or ask for anything. do it yourself. Seek advice when necessary and learn to get knocked down.

Thank you for supporting The Finance Starter and don’t forget to send this post to a friend that could benefit from today’s reading.

What Is The Key To Financial Freedom

One thought on “What Is The Key To Financial Freedom

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.