Everyone wants to be financially free or want to achieve financial independence, though only few able to achieve it. Reason? – people fail to understand the real meaning of financial Independence. They misunderstand  ‘financial freedom’ as being rich, not to do any job and live a luxurious life.

What is Financial Independence?

Being financially free means living comfortably with the help of savings, investments and passive income, that’s without any debt (:

Financial Independence is more about being debt free, living simple life and following your hobbies. It’s not about being rich but having less expanses with no debt/liabilities.

How can one achieve Financial Independence?

Financial Independence cannot be achieved overnight or in the short term. It needs planning and effective execution. Many people do plan very efficiently but fail to achieve due to poor execution.

Let’s understand the top rules which can help you to achieve financial freedom/Independence:-

1. Make a plan to achieve financial Independence. It’s a road map to guide you to achieve your goal successfully.

2. Keep realistic expectations- Understand your financial situation and time available to achieve this goal.

3. Make budget for every expense, even for the small expenses.

4. Keep track of your cash flows.

5. Spend less, save more and Invest wisely.

6. Make sure you are investing in the options which helps to give passive income.

7. Make sure you have enough emergency fund ( equivalent to 6 months expanses)  and health cover insurance.

8. Limit credit cards and pay off your debt asap.

9. Use cash wherever and whenever possible. It can help a lot to limit your spending and save more.

10.  Do not depend on only one source of income. Try to increase your income sources.

11. Create some passive income sources like income through freelancing, selling your art, blogging, YouTube, renting, dividend income, coaching etc. Some of these might take some time initially to generate actual returns. Though it’s always good to have another income source apart from salary or business income.

11. Take care of your health as ‘Health is Wealth’. Simple food/diet with regular exercise can help a lot in maintaining health and avoid unnecessary health problems. Exercise here does not mean to join expensive health clubs or gym; regular walk, some home exercises and yoga with healthy diet is enough to stay fit.