3 myths and misconceptions about financial independence

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A new year is a new beginning.

Seems like 2021 came with hope and optimism after 12 months that fully tested the bark of each of us. It is time to think about what we have achieved so far and the changes we can make for a better future. For some people, the “financial independence” means, rather, a grim dream; an unachievable thing or a situation we need to think about later. Well, for many trainees who have crossed our threshold, this seemingly capricious dream has come true. Here at Profit Point they understood that there were myths and misconceptions about financial independence.

Myth # 1: You need to be debt free to achieve financial independence

If you have debts and your goal is to achieve financial independence, you will think that the only way to achieve this is to get rid of debts completely. Try to look at things differently and think that financial freedom is not necessarily a number. It’s the idea that you can do whatever you want, whenever you want, with what you have. If you have a debt of 1000 USD  per month, but you have sources of income that bring you 3000 USD per month, you still earn 2000 USD  per month. And if you manage to handle this amount on a monthly basis, then guess what? You are financially free!

Many people think that having debt is a terrible thing. However, there are high-performing and low-performing debts. High-performing debt, for example, can be considered an investment that can help you increase your cash flow. Full payment of debts can bring you a huge mental benefit. However, try to go on a balanced path. Use your debts as a tool to achieve your goals. If they cause you discomfort, it is best to get rid of them as soon as possible.

Myth # 2: You are too young to think about financial independence

You specialized in one field and you didn’t do it overnight. You’ve spent years preparing to get to where you are now. You set goals, you worked, you were persevering, you celebrated small victories and here you are. The same can be said about financial independence. It is by no means a success overnight! Anyone who tells you anything else is trying to sell you something.

Financial independence starts where you make an assessment of your financial situation, you establish what you want and you act to get where you want. The sooner you start thinking about this, the faster you will achieve this goal. Do you really want to wait until financial independence becomes a necessity for you? If you want to get on a waterline and ensure a better future, it’s worth thinking about from now on.

Myth # 3: You need to retire to enjoy the benefits of financial freedom

For many people, the idea of retirement makes them think of the freedom to do what they want with their time and money. But just as well, there is the belief that with retirement age, diseases and money are even less and not enough. And they’re right. Because the money they are going to receive represents about 40% of the salary they had during their lifetime. Life means more than working until old age with the thought that only then will you end up living well.

By planning your financial freedom earlier, you are able to enjoy the many opportunities that life offers you. If you haven’t started thinking about it yet, then there is no better time than now. And you don’t have to have everything in perfect order to take the first step. In the hope that we helped you become a little more aware and invest in yourself for a better life, we wish you a year with many achievements!

finance

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