Speaker 1: Step one for yourself to make the decision that some of your hard earned income is going to you at the end of the day, not your local shopping store barber or massage therapist make the decision that you are going to take control of your finances to create a budget document or your income that is coming through in all of your expenses that are going half.
Step three, specify whether your expenses are a necessity for once. Now you know what your expenses are needed and what you can possibly cut down upon. A lot of the time I find that people are mindlessly spending money because they’re not documenting where the money is going. This is the surprise stage where you get all those unwanted surprises of what you have been wasting your money on. If you are aware of your income coming through, your exact expenses going up into a longer term plan to ensure you are saving week by week, step four create an emergency fund of three to four months of expenses. Unfortunately, being human. Anything can happen to any of us at any point in time. We might enjoy your hand whilst playing sport and not be able to work for a couple of months. We need money to fall back on in case of emergency so that we are not relying on others financially to get us through step five, save a certain percentage of your income and put it into investments. Now, investments are things that will generate income for you in the future. Our investment account can be put in a range of assets, including real estate, the stock market or bonds.
Step six, build up your assets and use the power of compound interest to become financially free. If week by week we are saving money and putting it into our investment account, we can use the power of compounding and time to grow our wealth. It’s quite amazing, right? When we build up our investment account large enough so that it is generating enough interest back into account that we can live off them, we are financially free. All it takes is some discipline, some time put into learning about investments, personal finance and a little bit of patience, and we can get to a place of financial freedom. Step seven, review your financial plan monthly to show your financial habits are healthy. It would be nice if we could work out once and be fit for life. Unfortunately, fitness is something we need to do regularly in order to remain healthy. It is the same with our financial habits. Financial habits are not just formed by one day of planning. We must regularly review our financial plan and financial habits to ensure we are still on the path we want to go. To ensure we are saving, we can wake up and constantly growing our investment account until we reach financial freedom.