Getting Started With Investing - 5 Steps To Building Financial Freedom

 

The biggest misconception about investing is that you need a lot of money to do it, second to the idea that you need to be smart or capable to do it. In my experience you don't any of those things to be a successful investor. Many investors use not just other peoples money to invest but they also use other peoples knowledge, time, resources or abilities to grow their own investments. Look at your current job, what is the owner of the company doing other than using your labor, skills and time to grow their investments. I would guess that a majority of the business owners, especially those with a dozen or more employees, couldn't do each and every job under them to keep the business afloat let alone profitable. This is why I'm so passionate about Financial Freedom. In this article I want to go over a couple steps you can take to work towards that goal as well. So lets dive in.

1. Get your spending under control.

Just like in fitness, you can't out work a bad diet. The same idea applies to investing and Financial Freedom. If you cant control how much you spend it wont matter how much you earn through your job or from your investments, it will be gone as soon as you get it. That's one of the mindsets that plagues most of American's thinking now a days and why the divide between the rich and the middle class, let alone the poor, is growing wider and wider. Since this isn't an article about controlling your spending I wont go to in depth here, but here's a few strategies to get you started. 

First, start by doing an analysis of your past spending, this is easiest done by going through your bank statements and analyzing what you have been spending your money on and how much money you've been spending at Starbucks. 

Second, which is probably the hardest thing, cut out all unnecessary spending. Be objective here, I love coffee just as much as any 22 year old white girl (I am not one of them but I like coffee just as much) But do you really need to spend $24.37 on three venti caramel latte's every day? Decide for yourself what is necessary and what isn't, after all most of us want Financial Freedom so we can enjoy life to the fullest so if coffee is your enjoyment then maybe you should buy all of those lattes each day, no one is going to come into your life and do this all for you so you have decide where to make sacrifices today in order to live your best life tomorrow. 

Third, What fixed expenses can you negotiate down or cut out entirely? Have you ever tried to refinance your car loan so that your not paying as much each month? What about your credit card debt? have you thought about transferring all of the balances on to one bill with a low introductory rate? Again this isn't the focus of the article so I wont go to in depth and not every bill or fixed expense will you be able to negotiate down or get rid of entirely but that doesn't mean you shouldn't try. 

For more tips on getting your spending under control their is countless resources out there, give it the old YouTube university search and see what come up.

2. Determine your "WHY"

In Simon Sinek's Book "Start with Why" he talks about how before you can really grow or create a strong or enduring and successful business you need to have a great why and it cant just be about money, the pursuit of money alone usually isn't enough to drive people through the really tough times that being an investor or being an entrepreneur will bring. Determine for yourself why you want that money, what will you do with it? Envision that outcome while you are on your path, not just a fat bank account. For more help with that I recomend getting Simon's book and listening to it. I bring it up second instead of starting with it, simply because getting your spending under control is great for anyone not just those seeking a great life or growing a big company.

3. Start small

This may make it seem like getting to Financial Freedom could take years and while it does for some it doesn't have to. I recomend starting small because investing and the "risk" that it brings, is a risk that some do not know how to overcome. The idea of "risking" your money that you worked for to make money is a hard pill to swallow for some. So start small, your risk taking ability functions just like a muscle. The more you risk the more comfortable you will be with risking. So download an app that allows you to invest in stocks or crypto for a few a bucks and put a $5 bill into it and lose it. Yup you read that right, lose the $5, buy anything and simply lose it. Get over the fear of losing money, now reload another $5 and try not lose it. Maybe you only lose $1. Great now try to turn that $4 back into $5. You don't need to turn your $5 into $1000 or a million. Turning $4 into $5 is a 25% gain. That is a very good gain. Especially if you did that in a short time frame. Don't expect that level of gains everyday especially if you are looking into the stock market. Now this step is something you should be doing in the back ground during the next couple of steps.

4. Learn

Great you've made it this far which means you are probably investing by now, probably only a couple dollars but that is fine. You probably have lost some if not all of your investment and if you have its ok, it wont be the end of the world. If you made money then great! The next thing you need to do is learn first how to not lose money in an investment, then how to make gains on your investment and then the final step is learn how to keep those gains and not lose them. There is a lot of great material out there for this and each niche of investing is going require different rules. Stocks and crypto investing are fairly similar in terms of how to do those three things but there are other types of investing and better kinds than those if your looking for Financial Freedom. Real estate and business investing are great ways to achieve Financial Freedom. What ever you are interested in go and find the best Podcast for that niche, I guarantee there is one. Listen to it and implement the things they talk about into what you are already doing. If you want any help on specifics reach out to their community or if you would like I do a free 30 minute start up consultation for anyone getting started. Follow the hyper link if you want to learn more about that. For other resources to learn from go check out my recommended books, sites and tools.

5. Strategize

This is where things get fun, the strategy behind investing and reaching financial freedom is my favorite. Again there is a lot of material on how to do all of this in-depth so I'm just going to give a brief overview on a few things. 

For every bill you need an investment that pays for that bill. with this strategy you want to minimize the amount you are paying for a good or service each month. and Then you find a way to have other people pay for that bill. Think about it, if I knew that my phone bill was $100 a month is there a way that I could get a rental property that someone paid the mortgage and expenses on and it cash flowed the $100 a month that I needed to pay for my phone bill? It is entirely possible to do this, while its not as easy I make it seem in the last couple sentences, this is the foundation that great Financial Freedom relies on. 

Another way to strategize is finding investments that take the least amount of your time to manage. no matter how big or small if you could invest in something that pays out 20% a month with none of your time to manage would you do it? this is the idea of passive income, how can I invest in something that makes sense that requires as little of my time as possible. For instance I just purchased some software that allows Shopify store owners to find and replace text in their store listings. I paid $5130 for the software and I make $200 a month starting out. Best part is, it require none of my time. I don't even know how to code but that doesn't stop me from leveraging other peoples talents if I ever need to fix a bug in the software. This type of investing is great for my goals and strategy and is helping me on my way to Financial Freedom.

Conclusion

All that is left is for you to go and begin, I understand it can be scary. Just imagine how your life might be if you made $5000 a month from work that you could from your laptop in about an hour or two a day? Sounds impossible, right? I assure while it is not easy and will take longer and be more difficult than most people online make it sound, it isn't impossible. As always I hope this information can help at least one person. I am not a financial consultant so this isn't a recommendation to do anything, but it might give you an idea for something that you can do to change your life. If you want any more help or ideas with this, or if you would like to see what else I work on, feel free to check out my website. Go out there and change your life!