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5 best ways to reach financial freedom

Financial freedom is within our reach with these five ways.

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Dollar bills and coins

For the past 13 years as an entrepreneur, I’ve been working hard to keep a balance between having no stable income and still being able to grow my assets to reach financial stability, towards financial freedom.

What about you?

When was the last time you did something to be closer to your financial goals? Found an app that helped you save? Budget your expenses? Or checked the management fees for the asset you bought last year (and not even being sure what exactly that was)?

Yes, I know what the answer is and I was no different. However, I did make huge steps in the past decade. I’m investing, optimizing and learning new ways to reach my financial goals faster and cheaper—on my way to controlling my finance and freedom.

Here are some of the best ways to reach financial freedom and live a happier life:

1. Learn to invest in the stock market

Nasdaq

Investing in the stock market can be risky, but the risks will pay off eventually, especially if you’ve played your cards right in the market. (Photo by bfishadow via Flickr. CC-BY 2.0)

The stock market is one of those places people are deeply afraid of. True enough, it’s scary. There are lots of unknowns, and the worst thing is it’s “risky.” Still, after really understanding how economics work, I can now say that if you are NOT in the stock market you are being very risky. And in your mind, you’re actually trying to play it safe, right?

Here’s an example: as a rule of thumb, the stock market on average goes up 10 percent every year. You can gain this if you invest for the long-term. If you are parking your money on your savings account, you’re probably not gaining even more than the inflation rate. This means you’re actually losing money.

2. Invest in several real estate projects

Neighborhood

Compared to the stock market, investing in real estate looks like a safer choice. (Source)

Real estate counts as a safer way to invest but it’s much more work. However, it’s important to diversify your investments. I started investing through relatively easy-to-join funds and groups. Now, I’m looking at other deals to buy property and rent it out on Airbnb. Good real estate deals don’t have to be around where you live or even at the same country you live. It’s a matter of finding the right opportunity at the right place.

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3. Open an IRA

Saving for retirement

If you open your own IRA, you have more control of your account, and you’ll also get good tax benefits. (Photo by American Advisors Group via Flickr. CC BY-SA 2.0)

Just like everyone else, I had different types of funds and benefits I got from previous employers. I realized that the people who manage that money for me don’t care about me as much as I care about myself, which is not exactly a surprise. Also, they are more expensive and perform worse on those investments than what I gain. So, I decided I’m consolidating it all—whatever I could—into a single IRA fund that I manage myself. Through that, I know exactly what fees I’m paying and what is my exact portfolio. I also gain much more than the benchmarks. Oh, did I mention that that are great tax benefits to that?

4. Understand the value of compound interest

Piggy bank

The small amount of money that you save can grow and become more valuable than expected with the help of compound interest. (Source)

Compound interest is indeed very powerful. The earlier you start using it, the more powerful it is. This also means you not only need to start saving and investing as soon as possible but also that every $1 you save is actually worth much more than you think. Think about this next time you buy your Starbucks coffee, or a branded product when you have an equivalent which is cheaper.

5. Always optimize your financial life

Budgeting, reach financial freedom

Improving your budget is one way to enhance your financial life. (Photo by Ken Teegardin via Flickr. CC BY-SA 2.0)

There are always things that can be improved. You can always do better budgeting, save more, find cheaper products or make more money on the side. The bottom line is this, we all leave our finances to “when we will have time” and “be ready.” But we never have time and we are never ready.

So, stop ignoring this. Stop outsourcing your financials completely, thinking that it’s only for experts. It’s not and doing so adds a huge additional expense for you to shoulder. All banks and other kinds of advisors would like you to think it’s complex. You should learn every day what you can do better in order to reach financial freedom. 

The next step is to execute.

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

Shlomo Freund is a financial mentor helping entrepreneurs with financial planning to reach financial freedom. In the last 13 years Shlomo built several companies while investing and saving towards financial stability. He co-hosts the popular podcast "China Business Cast” about business in China, and has been blogging on Startup Noodle about his entrepreneurial journey in China. He is a father+1 and location independent. Currently, spending most of his time between Israel and China. Loves to travel. Interested in investments, personal finance and interesting hacks to get one step closer to financial freedom. He is passionate about startups and entrepreneurship as a way to pursue one's dreams and lifestyle. Wish to know more? Check out Shlomo’s website.

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