Who doesn’t dream of becoming financially independent? Your friends who succeed will tell you: it’s a dream come true. There are many myths and misconceptions about financial independence, and if you’re on this page, it’s because you want advice on how to go about it. But as with any ladder of progression, the quest for financial independence is strewn with levels just like in video games. Regardless of one’s heritage, everyone is expected to start at the first level, work through different levels of experience, and realize their full potential to reach the last level.
Your income is not your wealth
Most people believe that the key to wealth is well-paid work. While it is easier to accumulate assets if you earn as much money each month, to increase your net worth, you need to spend less than you earn. In the end, it is spending habits that make a professional athlete paid 20 million GBP a year can quickly go bankrupt, while a bus driver can retire a multimillionaire.
To escape the lure of spending, you need to understand that income is not long-term wealth. It is obviously a component of wealth, but the definition of wealth itself can vary. Many of us see wealth as total net worth at a given point in time, and it is also seen as the part of your balance sheet that is considered equity. That is, your assets minus your liabilities.
Excess funds to invest
You will understand that the only way to take advantage of investment opportunities is to have enough money to invest. In reality, if you have the soul of an investor, you will achieve exceptional net worth in a short period of time. The returns generated by your assets can change your life: for example, a 10% return on 10,000 GBP will only bring you 1,000 GBP before tax, but the same return on a portfolio of 1 million GBP is 100,000 GBP.
Becoming financially independent is a slow process that is learned over time. You take small steps every day, such as reducing your expenses, generating passive or active income, saving or saving on your electricity bills. Each time new opportunities arise, you can respond on a larger scale than your previous investments. You can even take risks such as living abroad, as long as you know there’s no shortage of money and you know how to earn more.
On his website, Roommate, Florent Fouque offers practical advice and tips to help you take charge of your financial future. To do this, the author of the training offers a personalized coaching service to teach you how to manage your investments, especially your roommate business.