Every man who has achieved financial independence has his own unique way. But if you look carefully at how this state of freedom was achieved, you can find a lot of similar models, which for some reason are not told about in school, but thanks to which you can escape from the rat race once and for all.

What’s stopping us from developing

I can’t boast that I’m financially independent. Secured? Yes! Independent? No. But I am on my way, and I can say with certainty that I have chosen the right direction. Financial independence for me is when you have multiple sources of income, when you do not have to work to meet all your needs.

Attitudes towards money, wealth and rich people. Many people believe that a lot of money is associated with deception, that it is impossible to earn a lot of money by honest work, and that rich people are miserable and crooks. And what if you look at the money in terms of opportunities?

Doesn’t money open new doors for us? I don’t mean corruption schemes now. Think about the fact that having wealth, you can share it and do good, your children will be able to study in the best educational institutions in any part of the world, you can help your parents to meet the old age as they deserve – to pay for their travel, treatment in sanatoriums.

Here’s how to think about money so that you have a boundless desire to earn more money, invest in assets (e.g. stocks, bonds or ETFs) so that they work for you. Here, the key role is not how much you earn, but how much you can afford to postpone and invest from the money you earn every month, regularly and for a long time.

Where do we start?

You can earn a lot, but you can’t become financially independent if you spend everything you earn. With this approach, you should lose your asset – a high salary, and you start to go down the financial ladder. For example, you earn 100 t.r. monthly, you have the opportunity to pay all the bills, you increase your comfort level by buying more expensive and high-quality things.

You get used to this amount and over time it does not seem acceptable to you for a normal life. And next to you lives a person who earns half as much, but he has an individual investment account. Every month he buys shares and bonds on the stock market by 15 t.p. This is the person who started on the way to financial freedom. Now time works for him.

To say that the former has less chance of becoming a rich man is wrong. With his approach he has no chance at all, he lives happily and comfortably now, perhaps everything will be the same in the future, money will not only be enough for basic needs.

But I decided not to think in such predictive categories, I must be sure of tomorrow. And this confidence is supported by nothing but the capital growing behind your back. Of course, you have to learn how to invest in order to make as few mistakes as possible, but first you need to understand your finances.

All financial advisors always start with the topic of income and expense accounting when teaching personal finance. This topic is really important, but I’m not going to write down and analyze every ruble I spend, I think this event is fraught with bad consequences.

Personally, this activity depresses me, I become like a greedy and sparing bourgeois who, trying to save money, once again brings to his mind the limiting beliefs. But that doesn’t mean I’m infantile with my finances. I have my own point of view on this.

Assets and liabilities

How important are assets and liabilities in life. There are other such things, and they are present in almost every family – they are different kinds of liabilities, i.e. something that requires money from time to time. These are consumer loans.

Now it is very difficult to find a person who is not burdened with credit obligations. Such crazy lending to the population is nothing but another belief imposed by our environment.

The belief that there is only one life to live is not to refuse, to buy now, but to pay later, that it is normal, everyone lives like this and you have to. And many families, having only one asset at their disposal – their hired work – take enormous risks only because everyone does so.

Rich people always strive to ensure that all liabilities are secured by assets, while increasing assets. I don’t call on you to get rid of all liabilities, but I think it’s wise to reduce their number. You can also analyze what kind of liabilities you can convert into assets. For example, you have an empty garage that you can rent out.

The most fatal scheme that brings people to the bottom of poverty is consumer credit for liability. Let me explain what I mean. The loan itself is a liability because it takes away your money. You can also consider a private car as a liability, which makes your life more comfortable, but it also requires money for maintenance.

In addition, it is one of the most rapidly depreciating purchases. By kicking a car out of the showroom, you have already lost at least 15% of the money invested in it. And if we bought this liability through a loan, it’s just a killer combination.

If you have a sufficient salary to cover all your liabilities and still have free money to invest, that’s great. I’m just bringing this up to open the eyes of those who want to live the life they haven’t earned yet.

There are no magic pills for wealth, but there are two truly magic things behind it that can shorten the path to it – consumption and investment.