Want to achieve financial freedom by 40? Here’s how you can do that!

Dr. Deepti Dwivedi

At the age of 40, many people think that they’re too old to do anything new. They believe their lucrative years are behind them and that they have nothing more to look forward to but a slow descent into mediocrity and obsolescence. In the worst cases, the fear of ending up penniless can make someone lose perspective on what’s truly important in life – thus making them less happy than they could have been having they just worked hard. Fortunately for you, here’s how to change that. All it takes is a little self-improvement and the desire to do something with your life. So how does one achieve this? Well, let’s find out!

SET YOUR GOALS

The first thing that you need to do is set a goal for yourself. Why? Because it’s the only way to measure your success and progress, as well as to have something tangible to look forward to every day as you work towards achieving it. So figure out what it is that makes you truly happy, no matter how strange or unrealistic it may be. It may be starting your own blog or taking up an instrument. The main point is to find out what excites you the most and then do everything you can to turn that dream into a reality. Just remember that life can be tricky sometimes, but if there’s something that you really want, you must go out there and get it!

CUT DOWN ON YOUR EXPENSES

In general, cutting your expenses should be the first step in achieving financial freedom. It will allow you to save up for when you need it, like if things suddenly go south (job loss). Try to completely avoid frivolous spending. It will benefit you in the long run.

FIND A SIDE HUSTLE

Finding a side hustle is a great idea. While this may not make you rich overnight, it can result in some pretty impressive returns over time. Maybe you want to teach English online or blog about fashion? Or perhaps you want to start a business? It’s up to you!

START INVESTING EARLY

Once you’ve saved up some money, it’s about time to put investment into practice. Unfortunately, this is where most people mess up. They either invest their money too early or too late. The most lucrative way to do this is by starting early! Even if you don’t have much saved up yet, don’t fret! You can invest the money that you do have. There’s a ton of places to do this—stocks, bonds, real estate, etc. The earlier you start and the more diverse your investments are, the better it is.

LET YOUR MONEY GROW

Once you’ve invested your money, it’s time to let it grow. Luckily for us, you can do tons of things to increase your portfolio’s value, such as opening up multiple accounts. For example, let’s say you want to purchase stocks – see if your brokerage offers discounts for having multiple accounts (i.e., retirement account, business account, etc.). Also, another idea is to let your money sit in low-risk savings accounts that have high interest rates.

GET YOURSELF HEALTH AND LIFE INSURANCE

At this point, you should be relatively financially stable, and it’s time to think about yourself. If anything happens to you, how will your family cope? Will they have the money that they need to survive? If something unprecedented were to happen to you, would your loved ones be financially secure? If you answered no to any of these questions, it might be time to get yourself health and life insurance. There are a number of places where you can get these. Just make sure that whatever policy you choose is best for your situation because there’s nothing worse than having money locked up in something that you can’t use. Of course, you can always approach an advisor to find suitable plans for your needs.

START A BUSINESS

Once you’ve gotten yourself a decent-paying job and saved up some money, you can start a business. This way, if your current job goes under or they lay you off, at least you’ll have something to fall back on! But what sort of business should you start? That’s entirely up to you. Once again, there’s a ton of options to choose from. You could create a blog, sell clothes online, make widgets. Just make sure your business uses the skills you taught yourself with all those side-hustles and hobbies!

MAKE SURE YOU’RE FINANCIALLY READY FOR THE WORST

Remember that whole thing about having some money saved up for a rainy day? When job loss, car accidents, and illness strike, you don’t want to be left financially dry. So it’s always good to build an emergency fund. This way, it’s there for you in your time of need.

ELIMINATE PENDING LOANS

Finally, it’s time to get rid of those pending loans. Any loans that you have had outstanding for a year or longer need to go. They are doing nothing but draining your wallet. If your loans are backed by anything of value, like a house or car, sell them on the open market. Otherwise, it may be better to pay these loans off if you can’t afford to sell them.

There you have it, the steps to achieving financial freedom at 40! Like we said earlier, a lot of people tend to mess this up. They either don’t save enough money or invest their money early enough. So it’s essential to start right! Make sure you’re investing your money into something that will yield a profit, and make sure you do it early. Also, ensure you’re saving money as well. A lot of people forget about this step, and it jeopardizes the whole process. If you want to be successful, pay attention to these steps and don’t cut corners!