We all want to earn more money with greater speed and less effort. We are eagerly looking for the shortest way to financial security, independence and freedom. But there’s always a starting point!

In one of my financial literacy and education sessions, a participant asked me to share some basics of financial management and financial decisions making.

“Hello Sir, you have really inspire us today. My question is journey to financial independence and freedom; what are some of the basics?” He asked

There are plenty of people willing to advise you on how to earn more money and achieve financial security, independence and freedom. Most of this “advice” focuses on exciting tactics to generate big returns with little risk and time invested.

Sadly, a lot of this advice is bad. It’s not based on sound financial principles. And it’s too often marketed with numbers that have been manipulated to mask fees and inflate returns. Fortunately, not all of the advice out there is bad. There are smart ways to reliably accrue wealth over the long-term. And if you’re smart, you’ll be in it for the long-term.

Here are some basics of sound financial principles that you can adopt to guide your financial journey:

Invest in yourself

“The best financial advice anybody should give you is to educate yourself financially, invest in yourself.”

The more value you add to the world, the more money you will make. And to add more value, you need to invest in yourself. Read and learn daily, develop new skills, build competence, focus on your physical and mental health, build your network, and so on. These investments will pay off tremendously.

Leverage compound interest

Einstein once called compound interest one of the world’s most important inventions.

Why? Because it’s super powerful. ¢1000 to ¢5000 invested in a low-cost index fund in your early 20s will be worth hundreds of thousands by the time you retire.

Automate and simplify

Most people want to minimize time spent on their finances to increase time spent elsewhere. Take the time to create a simple, automated investment strategy. For example, if you earn ¢1000 per month, you might allocate ¢100 to your your retirement plan (401(k)), ¢100 to your stock investments, ¢50 to fund your vacation, and the rest towards monthly expenditures. The important thing is to set up the infrastructure that is automatic and that works for you. That way, you know that you are hitting your goals and don’t have to think about it.

Create flexibility

Having a flexible lifestyle enables you to more easily thrive through the inevitable financial circumstances of life. Learn to live with less. Have multiple sources of income. Create a lifestyle where you can move anywhere on demand. With this flexibility, you can comfortably navigate your unique and evolving financial landscape with greater ease.

Relax

As my favorite quote says; “Don’t rush the process, trust the process.

No matter your level of wealth, financial stress will always be there. Whether your concern is about making rent or contributing your capital to the best charitable organizations, everyone wants to allocate their money effectively. So do your best to do that, but also relax. Enjoy life while you have the opportunity to do so.

The truth is that good personal finance advice is not exciting or sexy. But that’s okay. So invest the time in understanding and practicing the core set of simple, but sound financial principles. And then rest easy, and spend your time in the areas of life that excite you the most!

You don’t need to rush the financial freedom journey. One step at a time, multiple moves. 

Book Peter for Corporate Training, Public Speaking, Personal and Group Financial Planning and Coaching, Business Planning, Coaching and Development.

Email: peternyarko403@gmail.com
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