You only need one powerful habit to become financially free … and that powerful habit is investing. BUT WAIT! Investing doesn’t start with stocks, bonds, and real estate — it begins with investing in yourself and changing your financial habits. 

Keep reading to find out what you can start investing in today to set in motion your journey to financial freedom. 

1. Invest Your Time Towards Making a Budget

The most important step in gaining financial independence is to create a budget. In the simplest terms, a budget is a spending plan based on how much you earn. In other words, it’s a plan to spend your money correctly.

This is the most important step because if you can spend less than you earn, your money will grow. When you can consistenctly spend less than you earn, there is nothing stopping you from becoming financially free. A budget is the key to spending less than you earn.

2. Cut Your Expenses

Before we continue discussing your investment strategy, it’s important we address expenses. If your expenses are so high that you are stuck living paycheck to paycheck, then it is necessary to go through your expenses and make some cuts.

Take a good hard look at your banking and credit card statements. Look for expenses you can live without. (Do you really need to subscribe to four different streaming services?) Eliminate the expenses that aren’t making your life better, and save your money!

3. Invest a Percentage of Your Income towards Financial Goals

Remember Tip #1? It was to invest in a budget so that you spend less than you earn. This is the most important step!

What’s next? Learn to pay yourself first. The next time you get a paycheck, the first thing you need to do is set aside 10%. This becomes your investment money, and you need to live on the remaining 90%. Can you live on 90% of your income. Try.

Remember, the bigger the percentage you save to invest, the faster you will achieve financial freedom. 

4. Invest 10% in Savings

Your 1st financial investment is to build your savings. Invest 10% of each paycheck into your savings account every month. Your goal is to save up for three months’ worth of expenses. You never know when something is going to happen. If you don’t have adequate savings, then you will likely go into debt trying to cover an unexpected expense. 

5. Invest 10% towards Your Debt

Your savings is built? Great. What do you do with your 10% investment fund now? How about pay off your debt? You will never be financially free if you are in debt. Make it a priority to pay more than the minimum payment each month. Invest 10% of your income + the minimum debt payments towards paying down your debt. This will have you paying down debt fast! But make sure you lower your interest rates first before paying down debt (see below).

6. Invest 10% in Growing Your Wealth

You made a plan to spend less than you earned. That allowed you to put money in the bank and become debt free. Now what? Keep investing. Your new job is to take 10% of every paycheck, and make that money grow. Essentially, you want to buy things that will make your money grow, such as investing in real estate, stocks, or a small business. Eventually your money will grow so much that your investments can support your lifestyle. You will be able to quit your job, and you will officially be financially free.

7. Invest in Your Financial Education

The more you understand money, the easier it is to grow your wealth. That’s why it’s important to invest in your financial education.

Don’t know much of anything about money? Read Rich Dad Poor Dad! by Robert T. Kiyosaki to learn real-life investing tips. Get it today. There is no reason to wait to read this enlightening book.

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7 Powerful Habits to Achieve Financial Freedom Story