Financial Literacy 101

Marcus Writes By Marcus Writes, 14th Feb 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/6ecx2wa4/
Posted in Wikinut>Business>Investment

Financial Freedom is a sought-after form of existence with the growing financial illnesses and slavery of the modern. Join me as I liberate myself from financial slavery

Road to Financial Freedom

In today's financial landscape it is undeniable that countless people around the world suffer from financial distress due to high levels of debts, and mismanaged cash flows. News over the television or print media outline those countries with households suffering from a negative income and high unpaid debts. Many students from the west graduate with student loans waiting to be extinguish. Due to this growing financial problem and the need for financial freedom, financial literacy has emerged into a demand rather than a course for the few.

Financial literacy is commonly known as the knowledge and application of different approach to gain financial freedom. On the other hand, financial freedom is the state of financial stability and sustainability which comprises of meeting certain financial conditions.

The road to financial freedom is never easy but an attainable path of success. I have read various books and attended online seminars on financial management. These resources have outline common approach to gain financial freedom which I summarize as follows.

1. Debt 'Extinguishment'
The first step is to extinguish all debts as soon as possible. This can be done by diligently meeting principal repayment. Make a plan how your income would meet repayments and stick on it no matter what. It is only through religious payment of the amount due that debts could be eliminated. If various creditors exist consider debt consolidation with lesser interest.

2. Protect Yourself
Majority of the problems which cause a disruption of financial plan and accumulation of debt is the existence of unforeseen emergencies like medical illness, disability or loss of job. This can be avoided by setting up an emergency fund and through insuring yourself with health care and life policy.

3. Save
Saving is never easy especially for those who are used to spending too much with their lifestyle. One trick is applied is to automatically debit an amount from my salary. In this way, I only received net of savings. Common problem on saving exist when people set savings after expenses. This approach is very ineffective since human inclination to spend is highly probable than savings. Placing a portion of your income to another account, or a sealed envelope or a jar kept away from your hands would be helpful.

4. Invest
Investing means placing those savings into productive paper or non-paper assets. Those savings should work for themselves and earn passive income. With today's technology and spread of financial information, investing is no longer a rocket science for the rich and intelligent. There are online brokers with minimal fees which you can start to invest in stocks, mutual funds, and UITFs (offer by banks). You can also invest on real estate or even start your own business. The important thing to remember is that your savings should grow with minimal or no effort at all.

Discipline and patience are vital in adhering to the approach presented above. Without those, the application or execution would never be realized or will shatter midway. A strong willpower to uplift one's financial status will propel one's spirit in delaying gratification and stick on the financial plan.

Tags

Debt Crisis, Debt Free, Debt Management, Debt Problems, Debt Relief, Finance, Finances, Financial, Financial Freedom, Financial Management, Information, Investing, Investment Strategy, Personal Finance

Meet the author

author avatar Marcus Writes
I write to express and not to impress. Writing is my ultimate passion;the blood which runs through my veins. Visit me at www.brewingabetteryou.com

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Comments

author avatar SaigonDeManila
24th Feb 2015 (#)

Epic first post!!!! I felt like attending a seminar or crash course!,

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