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7 Ways to Set Yourself Up for Financial Security

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Key Points

  • Many of us dream of achieving financial security for ourselves and our family. However, most of us also realize how hard it actually is.
  • That is why most people get discouraged and simply stop their pursuit of financial security and independence ultimately.
  • Money is nothing but a tool that enables us to acquire and do things. But it is a tool with no manual and it causes a lot of people to struggle to properly use it.
  • Visit The Financial Today’s homepage for more stories.

Many of us dream of achieving financial security for ourselves and our family. However, most of us also realize how hard it actually is.

That is why most people get discouraged and simply stop their pursuit of financial security and independence ultimately.

Here are seven ways that will help you increase your chances in achieving financial security that you and your family truly deserve:

Nail money 101.

Every person who ever succeeded financially understood the basics of money before deepening their understanding of the subject. 

Money is nothing but a tool that enables us to acquire and do things. But it is a tool with no manual and it causes a lot of people to struggle to properly use it.

If you want to get a hold of your finances and achieve financial security ultimately, start learning the basics of money—how to earn, manage, keep, and grow it.

First things first.

Many people, with their eagerness to earn and get rich as quickly as possible, dive into the world of investing without doing the most important thing first—securing the source of your income.

It could be you as a breadwinner or your business. Whatever or whoever the source of one’s income is, as long as people are relying on it to live and survive, you have to insure it.

It is one of the most difficult subjects in personal finance to discuss because it deals with the sad realities of life which involve death, accidents, sickness, and loss of income in general.

However, without taking care of this crucial part of your finances first, the financial house that you are trying to build would be at risk should the unexpected happens and you are not prepared for it.

Deepen your knowledge about income.

Most people complain about their lack of income. And most of the time, when you check under their hoods, you’ll discover that they only rely on one income stream.

According to a book that studied and surveyed self-made millionaires, the magic number when it comes to the income streams of these wealthy people is three.

It means that the average self-made millionaire relies on three sources of income. 

By deepening your knowledge about the different types of income that you can build, whether it is active or passive, you’ll develop ideas on how you can build multiple streams of livelihood that you can manage depending on your lifestyle and the time you can spend to actively or passively manage them.

The point is, when one income stream isn’t enough, learn how to build more streams that you and your family can rely on.

Understand debt.

Debt is a double-edged sword that can either help build or destroy your financial future. Although this is an easy subject to understand, many people still find it hard to recognize a bad debt from a good one.

According to HowStuffWorks, good debt is an investment that will grow in value or generate long-term income. Bad debt is the exact opposite of this definition. A good example is taking on debt to finance a non-essential purchase like a brand new smartphone so you can take better selfies or a grand vacation when you can go on a simple but cost-efficient one.

By understanding how debt works, you’ll be able to better utilize debt to finance an investment or a purchase that will generate value or income over time.

Remove emotions out of your finances.

A good sign someone’s under the influence of emotions when discussing or managing money is when they are displaying signs of fear or greed.

When someone’s fearful about their financial future, one tends to make defensive decisions. The opposite can be observed when someone is greedy that tends to inspire them to make offensive financial moves.

Being neutral, on the other hand, gives you the ability to focus and see what truly matters when making a financial decision. This will allow you to develop practical solutions to any financial problems you might be facing right now.

Work with a professional.

Even the best of the best in money work with a professional in money management. They recognize that if they want to set themselves up for financial security, they need every help and opinion they can get from experts who manage money on a regular basis.

There are professionals who work for free since they earn a commission from financial products that you will buy from them based on their recommendations and there are experts who work for a fee.

Depending on your preference, the most important factor when choosing a professional to work with is trust. You need to work with a money management expert who walks the talk and treats his client with extreme integrity and respect.

Gaining the expertise of these professionals will enable you to see your current financial standing as well as your future financial plans in a different light.

Setting yourself up for financial security means being proactive. The suggested ways above will help you increase your chances of actually achieving the financial security you and your family truly deserve.

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