It is a common belief that when you become rich, all financial troubles and woes are a thing of the past. The reality is that many people become rich but stay in debt. A person living on $1,000 could potentially be more financially free than a person earnings millions but is in debt. This all comes to being “worry free” in your finances. This article gives you 8 ways to achieve financial freedom.
1. Don’t spend outside of your means. Do not be enticed by credit and financing offers tempting you to buy things you don’t need with money you don’t have. This is a fast way to fall into debt.
2. Clear all debt. If you have debt, set up a plan and work towards clearing all of it right away. The second you are debt free many of your financial problems melt away. You may research about debt consolidation without owning a home or debt settlement vs debt consolidation and check those that may help you.
3. Save every single month. Savings is not just “a nice idea.” It is, and should always be, a priority.
4. Invest your earnings. Rather than just stashing money under the mattress or in a savings account earning less than 2% interest, begin using your hard earned cash for investments with larger returns.
5. Set a monthly budget. Set a budget that allows for the necessities and a small amount for fun so you aren’t miserable with it.
6. Make your money work for you. Find a professional who can help you get the highest return on your money, so it works for you for a change.
7. Save for the future. Get an IRA or other accounts to set yourself up for retirement.
8. Have an emergency fund. This way, you won’t have to worry about going into debt if an emergency comes up.
It is very important for everyone to have renters insurance, even if you own your own home. There are masses of valuables in your home and most people don’t even know it. Just do try an experiment right now. List the top 10 most valuable items in your home and add up it’s estimated value. You’ll be shocked how much of value you really have.
You may own your own house and have homeowners insurance. But that type of insurance only covers the actual structure of your building. It does not usually cover the contents of your home. Policies for those who own are sometimes called home contents insurance but renters insurance would suffice.
When you start shopping, make sure that you have all your stuff in order. That means already have a list of all your valuables in hand with the total value added up before you start shopping. Once you find a policy that you want, make sure you document everything you own.
That means take digital photos of everything you wanted covered. This includes your television, audio systems, computers and jewelry. Don’t forget about your antiques and art as well. Make sure you get the latter appraised and document it’s worth by a third party. Also, take video as well in case you miss something on the still camera.
Then upload them all onto the internet somewhere. Do a private album on Facebook or put it all on a Flickr account. Whatever it is, make sure you have it somewhere that is not a hardcopy inside your own. If a fire or another disaster should break out, you don’t want it to go down in flames.
If you go online, you can get a bunch of different quotes from many companies. They will contact you once you request a quote. Some are as low as $10 a month. It can go higher depending on coverage amount and deductibles. Remember, you have tons of valuables in your house and renters insurance will be one of the best investment decisions you ever make.
There is some talk out there among economists, experts and policy watchers of letting the housing market crash. They say that would stabilize the real estate market and bring prices to equilibrium. In pure economic terms, this would make complete sense.
Right now the prices in the housing market is being propped up by the government. Right now there are programs that are meant to help homeowners keep their homes and not go into foreclosure, like the mortgage modification program, tax credits, low interes rates and government backed loans. These programs are also keeping housing prices artificially high.
There is a good reason for it in the short term. There are millions of homeowners who are on the brink of losing their homes to foreclosure. On top of that, many millions more who are able to pay their mortgage payments are stuck with a house that is worth less than the mortgage that they owe on it.
If the government lets the market crash, prices will plummet until the normal economic forces of supply and demand bring buyers back into the market. This would make it ripe for investors to come back and start buying investment properties again. Eventually this would lead to prices going back up.
The programs intended to prop up the housing market was a gamble on the economy coming back into recovery by now. The idea was that the economy would come back up enough to make the artificially high prices sustainable. That clearly has not happened.
My guess is that the government will not be able to prop up prices for long. Even if they try, they will fail because it’s too big of a market and the government doesn’t have enough cash to do that without sending the country into a much deeper deficit.
The best investment strategy to play this is to get back into real estate investment trusts. These funds will rise again when prices start falling and the market stabilizes. It won’t be good short term, but as the market recovers, the funds that got in at the bottom will rise in value over time.