Don’t we all want to know How to be financially independent in India?
Surely, we do.
Nothing can beat the feeling of an individual when he or she achieves financial freedom. In India, while most people struggle to get their dream job, there are multiple ways through which you can achieve the same.
This is the basic need of people and individuals need to earn their own money to maintain a basic lifestyle. This is why people give importance to education. You have to put in effort and dedicate yourself to get financial freedom.
Nothing can bring peace and happiness like financial freedom. With financial stability, you are able to afford things that make your close ones and you happy.
Once you have financial freedom, you can be at peace and even save for your future. In this blog, we are going to talk about how to be financially independent in India.
Different people have different financial goals and for accomplishing the same, you need a stable source of income.
Table of Contents
What is financial freedom?
Financial independence in Indiarefers to a phase where a person manages to generate passive income, which in turn is used for the daily costs of life. It should also be noted that a person does not need to work in order to earn money. Effortless automatic income or passive income is also a source of earning funds. This is the basic need of survival and might take time to achieve.
State of financial independence
- Assets: This includes the assets that one has gathered over time in form of investing, such as property, annuity, stocks, and more.
- Return on asset: The assets gathered generates regular returns, which can be in the form of cash or capital appreciation.
- Passive Income: This is yet another form of income. This includes periodic returns and is termed as passive income.
- Required costs: These expenses are generally met by consuming passive income.
- Reinvestment: This is also an important aspect of financial independence. It generally increases the size of the asset base and gives you more returns. The first step to gaining financial independence is accumulating assets.
Key to financial freedom
There are various steps to achieve financial freedom. In this write-up, we are going to talk about the key to the same and the steps to financial freedom.
The primary way to manage your finances is by setting goals. Whether you want a foreign trip or have future expectations regarding property and assets, you should set goals. There should be both long-term and short-term goals on your list.
Prepare a budget
You need to pre-plan all your expenditure and monetary income so that you can eradicate unwanted spending. This is the reason why you should regulate the money in your hand.
You should save at least 20% to 30% of your salary.
This way, you will have enough pool of money in the future. Savings will also save you during an emergency. For instance, during the pandemic, people with savings were able to sail through when they became jobless.
Avoiding unwanted expenses is also very important. This way, you can attend financial freedom by staying away from excessive shopping, indulging in unplanned expenses, etc.
How much money is required for attaining financial freedom in India?
This actually differs from one person to another and also depends on your long-term and short-term goals.
Financial freedom in India
The importance of financial freedom is evident from the fact that you can be at peace with yourself and you also have extra money to spend on necessities.
It gives you a confidence boost and you can undertake plans which were postponed earlier due to lack of funds. Financial freedom also means that you don’t have any considerable debts to pay.
Financial freedom also leads to better mental health. It helps in reducing depression and stress.
8 Killer ways on How to achieve financial freedom in India?
In order to achieve financial freedom in India, you need to be dedicated and punctual. You have to plan and execute at the right time.
1. Plan your career
One of the first things that you should do is plan your career. The right career decisions will give you financial stability over time. Take up courses and enhance your skills so that you can grab a job that can give you financial freedom.
Take tips from the pros so that you pick the right line where you are able to earn enough money to meet your short-term and long-term goals.
2. Analyze the situation
You must also analyze your current financial situation from time to time. You should track your daily expenses minutely.
You should also invest and keep your cash inflows and outflows in mind.
3. Prepare and analyze the goals
You should also analyze your goals and make sure that you know what kind of financial freedom is required to achieve the same. Goals differ from one person to another as mentioned earlier.
While some of your friends might want to buy a house next year, others may want to invest in new businesses. This is the reason why financial decisions shouldn’t be compared.
You should be very specific when it comes to your target and keep a track of your expenses to reach the same.
4. Track your expenses
As mentioned in the last point, you should track your expenses properly. Try to reduce unwanted expenses and monitor your transactions.
At the end of the month, sit with your cash inflows and outflows and check where you are going wrong. Cut down on places where you are overspending. Limit your expenses and you are good to go.
Always think of money as an investment. Once you’re stopping yourself from impulsive buying and putting the same amount for investment, it will become a habit.
5. Learn new skills
Try to invest in things that will help you generate income in the future. For instance, you can learn some new skills and abilities that will help you get a promotion. It will also boost your experience. Since it will add to CV, you can also start applying at other places.
6. Use discounts and offers
Try to make the most of coupons, rebates, offers, and other discounts. There are multiple online sites from where you can get these coupons. Save on your bills.
7. Reduce debt payment
Debt can substantially reduce your financial freedom and this is the reason why you should stay away from loans and debts as much as possible.
Pay on time so that you don’t have to pay a penalty.
8. Various sources of earning
Given the current situation, there should be more than a single source of income for everyone. You can have a side business, do freelancing, find a part-time income source, etc. There are various online platforms from where you can find such earning opportunities.
If you are a subject matter expert, you can sign up for assignments where you need to answer questions asked by students. You can sell products online as well.
There are multiple ways to generate income so that there are no harsh consequences when one of the sources falls apart. This is a great way to maintain your finance.
Financial independence is having enough money to afford the expenses and lead a comfortable life. Only strategic moves in an investment plan can help you reach financial independence.
You have to understand that financial freedom and financial independence are completely different.
If you achieve Financial independence, it surely will lead to stress-free retirement life as well.