Financial freedom is the ultimate goal most of us are working towards.
What are the most common mistakes holding us back?
Let’s explore how to avoid sabotaging ourselves in our financial freedom journey.
This post was written by a Financial Horse Contributor.
1. Not having a clear end goal
People tend to think about retirement and financial freedom in a vague way.
If there’s no concrete goal, and a general timeline, it’s very difficult to achieve it.
Small milestones along the way help keep you accountable and motivated.
Some questions to ask yourself:
- What kind of retirement lifestyle do I desire?
- What kind of career path do I foresee?
- What age is my ideal retirement age?
- What kind of plan do I have for my property (sell/downgrade possible)?
2. Letting your money just sit there
One of the biggest money mistakes that is sabotaging financial freedom is lett
Millionaires focus very much on growing their money 24/7.
Wealthy people are hyper focused on never letting their money sit idle.
Money management is purposeful.
This means creating multiple income streams, accumulating assets that generate passive income, and making sure thier money is growing.
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Practically speaking, this means that you should always be actively managing their money.
Being aware of your incomings + outgoings, so that you know your money is wisely accounted for.
Additionally, making sure government benefits like CPF/SRS is being maximized.
Check out our CPF/SRS guides:
- Maximizing CPF for your 20s and 30s
- SRS Guide – Why you should top up $1
- How to earn higher yield on CPF-OA
All of these steps are critical to advancing your financial freedom journey.
3. Ignoring small leaks in the ship
Ignoring small leaks can sink a big ship.
Growing your money has 2 fundamental pillars.
Income-maximizing, and also expense-reducing.
This doesn’t mean living hyper frugally or obsessing over cents – taking all enjoyment out of having money in the first place.
This actually means fousing on making sure you are managing your expenses smartly.
This includes:
- accurate budgeting
- tax optimization
- eliminating unnecessary fees
- appropriate wealth management advisors
4. Not protecting your downside
Again, there is 2 side of every coin.
With the upside, also comes the downside.
Protecting your downside minimizes the impact of a black swan event that could potentially wipe out all your hard work thus far.
Important protections to think about include:
- emergency fund
- health insurance
- property insurance
- kids insurances
5. Not enjoying the journey
Health is wealth.
You need to invest equally into your emotional and physical well-being in order to enjoy the fruits of your labour.
Additionally, no one can really accurately predict what’s going to happen in their lifetime.
In that case, it is vital to ensure you enjoy your journey on the way to financial freedom.
Live in the now, while planning for the future.
Budget for self-care, cut yourself some slack occasionally, and enjoy life.
Money is just a tool.
Hoarding it endlessly is unlikely to bring you contentment or happiness.
It should be used wisely, in accordance to your values, to achieve fulfillment.
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