10 Financial Freedom Lessons You Can Start Applying Today

Given the challenges in achieving financial freedom, here are 10 lessons from Street Smart Finance that can help keep you on track.  These are seminal recommendations taken from 10 different financial management thinkers.  They represent the best thoughts on the financial independence process and broaden the range of expert knowledge available to us. 

Let us know your thoughts in the Comment Section below.  Also, please “Like” and “Share” this information with others interested in achieving financial freedom.  FFN Editors

Achieve Financial Freedom: Awesome Lessons to Spruce up Your Finances
Posted by Shilpan for Street Smart Finance (www.streetsmartfinance.org)

“An investment in knowledge always pays the best interest”. — Ben Franklin

Achieving financial freedom is no small feat to undertake. Bogeyman is around the corner to snatch up your money before you even know. Even brightest among us face peril of losing wealth, if few major bumps come along the way.

How can you achieve financial freedom amid the ocean of financial information to explore? If you’ve felt hapless finding your safe harbor of financial freedom, you’re not alone!

Isn’t it a fabulous idea if you can get valuable advice to achieve financial freedom from 10 brilliant articles of financial wisdom on the blogoshpere? Of course, it is.

1. Saving money is the key to achieve financial freedom

The first step is to save aggressively. I’ve been saving 50%-75% of my after tax income every year for the past 13 years. I try not to be a miser and have done my best to try to spend money on things I enjoy e.g. vacations, food, a home, and tennis. Where I did “sacrifice” was not buying higher-end new cars (all but one were second-hand and under $20K) and going on less exotic vacations. Amanpulo I’m coming for you eventually!                     www.FinancialSamurai.com

2. Live Modestly

A lot of rich people constantly stress about their financial situation, all the while spending like there’s no tomorrow. If you’re making $500,000 this year and spend $400,000, you’d better hope that the economy doesn’t crash because once you’re out of a job, good luck funding that $400,00 a year hole in your pocket. By living modestly, you can relieve your stress and sleep well at night. Ostentatious living creates stress over your bills. – www.ModestMoney.com

3. Become a Renaissance man

What does becoming a Renaissance man mean? Think of a man like Leonardo da Vinci. Not only is the man famous for his inventions and scientific studies, but he is also one of the most famous painters of his time. His talents and interests were broad and deep, and there was no shortage of things to work on and explore. – www.InvestItWisely.com

4. You can’t go wrong with an Index fund

A portfolio of 100% stocks, which is what VTSAX(Vanguard Total Stock Market Index Fund) gives you, in study after study provides the greatest return over time. The only downside, and I mean only, is that the ride will be very rough at times. Admittedly, it’s a big one. If you are not tough enough to stay the course, if you get scared and bail when the storms are raging you are going to drown. But that’s a failure in you, not a downside of this asset class. – www.jlcollinsnh.com

5. You are responsible for your financial destiny; choose well

It is widely believed that small changes, practiced regularly, lead to out-sized results. Many great accomplishments began with tiny actions, implemented again and again. There’s research supporting the financial and personal benefits of quite a few of these habits. – www.barbarafriedbergpersonalfinance.com

6. Ordinary people can do great things too

I used to think that only geniuses and superheroes could achieve fantastic things in life. Or, at the very least, I felt that to have any success you had to be a totally go-getting, risk-taking, all out entrepreneurial maverick. At heart, I’m a cautious, down-to-earth kinda guy. My personal experiences, though, have shown me the potential that comes when you take positive action – even if it is only one step in the right direction. Extraordinary things are happening around us every day … all achieved by ordinary folk like you and me. — www.Vividways.com

7. Learn to invest in dividend growth stocks

The goal of Dividend Growth investing once retired is to maintain and grow your income from the dividends your portfolio produces. You maintain steady uninterrupted monthly retirement income as long as collectively your stocks will continue to produce 4% or more income annually and the dividend is not cut. – www.SeekingAplha.com

8. Think like a hamster, live like a hamster

Think less about money, more about time. Stop thinking of physical possessions in terms of money and start thinking of them in terms of time. Mentally convert money into minutes and you’ll achieve financial freedom faster. – www.FreeMoneyFinance.com

9. Save as if you were a 60 years old

Three things saved us: 1. Our unwavering 50% savings rate. 2. Avoiding debt. I’ve never even had a car payment. 3. Finally embracing the indexing lessons Jack Bogle perfected 40 years ago. – www.Mr.MoneyMustache.com

10. Learn from the Greatest Investor

Making money isn’t the backbone of our guiding purpose; making money is the by-product of our guiding purpose.” If you’re doing something you love, you’re more likely to put your all into it, and that generally equates to making money. – www.WarrenBuffett.com

Achieving financial freedom is all about developing mind-set to develop laser sharp focus on every aspect of your financial health. If you follow these articles of financial brilliance, you will be well on your way to the road of prosperity and happiness.

Disclaimer: The views expressed in the above article are strictly those of the author.  They do not necessarily represent those of FFN.  Please use due diligence in applying any concepts, recommendations and/or in the purchase of products or services from the author). FFN Editors

How to Reduce Your Risk When Investing in the Financial Markets

When investing in the financial markets, managing risk is a critical factor.  How to accomplish this is a widely debated topic.  Our featured presentation from the Wealth Directions Channel (http://GetWealthDirection.com), offers an approach which uses stock options as a vehicle for risk reduction in investing.

Options use for the average investor gets mixed reviews.  Some swear by it, others feel it’s too complicated and therefore unacceptable for the average investor’s needs.  However, the presenter asserts that stock options need not be that difficult. He suggests a 3 step process to make options a viable tool in the financial freedom seekers arsenal.

Let us know your thoughts in the Comments section at the end of this page. Also, please “Like” and “Share” this information with others who are interested in achieving financial freedom.  FFN Editors

(Disclaimer: The views expressed in the above video are strictly those of the presenter.  They do not necessarily represent those of FFN.  Please use due diligence prior to applying any of the concepts, recommendations and/or in purchasing products or services from the presenter).  FFN Editors

Where Does the Stand Economy Today?

While the economy has improved considerably since the crisis years of 2007/2008, where exactly are we today?  That is the question that Annalynn Kurtz examines in her article for CNN Money.  Her assessment is revealing and thought-provoking.

Let us know your thoughts about this information in the Comment section at the end of this article.  Also, please “Like” and “Share” this with others who are interested in achieving financial freedom.   FFN Editors

“Recession ended 4 years ago: How far have we come?”

Annalyn Kurtz By Annalyn Kurtz, CNN Money, June 4, 2013: 9:24 AM ET 

It’s been four years since the Great Recession officially ended. Stocks have fully recovered, but the job market hasn’t. Neither have home prices — but then again, who wants to get back to that unhealthy boom?

Here are the cold, hard facts on where the economy stands, according to the most recent data:

The S&P 500 lost more than half its value between December 2007 and March 2009. Since then, stocks have not only recovered their recession losses, but have also stretched to new record highs.

The jobs recovery has not been as robust. Rather, it’s been a slow, long haul. As the chart above shows, the U.S. economy lost nearly 8.8 million jobs between January 2008 and February 2010, but has since gained back only about 6.2 million jobs.

Meanwhile, the population has grown, and some job seekers have given up. As of April, 58.6% of the adult U.S. population had a job. The rate has barely budged in the last three years, and the last time it was that low was in 1983.

The average American is not yet earning the same income they did back in late 2007. Americans earned an average $32,700 a year as of April, about $184 less than in December 2007, after adjusting for inflation.

Part of what got us into this mess was the housing bubble. Many Americans were in over their heads, and found they were saddled with underwater mortgages after the bust. Since late 2008, households have been deleveraging. Now, the average American is $46,000 in debt — the lowest level since 2006. About 71% of that debt is tied up in mortgages.

Part of this deleveraging process stems from foreclosures and defaults on loans. Housing debt is back to its lowest level since 2006, and credit card debt has been declining. Student debt is bucking this trend, rising recently.

The housing market started recovering last year but remains far below boom levels, when average home prices peaked at $254,000 in 2005. The Federal Reserve is hoping record low-interest rates will spur more home-buying and boost the broader recovery.

 Annalyn Kurtz is a reporter at CNNMoney, where she covers America’s jobs crisis, Federal Reserve policy and other economic news.

(Disclaimer: The views in the above article are strictly those of the author.  They do not necessarily represent those of FFN.  Please use due diligence prior to applying any of the concepts, recommendations and/or in purchasing any products or services offered by the author).  FFN Editors

Get Your Retirement Plan Back on Track

Does your goal of retiring seem farther away than ever.  Well, you aren’t alone. The reality for many is that normal retirement at age 65 is being postponed to some later date.  As a result of the financial crisis of 2007/2008 and the widespread lack of retirement preparation, many have to work longer to reach the  financial level necessary to retire. 

Putting a retirement plan into effect is a critical step in making retirement a reality.  Trent Hamm writing in The Simple Dollar outlines several  steps that can get your plan underway. And, perhaps close to where it should be if it has been side-tracked.

Let us know your thoughts about this information in the Comments section at the end of this page.  Also, please “Like” and “Share” this information with others you may be interested in achieving financial freedom. FFN Editors

How to Approach Retirement Catch-Up
By Trent Hamm for The Simple Dollar

December 10, 2013

It’s well established that if you start saving about 10 percent of your income for retirement starting at age 25, you’re going to be in excellent shape for retirement when you hit age 65. This fact should be emblazoned on every single college and trade school diploma issued in the United States today: start saving for retirement now, not later.

Unfortunately, that fact doesn’t represent reality. Quite a few of us didn’t save at all during our 20s, and some of us didn’t save during our 30s, either. All the time, I hear from readers in their late 30s or early 40s (or even later) who are just now realizing that they need to start saving for retirement or they’re going to work forever.

If this describes you, the obvious answer is to start saving immediately. Right now. If you’re reading this article and you’re a professional adult without any retirement plan in place, you need to start a retirement plan.

If your employer offers a 401(k) program with matching contributions, run (don’t walk) to the HR office and sign up for that plan. Contribute enough to get every dime of that matching money because it’s essentially free retirement savings for you. If your employer doesn’t offer matching in their 401(k) program, look into opening an individual retirement account. I recommend contributing 10 percent of your income to that IRA, for starters.

So, you’re saving. Now what? The first thing to think about is time. If you’re only contributing 10 percent of your income per year to a typical retirement fund, it’s going to take about 40 years of saving before you can safely retire. Like it or not, that’s the reality of it.

If you’re 30 when you start, that means you’re looking at retiring when you’re 70. If you’re 40 when you start, that means you’re looking at retiring when you’re 80.

Another problem is that simply doubling the contribution doesn’t mean that you can halve the time. You can’t expect to contribute 20 percent for 20 years and match what you would get out of 10 percent over 40 years. That would only work if you were getting no return on your money – in other words, if your retirement plan involves stuffing cash into a mattress.

Saving for retirement once you’re behind the curve looks quite scary. Thankfully, there are a few things you can do to help improve your situation.

1. Get a Social Security estimate. The average American earns 40 percent of his or her retirement income from Social Security benefits, so knowing what you have coming to you can go a long way toward soothing retirement fears. The Social Security Administration offers a calculator to help you figure out how much you’re going to receive in benefits. It’s a good idea to wait until you’re as old as possible to start collecting benefits so you can maximize the income.

2. Look for ways to boost your income. Many mid-career folks find opportunities for freelance work and side businesses that can supplement their current income. Instead of simply spending that money, however, channel all of it into retirement savings (or into a mix of retirement savings and debt repayment). If you’re unsure where to start, visit your local library for information on side businesses and freelance opportunities related to your career path.

3. Hike up your savings. If you wish to retire earlier than 40 years from now, you’re going to have to save more. That means stowing away a higher percentage of your income. A good quick rule to use is that for every 10 years you want to shave off your goal, you need to double how much you’re saving. If you want to make it in 30 years, shoot for 20 percent per year. Twenty years? You should be saving 40 percent of your income per year. You need that boost to make up for the time you lost.

4. Cut out unnecessary expenses. Finally – and this is the tough part – you may have to consider some cutbacks. If you’re living a lifestyle that makes saving for retirement inconceivable, then you’re simply living beyond your means. You can’t assume that your ship will come in someday and everything will be OK. Everyone has expenses that they can cut from their life.

The road to retirement is a challenging road – but it’s not an impossible one.

Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions

(Disclaimer:  The views expressed in the above article are strictly those of the author.  They do not necessarily represent those of FFN.  Please use due diligence prior to applying the concepts, recommendations and/or in purchasing any products or services offered by the author)  FFN Editors

Key Investment Steps to Take Before Making Any Investing Decisions

Whether you are an active or passive investor, here are a set of critical decision steps to take prior to putting your hard-earned cash into the financial markets.  Offered by the Sorted Financial Money Guide, these are fundamental considerations that should be clearly determined by any prudent investor. 

Let us know your thoughts about this information in the Comments section below.   FFN Editors

“Top tips for investing”

Source: SORTED…Your Independent Money Guide (www.sorted.org.nz)

Before you leap into any investment decision, there are some important rules you should follow:

Set your goals: Decide what it is that you are trying to achieve. Where do want to be at some point in the future? What is the final outcome that you want from your investments and what is your timeframe? Think about debt – is investing the right option for you right now? Would you be better off using your money to pay off high-interest debt (e.g. credit card, hire purchase), or to reduce your mortgage?

Know your risk profile: You need to know what type of investor you are – essentially, how much money are you willing to lose? How much volatility (ups and downs) can you tolerate? To work out your investor type, use our investment planner.

Know how you want to invest your money: What mix of investments suits your investor type? Bonds, shares, property, bank deposits? Will you invest directly yourself or use managed funds? Our investment planner can help here too.

Do your homework: Research, compare and contrast everything – or get someone to do that for you. Read the business sections of the newspaper, go online, talk to your adviser, bank manager, or accountant. We suggest you also read any documents, such as the investment statement and/or prospectus, relating to the investment you are considering.

Research different companies’ investment options: If you are going to invest directly in a company, find out which companies suit your type. Do they offer the kind of investments you are after? What are the rates of return for each investment? What is the level of risk associated with the return?

Research the companies themselves: What does the company do? What markets is the company in? Who is running the company? Have they ever been declared bankrupt? How is the company run? Does the board have independent directors? How has the company performed in recent years – is there a steady performance over time?

Get the right advice: Shop around for an Authorised Financial Adviser (AFA) who you have confidence in. Authorised Financial Advisers must tell you (in a written disclosure statement) how they are paid and the impact that can have on the advice they give you. Find out more about getting investment advice.

Spread your risk: As the saying goes, don’t put all your eggs in one basket. Spread your risk around different options and different companies. For example, if you are considering high-risk investments, you can balance your risk with other investments in lower risk areas, like bank deposits or cash and bonds.

(Disclaimer: The views expressed in the above article are strictly those of the author.  They do not necessarily represent those of FFN.  Please use due diligence prior to applying the concepts, recommendations and/or in purchasing any products or services from the author).  FFN Editors

Warren Buffett’s Advice for Living a Successful Life

As we enter the new year, here are some life planning ideas from one of the best known successful people of our times. While Warren Buffett is often quoted regarding his investment philosophies and approaches, he often offers very sound ideas about living a well-rounded life.

In our  featured video clip from the “Warren Buffett Blog Channel”,  Mr. Buffett offers some important advice on where one can invest their time and energy to be a success in life.

Let us know your thoughts about this information in the Comments section below. And, please “Like” and “Share” this information with others who may be interested. FFN Editors

(Disclaimer: The views expressed in this video are strictly those of the presenter.  They do not necessarily represent those of FFN.  Please use due diligence in prior to applying any concepts, recommendations and/or in purchasing products or services from the presenter).  FFN Editors

How to Control Debt

A key component in achieving financial freedom is reducing and controlling debt.  Some financial freedom seekers have been able to shrink debt to an absolute minimum…even to zero.  Most of us, however, will have debt in our lives.  Managing that debt becomes critical in our ability to realize financial independence. 

Our featured article by the GreenPath organization addresses this issue.  GreenPath Debt Solutions, a nationwide, non-profit credit counseling and education organization, has come up with a list of ways to work your way out of debt in the New Year.

Let us know your thoughts about this article. Also, please “Like” and “Share” this information with others who may be interested.  FFN Editors

Quick Tips On Getting Debt Under Control In 2014

SOURCE: GreenPath Debt Solutions. (GreenPath Debt Solutions shares ways to tame credit card bills and other debts).

FARMINGTON HILLS, Mich., Dec. 18, 2013 /PRNewswire-USNewswire/ —

The New Year is only a few weeks away, and after the holiday gifts and decorations are packed away, mailboxes will soon be packed with credit card bills.

“In early January, we really see a surge in calls from people worried about their holiday bills,” said David Flores, GreenPath personal finance counselor. “Once the excitement of the holidays has passed, they realize they need to get serious about paying off their debt in the New Year.”

Plan Your Finances – This is an important first step to take in the New Year. An active financial plan is a tool that helps reduce spending and increase savings.

“You shouldn’t simply be content with having money left over in your checking account, at the end of each month,” said Flores. Developing a plan will allow more financial freedom and enable you to get through financial emergencies.

Create a Budget – A budget forces you to get your spending under control, and to “live below your means,” which is exactly what you’ll need to do to start eliminating your debt. Making little adjustments to your lifestyle can add up to big savings. “Be sure to give yourself a bit of breathing room in your budget for unexpected expenses,” said Flores.

Prioritize Your Debts – “Debts that take first priority are the ones directly related to your ability to survive, such as mortgages or auto loans,” said Flores. “If you don’t pay these loans, you can face foreclosure or repossession.” Flores recommends prioritizing payments into three categories: high priority (housing, child support, utilities, car loans); medium priority (personal secured loans, student loans, home improvement loans); and low priority (loans for household goods, credit cards, doctor’s bills).

Estimate Available Income – Income can be a weekly paycheck, pensions, public assistance and investments. After you subtract taxes and other deductions from your total income, you will have your available income that you can work with each month.

Check Your Spending – Identify your past spending patterns by reviewing cancelled checks, receipts, and charge statements, for the past two to three months. Place expenses in “fixed” or “flexible” categories. Fixed expenses occur at specific times and rarely change (car note or mortgage). Flexible expenses fluctuate from month to month, and may possibly be altered to balance the plan (credit card bills, electric bill).

Use Cash for New Purchases – Unless you pay off the entire balance every month, you are probably paying interest on new purchases from the date of the purchase. If you stop using your credit cards all together, you will be able to reduce your debt more quickly. Because of compounded daily interest, it is far better to use cash for the things you need and adjust your budget to accommodate those expenses, rather than to use credit cards and then struggle to send large payments.

Review Your Plan – You should review your plan about every two to three months. Do not be surprised if, in the beginning, actual expenses are quite different from what you initially listed. Your plan will become more realistic as you continue the process.

Planning ahead early in the New Year can set you on a path to being debt-free in 2014.

Contact Information:

For more information on GreenPath, or to receive a free counseling session and budget plan, log on to http://www.greenpath.org or call (866) 648-8122.

Keep up with GreenPath Debt Solutions on social media at http://www.facebook.com/greenpathdebt and http://www.twitter.com/greenpathdebt.

Resources Information:

GreenPath Debt Solutions is a nationwide, non-profit financial organization that assists consumers with credit card debt, housing debt and bankruptcy concerns. Our customized services and attainable solutions have been helping people achieve their financial goals since 1961. Headquartered in Farmington Hills, Michigan, GreenPath operates 50 full-time branch offices in 11 states.

They also deliver licensed services throughout the United States over the Internet and telephone. GreenPath is a member of the National Foundation for Credit Counseling (NFCC). Our professional counselors are certified by the NFCC, and we are accredited by the Council on Accreditation (COA). For more information, visit us at http://www.greenpath.org.

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(Disclaimer:  The views in the above article are strictly those of the author.  They do not necessarily represent those of FFN.  Please us due diligence in applying any of the concepts, recommendations and/or in the purchase of products or services offered by the author).  FNN Editors