Becoming financially free and retiring at 40 is a dream of millions of people all around the world. And why not? By retiring at 40, you will have ample amount of time for yourself, your family, and your life goals. You will have enough freedom to explore different countries, meet new people, experience different cultures, and enjoy things you’re deeply passionate about. This totally seems like a dream for many of us.
But, what if I say this dream is achievable? What if told you there is a magic wand that can make your wishes come true? What if there’s actually a way out of the 9-to-5 grind and retire early? Yes, it is possible. But, to reach that stage of financial freedom, you have to understand how this process works and how it will ultimately lead you down the right path.
What does it mean to be financially free?
Being financially free means you have sufficient financial resources to maintain your current lifestyle without having to depend on a regular job or any other type of work.
In fact, it’s not about earning more money or enjoying elite status, but rather, being able to spend more time on things that fuel your soul and help you live life on your own terms.
Achieving financial freedom is the key to retire early.
Here’s a 6-step process to achieve financial freedom and retire at 40
1) First Know Yourself
It will become nearly impossible for you to be financially free if you really don’t know yourself and your aspirations. Knowing your values, motivation, inspiration, or passion is must for you to attract limitless abundance and success in your life. It’s not an overnight thing. It is a life-long process.
Many celebrities who are successful today, like Shah Rukh Khan, Priyanka Chopra, Leonardo DiCaprio, Tom Cruise, Tom Hanks, Angelina Jolie, Will Smith, and more, they were all once unaware of what they’re capable of, but they explored themselves, their strengths and eventually succeeded in making a long-lasting impression in everyone’s life.
Not only celebrities, but business tycoons like Ratan Tata, Steve Jobs, Warren Buffet, Jeff Bezos, and many more have also worked on themselves first before plunging into the business world. So, knowing what empowers us, what challenges us, and what fuels our soul is crucial for attracting financial wealth, freedom, and happiness in our lives.
2) Invest For The Future
If you’re in your 20s, then you should understand that taking rash or impulsive decisions won’t take you any far, but your patience and resilience will. So, instead of using your time on meaningless pursuits, focus on learning the art of investing. Read as many books as possible to gain financial knowledge, talk to people who know the secret to financial wealth, and apply the same into your life. On the other hand, If you’re in your 30s then you better understand that half of your life is already passed, and massive investing in the only way to get closer to your goal as fast as possible.
Reaching to that financial freedom where most of the famous celebrities, politicians, businessman are right now, is not an easy task, as it takes decades to reach to that level. But, if you have a fire within you, and someone inside you knows that you can reach the stars, then everything is possible.
That’s a long shot. Indeed. But, while working towards achieving your goal, having an investors mindset is a plus.
Where can you invest?
1) Low-Risk Investments: If you’re not fond of taking risks in your life, then this investment is best for you. You can invest in Fixed Deposits, PPF, Sukanya Samriddhi Yojana, Recurring Deposits, Post Office Term Deposit and more.
2) Medium-Risk Investments: This investment includes a small amount of risk but offers a higher return than low-risk investments. It includes, Government Bonds, Corporate Bonds, Debt Funds and more.
3) High-Risk Investments: This investment option has a higher risk in comparison to lower and medium-level investments. Only those people can invest in this option who are willing to take higher level of risk. Because, the higher risk investment is market-linked and comes with a lot of volatility and uncertainty. This investment includes Mutual Funds, Stocks and Unit Linked Insurance Plans (ULIP’s).
By consistently investing money in investment options, you will open the door to your financial success and help you generate regular income payments (interest or dividends).
3) Invest In Yourself
In order to reach a greater level of success, you have to invest in yourself “every day.” If I say every day, then yes, “every day,” because real magic doesn’t happen overnight; it takes lifelong commitment and consistency to make it happen.
For example, if you want to become a life coach, then you must have the skills and mindset like a life coach. You can take the example of Jim Rohn, Tony Robbins, Les Brown, Nick Vujicic, Brian Tracy, and more. Ask yourself: Can you think or act like them? Can you feel the vibe of changing billions of people’s lives? Are you that capable? Can you do it throughout your life?
First, try to analyze how your inner self works, what inspires you, and then take consistent action to turn your aspirations into reality. Read books, go to seminars, attend workshops, leave home, challenge yourself to live on your own, and do everything to upgrade yourself so you can reach where your soul and dream align.
4) Increase Your Current and Additional Sources of Income
Reaching financial freedom isn’t an easy ride. You have to watch your spending, pay debts on time, and ensure that you’re advancing in your career, not only in terms of income but also in terms of growth. If you’re working in some XYZ organization, then make sure your income is doubling or tripling every year. Meanwhile, never lose focus on generating side incomes. As these extra sources of income help a lot during tough times and help you get closer to your financial goals and dream life.
When you have more money, you can invest it, save it, and can opt a self-development course, or can reach to your goal while working side by side. It probably seems impossible, because after spending 9 to 10 hours in a job, it becomes intricate to put our energy on other things. But, that’s how the elite corporations have designed the pattern, and it’s your 100% responsibility to break free from it with relentless conviction.
There are numerous ways to generate side income. For example: blogging, tutoring, dog sitting, selling photography, virtual assistance, becoming a YouTuber, affiliate marketing, freelancing, and beyond that. So, there’s always a way to generate more income, provided that you’re loyal to your financial goals and dream life.
5) Create a Well-Defined Budget
Jim Rohn once said, poor people usually spend their money and invest what’s left. That’s their philosophy. Whereas, the rich people philosophy is completely opposite. The rich people invest their money first and spend what’s left on their entertainment. So, with this, we can understand the significance of investing first, then spending.
The same philosophy can be applied while creating a budget. You can manage your finances on a weekly and monthly basis by reducing unnecessary expenses. This will encourage you to invest more and save more, which will help you get closer to your FIRE (Financial Independence, Retire Early) in no time.
6) Raise Your Standard
The only thing that will change your life, change your money, change your business, and change your relationships is raising your standards to a higher level. It may sound weird, stupid, and basic at first. But it’s the only truth. You must raise your standards to live a completely different life than your current one. Raising your standards will help you get closer to your financial freedom and help you retire in your 40s with enough cash in your bank account.