Success as a lifestyle: 7 steps to financial freedom – Part I
The quest for financial freedom has always been important but is more so nowadays. What are the right steps to financial independence? During the last decades, we have seen the world changing like never before, and the financial and corporate spheres have not been the exception.
At Mundo, we specialize in connecting people with the right services and tools to achieve their business goals and financial objectives.
That is, we connect with international business people, investors, nomad capitalists, perpetual travelers, and libertarians with the right provider and the most suitable options.
Based on our long history working with related services and expert providers, today we decided to pen this piece on 7 steps to success. We hope this will help you have a clearer view of the steps to financial freedom.
7 steps to financial independence
Step one: define your goals
Step one of the 7 steps to success is setting up your goals. It's important to understand that different goals will entail separate decisions. At some point along the way, you want to decide whether you want money for your children's education, your retirement, the journey of your dreams, or to live off rent in the future. Some may want to create enough wealth for their descendants or maybe just design a product that changes their industry.
Naturally, the tools recommended will change. If you're searching for an optimal retirement you may be looking for long-term, safe investments and probably relocating to a country with lower costs. Panama, for example, has been chosen as one of the best living destinations this year, and it's always among the highest positions.
If your retirement is close, you may be looking at real estate in Panama and a special program called Pensionado Visa. With this, you can retire in Panama accessing a number of benefits and all you have to do is prove that you have a lifetime pension.
Steps to success - Step 2: choosing your line of business or means to generate money
One thing is sure, you'll need a source of income which must generate genuine earnings. This field is as vast as it can get because it includes everything from a job position to a company, dividends, or rental income.
Naturally, building a system that gives you enough net passive income to pursue your goals is not an easy task. Living off rents is a great example but it takes a while to build a network that will provide the necessary income all by itself, especially after maintenance and management costs, taxes, and other expenses.
Perhaps the ideal approach is owning a company that creates income continuously while giving you a certain level of freedom. In general, people go for a combination of these alternatives that complement each other by adding what the other lacks.
Steps to success, Step 3: The art of budgeting or allocating your earnings into specific areas
A neat organization is the basis of these 7 steps to success and also it determines the steps to financial independence. Here is why: poor management of the income is equal to, and even worse, than no income at all. You can be the owner of the most powerful empire, but this can all go away in the blink of an eye due to mismanagement or lack of protection. This is why a trust is such a key structure in the steps to financial freedom.
Mundo recommends the following fields, however, the percentage and the reach will vary according to your income.
Ideally, 10% of the net income should go to savings and at least 15% should be reinvested in your plan. The more you invest in it, the faster it will grow. Nonetheless, this can’t be done at the expense of other fields, at least, not if you want to protect your steps to success.
Cover your costs
It's imperative to establish exactly the amount you need to cover your costs including services, utilities, rent, school, tuition, food, transportation, insurance, medical care, car maintenance, etcetera.
Vital for your 7 steps to success: savings
You want to have a security mattress for emergencies, so it is advisable to allocate a percentage to your savings. Where to keep them is a different story. You can have these in a local bank account or diversify by opening an account or accounts abroad. Luckily many jurisdictions will provide a safe banking environment where you can keep your savings.
Business project or professional development
Whatever your line of business or profession is, you want to reinvest to help it grow. If your main source of income is your profession, then capacitation and training are advisable. As the owner of a company, you should consider investing to make sure your product or service maintains or improves its quality.
The same goes for a real estate approach. If rental income is your main source of earnings, then expanding your property portfolio is a good idea. Thus, investing in refurbishing or enhancing your properties is a good bet and so is buying new assets that may add to the value of your portfolio.
Fun and entertainment
Vacations, leisure, hobbies, and similar activities are necessary to recharge your energy. With a well-rested mind, you'll have more innovative ideas and your steps to financial freedom depend on this. In order not to overdo it, it's better if you allocate a fixed budget for these activities whether monthly or annually.
Disclaimer: this article reflects a mere opinion as a guideline for steps to financial independence. However, this article is not based on hard research. Therefore, it should not be considered financial or wealth management advice. Before making any decisions regarding your finances, please consult with a certified professional or agent.
What are the seven steps to financial freedom?
We've described the three basic steps to success when it comes to business and finance, but this is only the beginning. In following articles we'll review the other four steps that will take us deeper into the matter. Tax residency, trustee services, second citizenship are key pieces of this puzzle that will be put together in time.
Mundo is an online publication dedicated to financial freedom, this is why we take great interest in these steps to financial independence.
This is an ample world filled with opportunities. Write to us and find out about the banking abroad options, real estate projects in Panama, residency in Panama and tax residency, and citizenship in Vanuatu and the Caribbean.
We'll be happy to walk you through the best options hand in hand with our partners, lawyers, agents, and realtors at our dedicated team. Write to us now and begin your journey.
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