My vision for "Achieving Financial Freedom"

Three main points that are necessary to achieve financial freedom

1. We need to increase our income

In this way, losing a source of income does not mean disaster, which is what happens if we have only one source of income and, of course, increasing the income helps us with the following two points, precisely point number two.

2. Spending less than we earn

This is the most obvious thing in the world but many people spend the same as they earn or even more and then, no matter how much your income increases, if your expenses continue to be the same as your income, your finances are going to be stagnant on the brink of catastrophe as soon as you lose a fortnight, worse still if you spend more than you earn means you are borrowing, then you are paying interest, then you are in a never ending cycle in which your finances are getting worse and worse.

3. You should invest and not just save

In point 1 we increase our income and in point 2 we realize that we should spend less than we earn, point 3 becomes much easier to realize and we can be investing more and more, but investing, just saving means that all the time you are losing purchasing power because of inflation, That inflation that makes things more and more expensive, on the contrary if you are investing, not only your money can grow faster than inflation, but you are actually putting your money to work for you and most importantly between time you are investing, the magic of compound interest will make your investment grow faster.

The main thing that will make these three points more efficient and that without it these three points alone are not going to give you financial freedom, is financial discipline and that is that everybody wants the quick way to make millions and millions of pesos, but few people really have that financial discipline to build a plan that practically assures them that they are going to make millions, not to see if this works, to see if this happens, to see if I win the lottery, to see if this action works for you within the next few years.

No, to have a plan that assures you yes or yes you are going to have financial freedom and I don't know about you but that word "discipline" is a little ugly to me, I could define this financial discipline more than anything else in being constant, being patient, being consistent and being patient or encompassed, being financially disciplined. Now, along with the three points above and of course several others, it will ensure our financial freedom, so let's write a little more about how this financial discipline will ensure that freedom.

#1 Be Constant.

Trying to generate new sources of constant income, in which every month we should spend less than we earn, but even this point is a little more elaborated is in the investments we make, constant not only in the sense of doing it every month or every two weeks, however we accommodate ourselves, but in doing it independently of the movements we see out there in the market, because we know that we already have a plan that we should constantly follow, again very independently of the movements we see day after day.

This plan is about defining, based on your age, your responsibilities, how much curl you can bear and some other things, what percentage you should invest in what assets, for example: let's say that after making evaluations of you as an investor, you have defined that you should invest 25% of your portfolio in real estate, then constantly, month after month is that 25% you should invest in real estate, but the price of the real estate trust that you buy every month has just risen and you feel that the pressure is very high, that a part of your brain tells you that maybe you should wait until it goes down before buying it, you already know that you should be constant and invest.

#2 Being Patient

Patients in the sense that not so easily we will be able to double our income of course not from one month to another, sometimes even from one year to another, patients in the sense that not from one month to another we will be able to reduce expenses or increase income for every time we spend much less than we earn and also patients in the sense that our investments take time to grow, But they can assure us that they will raise millions in exchange for the impatience in which we want to find the investment that will make us millionaires in a few months, that more than investments, they sound like patient bets to let the compound interest work its magic. Many times when we realize that the return on our investments in a year was 10%, 12%, 8%, we could fall into impatience and say that it is not going to be millionaires and that it is going to take us a long time.

We have to remember that the way we decide what to invest in, is not completely based on the returns in fact it is more based on your profile on the risks you can bear, because each person can bear different risks, the most common example is to compare two people by age, a twenty year old person can bear much more risk in their investments, that a person of 60 but also as we strengthen our finances we could gradually be taking greater risks regardless of age, but this is exactly how we must define what risks to take, for our age, our responsibilities, our fears the strength of our finances and not the promised returns of an investment, with patience then we will not be able to account for two things:

Number one, it is false that 8%, 10% per year can not make us millions, slowly but surely, for example 2 thousand pesos a month invested constantly with patience for 20 years, taking that example of 8% per year will bring you just over 1. 2 million pesos, the best thing is that the growth of your investment is increasingly rapid and as it was an investment whose risk could bear, every day you can sleep without any problem and every month there is the investment constantly and patiently, because without any problem every month you made that investment and if you together millions, where patience is so important is just that the first years we see here in this green graph.

The growth seems to be very very small compared to what we are disbursing, which in this graph is in red, but it is not as this green line of growth is separating faster and faster from the disbursements that is why patience is so important, Compare this scenario where you took the risks you could take with a second point, where you had no patience and this impatience led you to take risks that were greater than you could bear because of your age, your fears, your responsibilities, the strength of your finances, just because you were promised 20% or 100% or 1000% returns in one year.

Of course, we must know that the higher the return, the greater the risk we are taking, and of course, past returns do not guarantee future returns. When you were exposed to additional risks in this second scenario, you were worried about your investment, suddenly you saw it fall, suddenly you saw it rise, But you were awake at night and then suddenly you didn't want to invest anymore, because it means too much stress for you, you stop investing at the end of the day and you even lose money, so you don't collect millions regardless of what returns you expected because you couldn't bear those risks, because that made you not constant.

That is why this financial discipline is the most important thing that you can develop so that you can really make sure at some point in your life that you have financial freedom, it is a mixture between patience and constancy, that you can apply to the three points that I mentioned at the beginning of generating new sources of income, of spending less than you earn, of investing, they are going to make that at some point in the future maybe in five, in ten, in twenty or in forty years, you will definitely make sure that you have financial freedom.

I hope that this article has been useful to you, that perhaps it has helped you to identify some things that are important, but that you need patience, constancy, in other words, financial discipline, because without them you could easily fall into some mistakes that impede the progress of your finances and eventually cut your way to financial freedom.