8 Financial Freedom Tips by Tony Robbins and Why They Work
According to Achieve, just one in 10 Americans report that they are living according to their definition of financial freedom. This includes being debt-free, living comfortably (but not necessarily being rich), meeting all monthly financial obligations with some money left over, and never having to worry about money.
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With stubborn inflation, high prices and the cost of housing through the roof, it seems like achieving financial freedom is near impossible.
However, Tony Robbins says financial freedom is a possibility when you use his tips. Here’s what you should know.
What Is Financial Freedom?
Tony Robbins defines financial freedom as doing what you want — taking an amazing vacation or buying your dream house — without having to worry about your bank balance.
On the other hand, achieving “financial independence” means meeting your financial needs without having to rely on anyone else. You have a steady income and the ability to pay all your bills each month. Also, you have money left over to save and invest.
Gaining financial independence comes before achieving financial freedom.
8 Ways To Achieve Financial Freedom
Here are eight tips to achieve financial freedom, according to Tony Robbins.
Pay Off Your Debt
First and foremost, eliminating all your debt as soon as you can is crucial. Debt eats a hole in your wallet and makes it hard to invest your money. Credit card debt, in particular, can carry high interest and make it even more difficult to get out of debt — especially if you only make the minimum payment each month. The sooner you get out of debt, the sooner you can redirect more money towards your savings and investing.
Start Saving
If you haven’t already, be sure to allocate at least some of your take-home pay toward your savings each month. It’s best practice to have at least three to six months’ worth of expenses in an emergency savings account in the event of a job loss, emergency medical expense or an unexpected home or auto repair. If possible, having nine months or more of monthly expenses on hand in a risk-free, high-yield savings account is best.
Start Investing
Historically, investing has been one of the best ways to grow your money and build long-term wealth over time. Even starting small with minimal monthly contributions toward an investment account can help.
Be Sure To Leverage Compound Interest
The magic of compound interest allows for significant wealth accumulation. For example, if you receive a monthly interest in your high-yield savings account, that interest becomes part of the principal balance. Each month after that, you’ll be earning interest on the new balance, which includes the previously earned interest. You end up earning interest on the interest, boosting your savings even further.
Be Adaptable
Stay abreast of financial trends, explore new ways to grow your wealth and find new ways to save. By being flexible and adapting to market changes, you’ll have more chances to grow your wealth.
Determine Your Number
Deciding what your “number” is can help you achieve your financial goals faster. Ask yourself: How much do I need to save to build a substantial financial cushion for myself and my family? When do I want to buy a home? At what age do I want to retire?
Don’t Limit Your Beliefs About Money
Keeping an open mind about money is key. You might feel like financial freedom (or even financial independence) is impossible because no one in your family has ever achieved it. Or, maybe you don’t feel like you have the knowledge to achieve financial freedom. If this is you, try to reframe your perspective so you don’t hold yourself back from achieving your financial dreams.
Find Your “Why”
Determining your “why” will help you achieve financial independence and, ultimately, financial freedom. Ask yourself: Why am I saving for a specific goal? What matters to me? What sacrifices am I willing to make to achieve my financial goals?
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This article originally appeared on GOBankingRates.com: 8 Financial Freedom Tips by Tony Robbins and Why They Work
