7 ways to financially plan your life

Article summary

• Financial freedom for most Nigerians means living without financial stress, while some also add the societal feeling of being a “big man”.
• Attaining financial freedom may be easier if expectations are lowered, such as living below one’s means and avoiding debts.
• To attain financial freedom, one should draft a wealth plan, invest prudently, keep track of finances, take advantage of market trends, and consider seeking advice from a financial advisor.
  

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To most Nigerians, financial freedom means living in a state of little to no financial stress. Some may add that societal feeling of being a “big man” to their definition of being financially free.

This shows that our perceptions of financial freedom and being rich differ greatly. While some may be comfortable with an average income and an escape from a nine-to-five, others want luxury, exuberance, and more.

However, being financially free may be more attainable if we reduce our expectations. While owning luxury apartments in desirable areas may be the dream, the reality is that many would never achieve it.

Being financially free can mean living comfortably by relying on savings without the burden of debt. Attaining financial freedom may seem like a cliché, but it’s actually easier than most people think, particularly if you have the necessary discipline and financial intelligence.

Here are six tips to help you get started:

Draft a plan for wealth

The path to wealth can be different, and the same strategy may not work for everyone. It is not a one-size-fits-all thing. Although it is not impossible to stumble on accidental wealth, it’s unlikely to become wealthy without a well-structured game plan.  

Do you like to work nine-to-five? You may settle for a career, continuously seek improvement in your field, and sharpen your skills. For some, the idea of receiving a monthly check is absurd and doesn’t tick their boxes for comfort, you may settle for less rigid paths like freelancing, trading, blogging or starting a business.

Live below your means

This is not the advice that most people would like to hear, but on your path to financial freedom, the beginnings are not necessarily rosy.

Countless times, you would hear billionaires share anecdotes about how they lived in their cars, ate less than three times a day, or lived in obscurity just to free up money and time to kickstart the wealth accumulation process. 

When starting out, you most likely have limited access to capital and any free capital would go a long way in increasing your financial buffer. 

Instead of living in an expensive apartment or high-cost neighbourhood, you can cut costs by decreasing your living standards, albeit for a short while. 

Avoid debts

You don’t want to have a lot of debtors down your throat so early on in your journey. Contrary to what many would think, lack of funds may not be responsible for the failure of most businesses. Capital in the hands of a novice would only speed up their journey to failure.

Moreover, the pressure of thinking about paying back these debts may just act as a leash holding you back.

Hop on potential market trends and opportunities

It has been noted across history that, insomuch as the crowd may be wise, they can be foolish at times too. One of the best positions to find yourself in is selling a product that is at the heart of a fad, trend or bandwagon. 

A good example is NFTs. Digitised art that had some of them inexplicably sell for millions at the peak of the craze in 2021. Being positioned in the thick of a fad or trend may catapult you into realms of wealth that may ordinarily take decades to compound.  

It is easy to see these moves in retrospect, but one way to take advantage of them in real time is by asking futuristic questions.

What new business potential does the AI revolution create? Are there any windows to capitalise on the imminent launch of U.S. CBDCs? 

Invest prudently

Your money should work as a slave for you and bring in more and more into your coffers. Learn about the markets and how you can “send your assets on errands on your behalf”.

There are various asset classes you can consider investing in, like cryptocurrencies, real estate, commodities, Exchange Traded Funds etc. 

However, it is necessary to warn that, like with most money-related matters, investing comes with its own risks. There is a possibility of losing some or all of your money invested if things go wrong. 

Always gauge your financial standing 

It is very easy to overestimate your financial situation by making subjective and preposterous assumptions about future projections. It is important to always gauge your finances regularly and take an objective look at where you are currently and where you want to be. 

Speak to a financial advisor 

You may hire an asset manager or financial advisor if possible to help you keep track of the current worth of all your assets and make decisions on whether to liquidate them or keep holding them.

On a regular basis, you may need to reevaluate your growth and worth in comparison to your projections and assess if you are making progress, and if so, at what pace.

In a world where the prices of everyday items are going up regularly, it is becoming more deadly to live with less than enough. Apparently, it is better and more peaceful to live with a surplus than to survive on deficits or live from hand to mouth. Hopefully, the gems in this article will help you attain financial freedom quickly.