Starting your journey towards financial freedom can feel like trying to solve a Rubik's cube blindfolded. But fear not! The first step is simple: live debt-free. It's all about widening the gap between what you earn and what you spend. By adopting an 'anti-budget' approach, you prioritize saving over spending, ensuring you're not just living paycheck to paycheck. Aim to save at least 20% of your income, or start small with the One Percent Challenge to gradually increase your savings rate. Next up, let's talk about building a safety net, aka your cash reserves. Aim to stash away at least three months' worth of expenses. This might sound like a mountain to climb, but it's totally doable by minding the gap between your income and expenses. Whether it's getting a promotion or starting a side hustle, increasing your income can help you build this financial cushion. And remember, cutting down on major expenses like housing can significantly boost your savings rate. Finally, let's dive into the world of investments. Start by contributing to your 401k up to your employer's match, then focus on paying off any debt. After that, pick your investment poison - real estate, stocks, or bonds. The key is to keep it simple and stick to low-cost index funds or ETFs. And don't forget about the age-old rule of thumb: your age minus 10 is the percentage you should invest in bonds, with the rest in stocks.

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Financial Freedom in Three Easy Steps

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Jul 29, 2024

Financial Freedom in Three Easy Steps

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