Financial freedom can be a really long way away if you don’t know the quickest and easiest way to get there.
In this article, we’ll be talking about the quickest route to achieving financial freedom, but first, let’s talk about the slowest route: a shortcut. That’s right. Whenever you find yourself scrambling for a quick way to build financial freedom or for increasing personal wealth, you’re being counterproductive.
The answer to financial freedom does not start with making more money or creating passive cash flow or even building a solid net worth.
Instead, it starts with the effective managing of your current cashflow, whether that flow is a mere trickle or a steady stream. Until this happens, making more money or having a more advanced investment strategy doesn’t make a lot of sense. Let’s look at how you can get control of your current cash flow.
Financial Freedom Made Easy: The Four Bucket System
The four bucket Powerspending system is the easiest way to get control of your financial life by managing and prioritizing your cash flow. With this simple system, you manage all of your spending in the following order and according to the following percentages:
First 10%: Invest according to your investment plan
Second 10%: give to charitable causes
Third 10%: set aside for emergencies and planned purchases
Remaining 70%: pay your living expenses
Now, upon first seeing this, many people would think: “Okay, but I need to pay my expenses first, so I’ll just make that my first step.” Don’t make this mistake. One of the primary differences between people who have financial freedom and those who struggle is the order or priorities. If you make investments a priority, your investments will grow and you’ll eventually build some financial security. However, if you make paying expenses a priority, your spending will always be focused on getting by.
Too many times, we make it a priority to invest and to save and to give once we “get ahead.” This kind of thinking is a sure way to stay behind for good. Financial freedom starts within your mind and with the way that you believe, then it goes into your behaviors and only then can it reflect in the results which you’re getting. Remember, the longest route is a short cut, so use this simple four bucket system to start prioritizing your spending today. You don’t need more money until you’ve developed a solid plan for managing what you already have and according to the right priorities.
The more you do this, the more you’ll realize that this is actually the quickest route to financial freedom.
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