No matter how much money you make, you’re probably not feeling financially “free.” You are consumed by fears about your pricey monthly mortgage, or paying your children’s college tuition bills, or saving enough money during your working years to comfortably live on in your retirement years.
These are the fears that even people who shouldn’t have to worry are worrying about, and they’re understandable. We’ve been indoctrinated to think that we just need to keep saving, saving, saving, and to squirrel away all of that money into the volatile financial markets. What a bleak future we’ve created for ourselves! Fortunately, it’s never too late to start undoing that mindset and charting a course to true financial freedom. Let’s explore the five most important ways you can put an end to your financial worries once and for all:
Financial Freedom Steps
- Rid yourself of Wall Street’s gambling mindset: Wall Street has taught us to allow professional fund managers to gamble with our hard-earned dollars. Wall Street uses slick phrases like “actively managed funds” and “target retirement funds” to disguise and obfuscate a disturbing reality: Anytime you’re investing on Wall Street, you’re really just gambling with your money, plain and simple. There is no such thing as a secure investment on Wall Street because Wall Street is and always will be subject to the whims of incredibly volatile market forces. To achieve financial freedom, you simply cannot afford to gamble with your savings, especially with the financial odds constantly stacked against you.
- Reduce your tax liability: With traditional investment returns, you can expect to be taxed outright by Uncle Sam. Hence, no matter how much you earn, you’re just going to keep paying more and more in taxes. The ultra-wealthy use tax shelters to reduce their liability, and you can adopt their same strategies. For example, a whole life insurance policy is a type of investment that involves entering into a private contract with a mutually owned insurance company; the government has limited ability to tax this private arrangement, even when your policy pays out dividends. In fact, as long as you reinvest your dividend payments back into your policy as paid-up additions, the government cannot tax your dividends at all.
- Keep track of your spending: No matter how much you earn, you need to rein in your spending, if for no other reason that you won’t be earning that much forever. Eventually, you’ll want to retire, and you need to start planning for that day now. It’ll not only make the transition to retirement that much easier, but it’ll also help you to identify where you’re spending money needlessly, in ways that don’t add meaningful value and happiness to your life. Cutting out this unnecessary spending now is hugely important to achieving financial freedom over the long term.
- Create a circular investing strategy: The traditional, linear approach to investing involves putting your money into a Wall Street fund and then sitting back and waiting for it to grow. With circular investing, you don’t allow your money to sit in one place; you keep it moving through investment products and seek to earn steady rates of return from each investment product along the way. Whole life insurance is an essential foundation of circular investing, as your whole life insurance policy contains a cash value that can be accessed at any time to fund other investments. In other words, you can borrow against the cash value of your policy and apply that cash value to other investments, such as real estate or commodities. Your whole life insurance policy, meanwhile, maintains all of its other benefits. The ultra-wealthy have used this strategy for decades, and there’s no reason you can’t use it too.
- Create a steady cash flow: With circular investing, you are not seeking to accumulate piles of cash from a single investment strategy; rather, you are seeking to create a steady flow of cash for yourself. The thing is, no one can live off money that sits untouched in an investment product; to achieve financial prosperity and ultimately financial freedom, we rely on a steady source of money to be flowing to us at all times. For example, whole life insurance policies will almost certainly pay you a steady dividend payment. Likewise, investing in real estate will provide you a steady source of rental income.
None of us want to be worrying about having enough money to live on, especially after retirement. Fortunately, there are important things you can and should be doing now to chart the course to your financial freedom. The keys are to get out of the gambling mindset perpetuated by Wall Street, to find tax shelters that reduce your tax liability, to keep track of all of your spending, to adopt a circular investing strategy, and to choose investment products that provide you with a steady cash flow.
For more information about how you can achieve financial freedom, visit Paradigm Life’s Financial Freedom section