Financial Freedom for Beginners – 10 Extrem useful Tips and Tricks

financial freedom

What does Financial Freedom mean?

Financial Freedom is a goal that many people strive for, but in the end, only a few achieve. Surely you have also imagined what it would be like to have so much money that “you can do whatever you want”. Quit your job, take a trip around the world and live without financial worries.

What financial freedom means in concrete terms or when one has achieved it is defined differently by everyone or depends on everyone themselves.

In principle, you can say that financial freedom is achieved when you are in such a good financial position that you can afford what you want.

How to Achieve Financial Freedom?

You can generally achieve financial freedom in two ways:

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  1. You get so much money in one fell swoop that you are completely financially free
  2. Your passive income is so high that you are also financially free

Financial Freedom through Assets

If your assets/capital are so large that you can’t spend them for the rest of your life, until you are financially free.

You don’t normally accumulate such a large fortune in just a few years. Unless you have a really extremely well-paid job as a top manager, sportsman, actor, etc.. Or you have inherited your wealth or received it through a lottery win.

Financial Freedom through Passive Income

If you’re one of those who didn’t receive a large fortune in one fell swoop, achieving financial freedom is a long-term process that requires discipline and frugality.

If you can’t get a huge chunk of money all at once, make sure you invest money you receive profitably and generate passive income. The goal is to increase passive income to the point where you become financially free.

When does one Become Financially Free?

Financial freedom is always dependent on each individual’s aspirations, expenses and income. Do you pay 500 € rent a month or 2000 €? What are your earnings? Are you just taking care of yourself or do you have family? These are all factors that significantly affect how much money/regular income you need to be financially free in the long run.

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Formula for Financial Freedom

The monthly amount that would be sufficient to call yourself financially independent/free is derived from your PASSIVE Income minus your Expenses, with expenses of course depending on your standard of living and other factors.

Therefore, the first step is to start saving money. Then invest the money you save in such a way that you increase your wealth and draw passive income from the investments.

Top 10 Serious Tips to achieve Financial Freedom

First of all, unless you’ve won the lottery, achieving financial freedom is a lengthy process that involves work, time and, in some cases, expenses.

The tips I present here can help you get closer to your goal, but you won’t find empty promises à la “How to earn $1,000,000 in one month!!!” here.

1. Change your Consumption Behavior

If you’ve set your mind on becoming financially free but don’t yet know how to go about it, the best thing to do is start cutting back on your consumption. Does it always have to be the most expensive and newest?

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Maybe you’ll come to the conclusion that you’re happy even without an expensive car/new cell phone/expensive restaurant meals, etc.

Give up all expensive habits and items you don’t need.

This way you reduce your expenses and at the same time save money every month, which you can invest profitably.

By the way, you can find a list of savings opportunities here.

2. Keep an Eye on your Finances

By keeping an eye on your finances, you can ensure you’re not living beyond your means and thus saving money on a regular basis. For this purpose, it is best to keep a budget book in which all income and expenses are noted.

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For the sake of simplicity, I use Excel as part of the Microsoft Office 365 version. There you can easily access templates for budget planners, so you don’t waste time. You can buy the Microsoft Office package* with the applications Word, Excel, PowerPoint, Outlook etc. here at Amazon.

3. Regular Sources of Income

The goal should be to have enough money to last until the end of your life. Being broke after one year is not what it’s all about.

Therefore, it is indispensable to generate regular revenue streams. You can generate this passive income, for example, through dividend yields from shares or other investments. Leaving the money in the savings account is definitely not an option.

4. Be Aware of how Much Money you Need in a Month

Think about how much money you would need to generate passively each month to live on. Include factors such as inflation, additional costs due to illness/age, etc. in your considerations. This number is your goal to reach.

5. Set (intermediate) Goals

If, for example, your goal is to generate monthly passive income of $3000, but you are just starting out, it makes sense and is psychologically important to set intermediate goals.

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This way, the goal no longer seems completely unattainable and the milestones provide a predefined course, so you’re less likely to stray from the actual goal.

You shimmy from milestone to milestone and each intermediate goal completed is a success.

6. Create a Schedule

Set an approximate timeline for when you want to achieve which goals. By doing this, you’ll prevent yourself from putting off unpleasant tasks more and more.

7. Start and Stay Persistent

Probably the most difficult part of the whole thing. Success (usually) does not come overnight. With a starting capital of e.g. $10,000 you won’t achieve financial freedom overnight.

But even less so with daydreams and “what-if” ideas. Therefore, it is essential to just start, leave the excuses and then not give up after the first failure.

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8. Success is Mindset

Always try to see the positive. You can read about how to build a positive mindset for long-term success in the book ,,The perfect Mindset”*, available for order on amazon. I can only recommend the book. It has helped me to be more consistent with my goals.

Just the fact that you have made a start, are saving money and slowly building up assets, perhaps even generating your first passive income streams, is a great success.

You can and should be proud of that! If you look positively at what you’ve already accomplished and focus on your successes, you’ll have more motivation to keep going.

9. Leave your Comfort Zone

As always, the proof of the pudding is in the eating, nothing ventured, nothing gained, etc. etc…. Slogans, yes, but in the end they are true.

If you think you have a great business idea, but you have not yet dared to put it into practice, then write down what the opportunities and risks of this venture would be. What could happen in the worst case?

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Often it is not the risks that are the reason for not starting something, but the fear of the new, the fear of leaving one’s comfort zone or the fear of failure. Which brings us back to the mindset issue.

A good book that can help you to become stronger-willed and to realize your goals NOW is “Uphill with Tailwind: Using Willpower Efficiently”.

10. Do Not Lose Sight of the Essentials

Sure, saving money and making money, or better yet, having money, is all well and good. But don’t lose sight of the essentials.

In other words, is it really worth doing without for 20 years, living without family, vacations, etc., just to accumulate enough wealth to be financially free for the next 40 years?

Regularly reflect on whether the path you are taking is the right one for you and is not marked by limitations that you may later regret.

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Money alone does not make you free and certainly not happy. And freedom begins in the mind, often it is those with great wealth who -although financially free- are trapped in a negative thought prison out of fear of loss of wealth and poverty.

Therefore, think carefully about how far you want to go, what you can and want to do without in order to become financially free.

Summary: How to reach Financial Freedom

In general, it can be summarized: When financial freedom is achieved depends on each individual’s aspirations, income and expenditure.

Most often, the goal is to achieve financial freedom by generating regular, passive income.

The path to passive income that will make you truly financially free is long and can only be achieved with a lot of discipline and perseverance. First of all, think about how much money you would need, for example, every month to be financially free or, if you already have a large fortune, how long the money would last (preferably until the end of your life).

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Then start saving money, invest and build passive income little by little.

Don’t lose your patience and don’t let yourself become unsettled if (at first) the desired success doesn’t materialize. Don’t work too hard on your goals and don’t lose sight of other important things in life. With the right idea, enough perseverance and motivation -and of course the necessary luck- you can achieve financial freedom.

If you’re looking for inspiration on how to build passive income, you should check out this post. There, 36+ methods are presented on how to build Passive Income.


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