Secrets to achieving financial independence early

Published in, December 2011 by Dale Gillham

Financial independence is a goal many women strive to achieve, yet only a few accomplish.

For many women, the realm of all-things-finance exists as the clichéd domain of the opposite sex, therefore there is a general lack of confidence towards financial education by women.

Interestingly, many women are willing to spend years studying to gain a formal education with the expectation that they will obtain a job that will pay enough to enable them to sustain their desired lifestyle. 

Yet when it comes to educating themselves about how to create wealth, they never quite ‘find the time’ or worse, many believe that investing is men’s business.

The idea of financial freedom before retirement age is often thought-to be a complex issue for women as given that woman work fewer years than men and as such accumulate less superannuation, planning for retirement is more critical.

Let’s not mention the fact that woman are getting married and having babies later in life, and the high rate of marriage breakdowns all of which can further compound the issue. But there is an answer.

The three laws to successful wealth creation are:

Spend less than you earn

Unfortunately, there is a large percentage of women who do not get past the first rule of spending less than they earn and are therefore, unable to move on. 

It is estimated that more than one third of women leave a debt on their credit card each month, which is frightening. 

While you may not be in this group you will probably know someone who is.

For those who struggle with this one there is a solution, simply start by setting a budget. 

If you are like most women, you probably think a budget will restrict your spending, hamper your lifestyle and generally make you miserable. 

However, none of this is true – a budget is simply a financial plan to succeed. In fact it actually frees you from money worries as it allows to you spend more on what you want and less on the impulse spends that you don’t necessarily need.

Invest your surplus wisely (at least 10% of your income)

For those who ladies who have their spending under control and go on to invest their surplus cash, many fail to do their homework and consequently, through lack of knowledge, do not invest wisely.

A wise investment must have two components – it must give you capital growth (your assets appreciate in value) and income (cash flow). 

If you haven’t done so already, I suggest you decide how much of your income you can set aside for investments and get started.

Leave it alone so it can grow

Finally, even when we do invest wisely, often we are unable to leave their investments alone long enough to compound. 

Instead women often prefer to spend their money (profits from capital gain or income) on assets that depreciate in value to satisfy their short term needs rather than continue to invest in ‘financial assets’ that create growth and income.

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