5 powerful steps towards financial independence and retiring early … – Motley Fool UK

Kevin Godbold | Sunday, 2nd July, 2017

Many people dream of retiring early with enough money to be able to do as they please for the rest of their lives. Turning that dream into reality is possible, as long as you take it seriously and commit to taking action. I reckon that if you take these five steps you?ll be well on your way to creating the conditions necessary for you to retire early and be financially secure. It probably won?t be easy to achieve, but with persistence and determination, I?m sure you can make it happen.

1. Believe you can do it

Many fail to achieve

Many people dream of retiring early with enough money to be able to do as they please for the rest of their lives. Turning that dream into reality is possible, as long as you take it seriously and commit to taking action.

I reckon that if you take these five steps youll be well on your way to creating the conditions necessary for you to retire early and be financially secure. It probably wont be easy to achieve, but with persistence and determination, Im sure you can make it happen.

Many fail to achieve financial freedom because deep down they dont really believe they can do it, so they end up fighting against self-sabotage.

Accumulating a fortune seems like a daunting task when you are at the beginning of the journey, and I reckon many people have a tendency to give up in a thousand little ways along the way. Perhaps you end up blowing your savings on that holiday of a lifetime. Perhaps you keep on doing that kind of thing. If youre striking for early retirement, thats self-sabotage.

To be successful, I think step one is to adopt a mindset of belief and determination that will guide you on your journey and help you make better choices along the way.

With your can-do mindset in place, step two is to grab your finances by the whatsits and get in control of debts and outgoings with the aim of living below your means. Its a well-touted concept, but it works.

Spend less than you earn and cultivate a saving habit. Plan to save, and work your plan as hard as you can. If you do that, the magic starts to happen.

This is like step two, but magnified then put into action and underlines just how important control of yourmoney is. With your domestic finances working better, step three is to really toughen up and act decisively, bearing down on personal outgoings and making hard choices. Hone the management of domestic finances until they work like a well-oiled machine so you can squeeze every penny possibleout of the leaky bucket and direct it towards your dream of financial freedom.

Im not suggesting a life of total abstinence and austerity, just a measured, balanced and controlled approach to your finances with you firmly in charge. Every pound counts because those pounds will compound over time into many more pounds.

Now that youve fixed all the leaks in your domestic budget step four is to direct your creativity to earn more income. Direct the surplus you earn straight to building up your savings and dont be tempted to self-sabotage by raising your standard of living and spending if you are already enjoying a happy and fulfilling lifestyle.

After applying yourself to building up your saved capital, step five is to make that money work hard for you by looking for ways to compound it, such as investing on the stock market.

Over time, shares have outperformed all other asset classes and you can get involved by using such vehicles as low-cost index tracking funds, managed funds, directed stock-picking services such as those offered here at the Motley Fool, or by embracing the concept of private investing completely and picking your own shares and investments.

Claim your FREE report

More here:

5 powerful steps towards financial independence and retiring early ... - Motley Fool UK