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Actually, what is financial freedom?
Everyone actually has a different meaning or meaning of financial freedom, but in general, financial freedom is a condition in which a person is financially free, in the sense, a state in which a person has enough wealth to meet all his needs to live without having to work hard and actively to meet very basic needs such as eating or buying clothes. Well, for someone who achieves financial freedom, the assets they own can make money whose value is greater than the cost of living.With financial freedom, a person can do whatever he wants or needs financially. In other words, financial freedom is marked when passive income, both from business and savings assets, has exceeded the needs of spending in a person's life. However, unlike others, citing an explanation on the OJK's Sikapi Uangmu page, financial freedom does not always have to be interpreted as having a lot of money. Financially freedom or financial independence can be obtained when a person can live enough, and be debt-free.
If referring to the last definition, a worker with an income that is not exorbitant has the opportunity to achieve financial freedom when he already has a pension fund, an emergency fund, investments with safe instruments and returns above inflation, life and health insurance, and funds for children's education if he has a family. In fact, debt is still tolerated for productive assets. Here's an example of someone who has achieved financial freedom.
Kinasih has an income of IDR 20,000,000 from business and investment assets, and has an income from a salary of IDR 8,000,000, so Kinasih's total income in a month is IDR 28,000,000 with a total monthly expenditure of IDR 6,000,000. To cover these expenses, Kinasih only needs to spend IDR 6,000,000 from the assets he owns, while the remaining assets that Kinasih still owns are IDR 22,000,000. Financial freedom means that you can be like Kinasih, be able to meet all your needs and generate income from passive income.
What are some tips for financial freedom that you can do from now on?
Are you pessimistic about being able to become Kinasih? You can achieve financial freedom, as long as you are willing to work hard first to achieve it, it is not easy, but this does not mean that it is impossible. Here are tips for financial freedom that you can strive for from now on.1. Understand your current financial condition
Are you pessimistic about your current age and income? Actually, it doesn't matter how old you are and how much you earn right now. Financial freedom is not measured by how much income you have, but rather whether that income can cover all your needs. Understand your financial condition, starting from how much you spend and how much you earn. Is your income able to pay off all expenses? If not, then you have not been able to achieve financial freedom. On the other hand, you must be able to calculate how much still needs to be fulfilled in a month so that the amount of income can be greater than the amount of expenses. That way, you can focus on determining your financial goals for the future.2. Pay off all your debts immediately
If you have any bills or debts that are still running at the moment, try to pay them off whenever you have enough money to pay off. Resolve yourself to get out of debt. If you are free from debt, you can be free from the burden of payments that must be paid every month, so you have full control over the income you earn. Not only that, being free of debt means that there is more money to save and invest for the future. Income from the assets you currently own must at least be able to cover all existing debts, so that financial freedom can be realized.3. Expenses must be smaller than income
Spending less than you earn is an important and key step to collecting income. The first thing you do is track your spending and see what you've spent your money on so far. You can start by keeping a journal to manage your finances by recording your income and expenses daily, weekly, or even monthly.
Then you can 'trim' things that are not needed and minimize spending on lifestyle. Of course, this step requires perseverance to bear fruit in the next few years. Always maintain a balance between expenses and income. So, avoiding expenses that are greater than income is an obligation if you want to move towards financial freedom.
4. Set your financial goals
Determine your financial goals in advance so that in the future you can more easily develop a strategy to achieve them. For example, in this month you should be able to save about 20% of your total expenses in the previous month. Then, in the next few months, you should be able to add 40% of your current revenue. You can then develop what strategies are right and suitable for you to meet those goals.5. Don't just set aside, but prioritize saving!
If previously you only always set aside, from now on you have to change the concept to a top priority. Prioritize saving above all else and it is recommended to save first before buying groceries, paying electricity bills, or paying rent. How to pay bills by deducting directly from salary is the best method to prioritize obligations. That way, you can use the remaining money to save, after paying all your obligations.6. Have an emergency fund
First of all, you have to distinguish between savings and emergency funds. What's the difference? Savings are money that you save for the long term. As for the emergency fund, funds are deliberately allocated for unexpected expenses, such as medical treatment and vehicle service. If you can't tell the difference, then your savings will be wasted. An emergency fund is one of the financial goals that you need to plan to achieve in the future. With an emergency fund, you don't have to worry about various financial problems that could one day arise. You can use emergency funds in emergency and urgent conditions such as when you suddenly lose your job, when a family member is sick and needs large medical expenses, or so on.7. Find other sources of income
If you have free time after work or on weekends, then consider increasing the amount of income you can generate. You can start a side business that could be your main job, while being able to generate a larger income than your main job. With extra money from additional income, you can use these funds to save, collect emergency funds, pay off debts, or invest.8. Start and invest consistently!
You must already know, that the money you have today will never be the same value again in the next five years. This happened because of inflation. If you keep money in the bank, its value will continue to erode, whether it's due to tax deductions, administrative fees, or inflation. However, if you invest your money, it will continue to increase in value over time. Therefore, never let your money sit in savings. Choose an investment instrument that is suitable and right for you. What are the types of investments? Here are the options.1. Deposits
In simple terms, deposits are investment products from banks with a higher rate of return compared to savings. However, the disbursement can only be done within a certain period of time and under certain conditions. Deposit interest is higher than savings interest, making deposits one of the investment products. As one of the investment products, deposits are the investment products with the least risk, but the benefits, in terms of interest rates, are also the smallest among other investment products such as stocks, mutual funds, and bonds.2. Fund
Mutual funds are a collection of funds that are managed to invest by buying stocks, bonds, or other financial instruments. Mutual funds are one of the easy investments because they do not require very large capital and can be done by individuals, institutions, and investment managers who will help you. Mutual funds will be managed by investment managers, so investments will be broken down into several investment instruments. This makes your investment safe from losses. For example, if stock A loses, your investment will remain safe because it still has other instruments that have been arranged by the investment manager. There are four types of mutual funds, namely fixed income mutual funds, mixed mutual funds, money market mutual funds, and stock mutual funds.3. Stock
Shares are proof of ownership of the value of a company or proof of capital participation. The shareholder also has the right to receive dividends according to the number of shares he owns. One way to own a company's shares, one has to buy them in the capital market. Buying company shares in the capital market is an investment that has a higher risk than other investment instruments.
However, because of the high risk, stock investment can also provide high returns or profits, both from dividends and stock price increases. The most common risk of loss in stock investment is a lower share price than at the time of purchase. The loss of stock investment will be even greater if the stock price plummets sharply. The rise and fall of the stock price itself is greatly influenced by many factors. Stock prices are not only dependent on the company's performance, but are also greatly influenced by market psychology.
4. Gold
Precious metals or gold are a practical and easy investment for anyone. For those of you who have medium or long-term goals, investing in gold is the key. In general, gold circulating in the market comes from PT Aneka Tambang (Antam) and PT Untung Bersama Sejahtera (UBS). The price difference between the two is not too far (UBS gold is slightly lower) and the emang level is the same at 99.99%.However, Antam gold is internationally certified and recognized by the London Bullion Market Association while UBS gold is nationally certified from PT UBS. However, the buyback price is almost the same. Before buying, check today's gold price on the official website of Antam Gold Boutique, Pegadaian, marketplace, or trusted gold stores. There, there is usually information on the price of gold per gram, half a gram, five grams, two grams, up to 100 grams. Compare prices and check the latest economic news, especially about gold, because domestic gold prices are influenced by world gold prices.
5. Bond
As one of the SBN or Government Securities, the popularity of bond investment is indeed not as crowded as stock and deposit investment. Then, what are bonds? Bonds are government debt securities issued by government entities or companies with a certain term. By owning bonds, it means that the country or company owes you the promised amount with an agreed maturity time. In addition, the debtor (in this case the state or company) will pay interest or coupons to you every month. Bond investment is also a safe and qualified type of investment.6. Forex
For some, forex may sound complicated and confusing. However, did you know that forex has a very high return on investment? So it's no surprise that so many people can get rich or make forex trading their main job and become a trader. Then, what is forex trading? Forex trading is the trading of currencies from different countries with the aim of making a profit.In this case, forex is short for foreign exchange. An example of forex trading is buying the Euro (the main European currency), while simultaneously selling the USD (the American currency) or commonly abbreviated as EUR/USD. Don't imagine forex trading means that you will often come to money exchange places such as banks or money changers.
Forex trading is different from manual transactions, the purpose of a person buying or selling currencies in a money changer is to exchange currencies to transact in different countries, so there is a physical exchange of money. Meanwhile, in forex trading, you can make transactions anytime and anywhere for 24 hours from Monday morning to Saturday morning. The goal of a person trading forex is to make a profit and become one of the options for investment.
7. Crypto
You must already know that crypto investment is currently very hype and upswing. Cryptocurrencies are also often referred to as cryptocurrencies. Cryptocurrency is a digital currency that is usually used exclusively online or in the digital world. The term 'cryptocurrency' comes from the word cryptography, and currency. This is because cryptocurrencies use many cryptographic techniques in securing transactions between users.Cryptocurrencies are used as a direct financial exchange between users without any third party or other involvement. You could say, crypto has become a means of payment for traditional methods such as cash, checks, and credit cards. Uniquely, cryptocurrencies are global so any country will have the same value. No need to worry about exchange rate differences. Although crypto itself is a form of currency, many people also see it as a cryptocurrency investment. Well, many consider that crypto has value to be used as an asset, just like when investing in dollars or forex. Many analyze that the crypto market will continue to accelerate and generate promising profits.
Want to start investing to achieve financial freedom but are still confused and afraid?
Have you ever imagined that forex trading could make you rich? Many people have proven it! They managed to become the richest forex traders and managed to achieve financial freedom. The easiest way for you to invest in forex is to choose the right place to invest, safely, and conveniently. Let's get acquainted with GIC. Unlike other conventional brokerage firms, GIC through the GICTrade platform provides a solution for traders who do not want to be charged with high trading fees.GICTrade is a peer-to-peer trading platform that brings together traders and market makers. So, what is special about GICTrade? As a platform that brings together traders and market makers, you as a potential customer can certainly choose between the two, namely becoming a trader or a market marker. GICTrade's role as a transaction venue provider can minimize costs and help maximize profits for traders and market makers as well as create a fair transaction atmosphere and results. Traders will benefit from the absence of commission fees and low swap fees and spreads due to the presence of market makers as liquidity providers.
You can also join the trader community on GICtrade's Telegram to ask fellow traders directly about their trading experience. Also follow GIC's Instagram to get webinar information and various attractive prizes. In addition, on YouTube GIC, traders can also learn to trade for free! What are you waiting for? Get more features that fully support you to start investing and trading forex through GIC. Make transactions simpler, safer, and more profitable. Start by creating a demo account and immediately achieve your financial freedom from now on.
