How to achieve financial freedom?
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1. Get multiple streams of income
2. Pay the minimums of your debts until you have a decent emergency savings so your credit does not take hits for late payments. No point in making huge payments on debt just to go into debt again when an emergency hits. Ideal emergency savings is between $1000 up to 6 months of expenses covered.
3. Use snowball method to pay debts off faster once you have step 2 complete. Below I will show you 2 methods of snowballing. For illustrative purposes, we will assume you have $100 to spare a month not going towards any expense and your emergency savings is fully funded.
DEBT A ($10,000 car loan at 4.6% interest rate with monthly payment of 290.56 for 36 months),
DEBT B (Credit card maxed out at $10,000 with 12.7% interest rate and minimum of $70 per month),
DEBT C ($40,000 student loans, monthly payment of $40 due to IDR plan, ignore interest)
The first method of snowball is to take the lowest monthly payment, which is DEBT C, and pay the $40 minimum PLUS $100. That means you pay $140 towards DEBT C until it is paid, then add that $170 towards DEBT B.
The second method is snowball by highest interest rate. In this case you would add to the minimum of DEBT B, then DEBT A then DEBT C.
4. Once the debts are paid, start investing the money you saved from getting rid of the debt.
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- 865 opinions shared on Education & Career topic.
Invest for long term income
Avoid debt unless in the pursuit of profit
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5Opinion
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Collect your money slowly over time if you can’t manage a little you’ll never have a lot
s Eliminate debt.
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Multiple sources of income is the answer.
- 1.1K opinions shared on Education & Career topic.
Work your 🚼 off
- 1.6K opinions shared on Education & Career topic.
Hussle
- 493 opinions shared on Education & Career topic.
Quit spending
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Stay out of debt!!!
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