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Six Steps to Financial Freedom

To achieve financial independence or freedom (however you define this), you must follow certain basic rules, which haven't changed in 6,500 years of recorded history.

My definition of financial independence is: 1) Not living paycheck to paycheck; 2) Be debt free, except for a mortgage, as long as you have plan to pay off that mortgage as fast as you can; 3) Have a well-funded emergency fund; and 4) have a well-funded retirement account that is investing properly, or have a plan to have one well before you retire. You're an adult now (unless you're younger, so good for you), so there no excuse. THERE IS ABSOLUTELY NO EXCUSE. You can't blame in on your parents, your boss, your spouse, the dogs, the kids. GET GOING TODAY.

Don't fall into the entitlement trap. You are not a victim. Take charge of your own life. Build your own life.

Do you think anyone with wealth creating it by sitting on the couch and watching reruns of NCIS?
Here are the essential rules, which you will start today.

1. Set goals and have a plan

Read this recent article on 10 LIFE-CHANGING New Year's Habits

2. Budgets and Net Worth statements are essential

If you don't have a budget, you can't do step 3. So might as well as give up now and live the life you deserve. Which is probably what you have right now.

How to do a budget

Your Personal Net Worth

3. Have an emergency fund. 

My only comment is that Dave Ramsey's $1,000 emergency fund should be higher. When he wrote his original book, it would take at least $1,800 in today's dollars to purchase the same goods and services. If you're not saving, you won't make it past this step. You'll always be living pay-check-to-paycheck, always be in the hole, etc. Did I mention fighting with your spouse over money. STOP THAT RIGHT NOW. Today. Not next payday. RIGHT NOW.

4. Get out of debt. Stay out of debt

5. Invest wisely

6. Always save at least 10 percent first


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