The 4x4 Financial Freedom Plan for Entrepreneurs

Financial freedom is what every individual aims for but doesn’t have the right skillset to achieve.

There’s essentially 4 steps that are overarching in the process, with 4 mini-steps that make up the last step. It might seem a bit confusing. But don’t worry because I’ll make it clear in today’s post. Just sit tight.

The first step towards financial freedom is to optimize what you have.

The second is to eliminate all debt that you are accruing.

The third, is to establish a large cash reserve (savings) that remains untouched.

Finally, the fourth step is to invest for long-term goals. Investing in long-term goals is the final step that has 4 smaller steps that’ll help you be all set for the future.

However, you need to go through the first three ones before you aim for #4.

Essentially, you need to create a house that can survive accidents and emergencies. You need to ensure that there is nothing due, and that your influx of cash goes straight into a piggy bank.

Sadly, most financial plans don’t address many of the steps that you must go through before considering yourself financially free. A financial advisor can sell you all sorts of investment portfolios before you end up broke and on the streets.

Don’t be vulnerable to life’s uncertainties, and make sure that you save enough for a rainy day. We’ll also talk in depth about the 4th step, which you’ll have to read on to find out.

#1 Optimize current financial state

It’s a fairly straightforward process on paper, but a painful one when actually executing it.

Most people just don’t realize that they have the power to take control of their finances, and only they can create cash savings that can save up for long-term security.

Getting educated, cutting costs and saving taxes is the first step to controlling your financial situation. Live like a minimalist and enjoy the simple life for a few years, before trying to take a loan to buy a car. You need to think like a strategist and not like a comfort-seeking human being.

#2 Get rid of your reductive debt

Reductive debt is anything that is used to buy stuff.

Things that depreciate in value such as cars, credit card debt etc. You didn’t need that debt in the first place and you need to get rid of it to stabilize your financial health.

Start to build your credit and pay off all outstanding loans and debt before it starts accruing year over year. Ensure to have a clean slate at the end of this step, before trying to venture out to explore investment options.

#3 Acquire liquid and large cash reserves

You need liquid cash.

You need it in case you have medical emergencies, or when trying to take advantage of potential opportunities.

Cash is king, and this is a great point to include in your financial planning dossier.

You can’t be living paycheck to paycheck, and you need to be able to protect yourself in case the worst happens. Acquiring liquid cash includes selling off any assets that you don’t need, and working harder or diversifying your income sources to obtain more cash at hand.

You’ll need it to plan for your future.

#4 Invest in different categories of wealth

Now that you have taken care of all your obligations and have a lump sum of cash in your account, you can start thinking about investing in productive ways.

You don’t want to dump it all in stocks or buy a new asset that may never appreciate in the future. Think about investing smartly and taking advantage of compounding interest.

You’ll need to review all possible forms of financial asset management and aim to get freedom from investing in various options. You are now shifting your perspective from being someone in debt to becoming a wealth creator.

Here are the 4 mini-steps in achieving the final step to investment –

A) Tax Planning – Taxes are one of the biggest expenses for an individual, who has to go through life paying tax on everything they purchase. It’s all about making the most tax-efficient investments that you can. You can start with understanding various tax instruments that you can invest in and ensure that your money doesn’t face any unnecessary tax burdens regards to your state’s laws.

B) Estate Planning – Estate planning is a necessary step when faced with decisions with regards to life after death. You don’t want to have lawyers decide what happens with your money after death, and you want to create an effective plan for adequate arrangements. Estate planning reduces any uncertainties when it comes to planning for the future, and it allows families of the individual to benefit years after they’ve passed.

C) Asset Protection – Asset protection is an integral part of your total asset portfolio. You might have various people, creditors, institutions and parties try to take your assets away, and these assets may still have the ability to provide long-term income. That’s why its important to protect them now before it’s too late.

D) Independence Planning – It’s the process of investing your earnings so that you can get the income that you need to live the life of your choosing. It’s all about not wanting to be in financial turmoil when you’re older, so you need to start planning for it sooner than later. You should start early so that you can reap the benefits sooner, and your goals should evolve as you mature. Independence planning is also about protecting your future against any potential problems or issues that may arise as a consequence of wealth building.

Conclusion

Proper financial management involves not only growing your money, but also to get out of debt.

Getting out of debt not only feels better on the wallet, but on the heart and mind, as you begin to feel like a weight has been added to your shoulders.

You can start to take better financial decisions today by following the 4 steps outlined above!