Building Blocks for Building Wealth

Ask anyone what their financial goals are, and many people will respond with the desire for "financial freedom".  What exactly is financial freedom?  Having enough money saved that allows you to stop working completely?  Having money that allows you to take vacations when and where you want, and buy what you want without hesitation? Regardless of your personal definition of financial freedom or financial independence, you need to take specific steps to get there.

Just as a person must learn to walk before they can run, you must understand the rules of building wealth before you can become wealthy.  Building wealth and financial independence comes from planning and organizing- making priorities and saving consistently- and having the motivation to keep up with your plans.

Financial Freedom is a Choice

In order to build wealth and find financial freedom- you must first make the decision to become wealthy.  Sounds too simple?  It's not!  You really need to set a specific goal in order to create a strategy for obtaining the wealth.  Without a goal, you won't know when you've reached success!

Need Money to Make Money

In order to make money, you need to save money.  You need to invest a portion of your income on a regular basis so that the money can earn more money.  The road to financial freedom begins with a consistent savings schedule.  You also need to spend less money than you earn!  A simple concept, but in a time where so many people rely on credit cards, it's one that seems to be forgotten.  A good rule of thumb is to set a goal to save at least 5% of all of your earnings- and if possible, 10%.

Financial freedom comes from making your money earn interest- and avoiding having to pay interest to someone else!  Stop using credit cards.  The less you use credit cards and installment loans, the less interest you have to pay and the more money you can put into interest bearing accounts (like high interest savings accounts, certificate of deposits and other investment vehicles to earn you money rather than help you spend it).

Financial Independence Doesn't Happen Over Night

It's always better to start investing and saving money early in your life- so the money has more time to earn interest and build wealth for you.  In the case of money, time is your best friend.  The other thing to keep in mind when working towards financial freedom is that it won't happen over night.  If you consistently put money into savings and investments, you will be able to watch that money build more wealth for you- and the longer it has to grow before you remove it, the more money you'll make.

Sometimes it might seem pointless to save small amounts of money, but if $10 is all you have one week, don't just spend it because it doesn't seem like enough to save.  Placing $10 into a high yield interest savings account is a much better option financially than wasting the $10 at a fast food restaurant!