If you’re between 18 and 32 years old, you’re a millennial. You’ve been fortunate enough to be born into one of the most exciting economic periods of humanity. You have the privilege of living at a time when more than ever you can turn your passion to profit, or, for those who aren’t of the entrepreneurial spirit, you can at the very least, make money while you sleep.
The dream of becoming a millionaire doesn’t seem so distant anymore. It simply requires that you apply the philosophy of smart work over hard work. Doesn’t this excite you? Don’t you feel like you actually stand a chance of attaining that life-long goal of living a more comfortable life than your parents? I certainly hope so. Well, even if you’re not yet excited you are in for a treat anyway. So, grab a pen, a notebook, and maybe even a highlighter for good measure, and let’s journey to the promised land of “Financial Freedom”. Let us look at making money through the eyes of a millennial like yourself, on this step-by-step guide to wealth-building, aptly titled “New Money”.
First things first! What is financial freedom? Some of us can trace this term all the way back to our late elementary / early secondary school days when our parents gifted us a copy of Rich Dad Poor Dad by Robert Kiyosaki with the hopes that we would begin cultivating the habit of saving more than we spend. For others, the term may have been thrust upon us out of desperation, as we look for ways to cushion the shock that comes from leaving the financial shelter of our parents. Financial freedom happens when you are making more than enough money to cover your expenses from your investments than from your 9-5 job. Yes, this goes against the traditional belief system of aiming for a well-paid job and calling it a day as far as our financial burdens. However, the world has changed, and as such we need a new guide to ensure we don’t fold under the economic pressure that comes with adulthood.
Define Your Financial Goals
The first step to building wealth and actualizing your dream of financial freedom is defining your financial goals. For those who are avid followers of the Barclays Premier League you get to see 20 teams duke it out for 9 months to see who lifts the trophy. The truth is only one team can come out champion, and to be blunt, there are already set factors that limit the possibility of lifting the trophy to 4 or 5 odd teams. So why do these other teams that are not in this group bother at all? Well, could it be that they try so hard and give it their best shot only because they want to achieve their specific club goal, which may not necessarily be winning the title? Their ambition may simply be to stay away from relegation. They may have taken a more realistic decision, which they can then pursue with a passion.
This is similar to you waking up tomorrow and deciding you want to be a millionaire. It’s an exciting decision, but a decision alone isn’t enough to secure your success. You have to go on and assess your current state, just like the teams would assess, among other things, the ability of their players. After which you should proceed to establishing Specific, Measurable, Attainable, Realistic, and Timely goals or SMART goals. You can start by brainstorming and jotting down 3-5 financial goals you have for the next 6 months.
To summarize, the first step in attaining financial freedom is setting specific and realistic financial goals. You do this by assessing where you are currently, then envisioning what your version of financial freedom will look like. Once you have an understanding of this you’re better at preventing any of the possible pitfalls you may face on the way there. It is important to state that financial freedom is a process and not some get rich quick scheme. Although it takes time and effort to attain, it certainly lasts longer than any other method out there.
The next article in this series will explore a real world financial problem faced by millennials, and show how to utilize the SMART goals principle to solve it. This should give an idea of how best to apply the principle to your specific needs.
Photo credit: Vladislav Reshetnyak