3071: 5 Reasons You Won’t Reach Financial Independence by Chris Panteli with Fiology

[00:00:00] ServiceNow unterstützt Ihre Business Transformation mit der KI-Plattform. Alle reden über KI, aber die KI ist nur so leistungsfähig wie die Plattform, auf der sie aufbaut. Lassen Sie die KI arbeiten – für alle! Beseitigen Sie Reibung und Frustration Ihrer Mitarbeiter und nutzen Sie das volle Potenzial Ihrer Entwickler. Mit intelligenten Tools für Ihren Service, um Kunden zu begeistern – all das auf einer einzigen Plattform. Deshalb funktioniert die Welt mit ServiceNow. Mehr auf servicenow.de.

[00:00:30] This is Optimal Finance Daily – 5 Reasons You Won't Reach Financial Independence by Chris Panteli with Fiology.com Do you believe it's possible to achieve financial independence? One of your goals might be to achieve financial independence and retire early. No matter how big or small, it's essential to have goals in life. Setting realistic goals helps you get what you want out of life. What are your goals right now?

[00:00:58] There are lots of ways you can reach your goals. A quick search online reveals thousands of links all offering advice on how to reach your goals. What do a lot of these sites have in common? The answer? They don't usually tell you about their mistakes. Among other things, to be financially independent requires hard work, patience, effort, and has a steep learning curve. Many sites offering help focus on what to do and what the rewards are.

[00:01:26] However, learning about mistakes learned along the way is also important. After all, learning from our mistakes is one of the most human ways to learn. I've put together this guide of reasons you won't reach financial independence to help you understand some common problems people face. Knowing about them now means you can spot these problems developing early or avoid them altogether.

[00:01:48] Do you want financial independence? Ask yourself honestly, do you want financial independence? The obvious answer is yes. However, the first reason people fail to reach this goal is that they're not answering honestly.

[00:02:03] Some people may hear the term financial independence and think that sounds awesome. These people don't achieve their financial goals as they fail to follow up on their initial interests. Perhaps they got bored or wrongly assumed the high-paying job they've got now will last forever.

[00:02:19] The first step on the path to financial independence is to want to do it and mean it. If you genuinely want to be financially free, then stop saying you do and act. Start learning all you can about different ways to achieve your goals. Stop making excuses. I don't have time. I have too many commitments. I'll start tomorrow. The list of excuses is endless. Plan now on how you're going to become financially independent.

[00:02:47] By doing this, you're avoiding the first reason people fail. Lack of action. Four more reasons you won't reach financial independence. Now that we've covered the main reason people don't achieve their dream, here are four more pitfalls to avoid. Number one, not knowing the basics. Starting your journey to financial freedom requires spending some time learning basic concepts.

[00:03:12] Concepts such as budgeting, learning about different assets and investments, how to be tax efficient, and the importance of having a diverse portfolio are some of the things you need to know about to have a solid start. The good news is that all of these topics can be self-taught using one of the many available resources online. The bad news is that if you can't understand these basic concepts, you'll probably not be successful in your quest to become financially free.

[00:03:39] Spend as much time as you must learning these basic ideas. Use all the resources at your disposal until you fully grasp what you need to do. Armed with knowledge and understanding of these concepts means you have a much higher chance of succeeding. Number two, cash is not king. As a child, having cash in your hand meant you felt like you were rich.

[00:04:03] Now that we're adults with a better understanding of how far money goes, you should know that cash is not king. If you're keeping your savings in a standard bank account or even worse as cash under your mattress, then you are losing money. How so? You lose money thanks to inflation. This is a concept you must understand if you are to be financially independent. Every year, the price of goods and the cost of living goes up. This is due to inflation.

[00:04:30] The effect of this is that $1,000 today does not buy as much as $1,000 in a year's time. If your money is sitting in a bank account not earning interest, then you're losing money. The money can't buy as much later as it could now. To avoid this, you must put your savings into accounts with high interest rates. Doing this means your money will grow and you aren't losing out. Number three, fear of taking risks.

[00:04:57] To make money that helps you become financially independent will mean taking some risks. If you're not prepared to take any risk, then you aren't going to achieve your goals. Investing is an essential part of the journey to financial freedom. Any investment you make will carry an element of risk. The key is to mitigate your risk by having a diverse portfolio. If one investment struggles, hopefully the others keep growing to make up for it.

[00:05:24] Ups and downs are common when investing, and any funds that struggle one year could easily be higher the next year. Ultimately, you must decide what level of risk you want to take. However, if you don't take any risk, you won't get anywhere. And four, lack of patience. Today's world is all about instant gratification. The problem with this is that financial independence takes time. You won't get there overnight, unless you win the lottery maybe.

[00:05:53] It can take years to build the platform to call yourself financially free. There are a lot of factors that affect how long it might take you. The amount of debt you have, your income, and the time it takes to see a return from savings and investments. All these things and more can affect how long it will take you to achieve your dream of financial independence. You must be prepared for the long haul. Patience, consistency, willpower, and hard work are just some of the traits you need to cultivate.

[00:06:23] It's fine if you're not like that right now. Provided you are willing to do what it takes, then you can learn these things. Next steps. The road to financial independence can be a long one, depending on your individual circumstances. These reasons people struggle with achieving their goals are all easily avoidable. If you notice any of these reasons in your life, spend some time reflecting on this. Make any changes you feel will be beneficial, and you will successfully complete your journey to financial freedom.

[00:06:56] You just listened to the post titled, Five Reasons You Won't Reach Financial Independence, by Chris Pantelli with Phyology.com. And now a word from our sponsors at Betterment. When investing your money starts to feel like a second job, Betterment steps in with a little work-life balance. They're an automated investing and savings app, which means they do the work. While they build and manage your portfolio, you build and manage your weekend plans.

[00:07:25] While they make it easy to invest for what matters, you just get to enjoy what matters. Their automated tools simplify the complex and put your money to work, optimizing day after day, and again and again. So go ahead. Take your time to rest and recharge. Because while your money doesn't need a work-life balance, you do. Make your money hustle with Betterment. Get started at Betterment.com.

[00:07:54] That's B-E-T-T-E-R-M-E-N-T dot com. Investing involves risk. Performance not guaranteed. When was the last time you checked if your insurance still fits your needs? With Insurance Pro Agencies, powered by VIU by Hub, find the right coverage in minutes.

[00:08:17] Visit MyTopQuotes.com or text INSUR to 855-665-0829 to get personalized auto, homeowners, renters, condo, and other insurance quotes from over 50 top-rated carriers across the U.S. It's fast, simple, and designed to make the process as effortless as possible. Ready to start?

[00:08:41] Visit MyTopQuotes.com or text INSUR to 855-665-0829 today. Insurance Pro Agencies, powered by VIU by Hub, helping you protect what matters most. Insurance has never been this easy. Texting INSUR means you will receive information and occasional promotional messages. Message and data rates may apply. You can reply STOP to opt out at any time.

[00:09:10] I got three main points out of this article. First, you need to invest to reach your financial goals. Second, you need to be comfortable with some risk. And third, you need to be in it for the long term. The way I see it, the fact that I'm a long-term investor is intrinsically tied to my ability to handle the risk of investing. I accept that investing in the stock market requires a tolerance for volatility, especially when you have a 100% stock portfolio like I do.

[00:09:40] I deal with the volatility in two key ways. Firstly, I just don't watch the rollercoaster ride of the stock market very closely. I look at the money I invest like a tax that I'm paying to my future self. I see that money as not really mine, meaning present-day Diana has no claim to it. So whether my portfolio is up or down doesn't really have an effect on me right now, and I can happily ignore it.

[00:10:09] Secondly, I pair my investments with a really strong cash position. Most people think that I'm holding way too much cash because I have about a year of expenses just sitting there, earning no meaningful interest. But for me, holding this much cash provides extra insurance that whatever financial needs arise, it's unlikely I'll need to tap into my investments anytime soon, and so I can truly leave them be to grow over the long term.

[00:10:37] A passive investment style, alongside some blissful ignorance and long-term focus, makes the risk of investing much more tolerable for me. That'll do it for today and another installment of Optimal Finance Daily. Thank you for being here every day and listening, and I'll see you on the Friday show tomorrow, where optimal life awaits.