Where to Invest to Retire Early

retireMost of us want an early retirement but very few have the motivation, discipline and the know-how to achieve it. Retiring early requires the right planning and saving as well as strategic investing. To enjoy a good retirement life, you will need to invest in more than the traditional investment methods such as IRA and 401K. This is because these clubs can penalize you severally for taking out funds before the required 59 and half years.

When looking forward to retiring early, here are a couple of things you need to get right.


Up your saving rate

Saving is a core component of any successful early retirement. Even if you have the best investment strategy in the world, you will not realize a big percentage of profits if you only have $10 in your saving. To up your saving rate, you need to focus on two of the biggest sectors that consume your money, and that is housing and food. You need to cut back on these components and aim at making a 20 to 30 percent saving on these items. You need to cut on any underutilized memberships and cut back on impulse purchases.


Increase your income

The basic principle is this; if you can earn more, you can save and invest more as well. This will help you in achieving your financial independence sooner.  To boost your income, you can ask for a pay rise or ask to get promoted. Alternatively, you can start a side hustle or work extra hours. If you have at least three years of experience with you, you can be a good asset for many employers as they will all be looking to give you an offer and get the best out of you.


Put your money to work for you

Once you have worked towards upping your savings rate, you can maximize your income and turn your attention on all efforts that contribute towards growing your money. You need to understand that saving money alone won’t get you rich, but investing will. You need to focus on all the ways that can help you earn passively with little or no effort.

Lastly, you can focus on optimizing your taxes. As your income sources become bigger, you can focus on ways that will promote tax efficiency. You need to focus on what type of investments go into your taxable income and work on ways that can help you avoid paying some basic taxes. You can also focus on tax efficient investments such as pensions, tax-exempt bonds, us treasuries and bonds.


Tips to Saving Money Effectively

budgetWe all have very good intentions when it comes to saving money. We normally get advice to start saving money once we reach a certain milestone, be it age, a certain pay rise or when your kids move out. But in reality, you need to start saving when you develop healthy money habits. Taking time to manage your money better can pay off big time. It can help you stay on top of your bills and meet all your financial requirements. You can use extra savings to pay all your debts and help you have a healthier financial statement

To save money effectively, here are vital things you must follow;


Set up a budget

Setting up a budget is the very first step to taking control of your finances. It will take a little effort to come up with a budget, but it is a great way to get you on the right financial track. If you have a budget, you will less likely end up in a debt. You are also less likely to get caught up by unexpected costs. You are more likely to have a good credit score. If you are spending more than you earn, you must work towards getting your budget back on track.

Get out of Debt

You need to pay up your loans and credit card and get off all the debts. If you don’t pay these first, you need to know that they are attracting high interest. For any loan you have, you need to ensure that you don’t break the terms of the loan agreement. Even if you are looking forward to paying off another debt, you must pay at least the minimum required on loans and credit cards.

Set a savings goal

Some people find it hard to get the right motivation for saving. Saving is often much easier said than done. The first step to realizing your saving goals is to have your emergency savings. You should not worry if you can’t afford to have emergency savings at the start of your saving efforts. The best way to save money is to have a savings account and deposit some money in it at the end of the week or month.

Once you have your savings, you need to invest them. Make an investment plan that is in line with your timeframes and goals. For every expense that bothers you, figure out if you have saved for that particular expense. If not, create its saving goal and timeline and work towards meeting the saving needs.




Steps to Achieving Your Financial Freedom

savingsBeing free financially means that you can finance and maintain your desired lifestyle without a regular paycheck. Money tears families apart ruin relationships and marriages and keep people from pursuing their dreams. Troubles with money inject unnecessary stress, arguments, and anxiety into our daily lives to keep our discontent.

We all want to be independent in life, be it in the decisions we take or financial wise. The first step towards achieving financial freedom is having a paradigm shift in your attitude towards money. Some of us have a very bad interaction with money and we have terribly failed to achieve our financial goals. Most people inherit their behaviors and habits towards money from influential people in their lives, and this makes many fail to achieve their financial goals.

If you are looking forward to achieving financial freedom, there are notable things you need to do.


Take charge of your money

The simplest way of taking charge of your money is working with a budget. A budget simply involves a spending plan that helps you keep track of your finances. You may consider having a small notebook to record all your financial needs and expenditure. Ensure that you record every shilling you spend and keep track of where your money is coming from. Focus on your priorities and avoid mindless spending.


Get out of Debt

DebtThe first step towards getting out of debt is by cutting your costs. Debt puts your life on the backtrack and hinders your progress. Reduce your debt and aim at spending less than you earn. Get to know and keenly study your spending habits. Once you cut costs, allocate a portion of those finances to paying the debt. Avoid cutting a lot of costs at once as you may end up frustrated. The key is cutting costs gradually.


The power of savings

You need to save and supplement your income. You have to take care of your future by saving. Saving all involves preparing to spend in the future and being able to live a comfortable life throughout your whole life. You need to find means and ways of supplementing your budget. You need to set up a base for your financial well-being as careful financial planning can help you get away with money problems.


Overall, your options and choice of investing will be dictated mostly by the amount of time you have and your financial knowledge. It will also be determined by the goals you want to achieve. There are two key types of investments, which include active investments and passive ones. An active investment needs your daily input, you have to be there every day to help in managing the business. Active investments involve things such as owning livestock, running an agribusiness or running an enterprise.

Passive investments include things such as owning financial assets such as corporate bonds, treasury bonds, investing in unit trusts, money markets among others. The return on investment on passive incomes are generally very stable and safe. Finally, you need to establish your current financial positions and work towards improving it.