HOW TO ACHIEVE FINANCIAL INDEPENDENCE THROUGH INVESTMENTS

In recent years, many young people have decided that achieving financial independence is their goal. The idea of having a steady income without depending on their family can be both appealing and scary. In this blog, we will show you how to get started and how to achieve financial independence step by step through investments.

Before you start investing, it's important to understand what financial independence (FI) means. In simple terms, financial independence means having enough money from your investments and assets to pay for your living expenses without needing a job or other sources of income. It's the ability to live off the returns from your investments, rather than working for money.

Creating your own budget is an important step toward managing your finances. Don't see a budget as something that limits you. Instead, think of it as a tool that can help you manage your money better. By tracking your spending and setting clear limits, you can make smarter choices and feel more in control of your financial future. The more you practice budgeting and stick to it, the more confident you'll become in making other important financial decisions, like saving and investing.

Achieving financial independence doesn't happen overnight. It's important to have a plan. Start by setting clear, realistic financial goals. Ask yourself questions like:

·How much money do I need to achieve financial independence?

·When do I want to be there?

·How much can I invest each month, and what returns can I expect?

The sooner you start investing, the more time you have to grow your money. Compound interest is a way to earn money from your initial investment and from the interest that has already accumulated.

It's also important to be consistent. Set up regular investments, no matter how much you can. One effective strategy is cost averaging, where you invest a certain amount at regular intervals, regardless of the market's ups and downs. This reduces the risk of unsuccessful attempts to make market predictions and helps make your returns more stable.

Don't put all your money into one type of investment. Instead, spread your money across different areas. Here's how:

- Stocks: Investing in individual stocks or exchange-traded funds (ETFs) lets you own shares in many different companies. This can lead to strong returns over time.

- Bonds: These are lower-risk investments that pay you regular interest, offering steady, reliable income.

- Real Estate: Property investments can generate passive income through rent and may increase in value over time.

- Alternative investments: One example is precious metals, which can help balance your investment portfolio and potentially generate some income.

By spreading your investments across different categories, you reduce the risk of relying too heavily on one asset. If one investment doesn't do well, the others might still be doing better, which can help keep your portfolio stable.

Investing is a big part of being financially free, but it's also important to control your spending. Look for areas where you can cut costs, avoid unnecessary spending, and prioritize saving and investing.

Also, pay off any high-interest debt you have as soon as you can. Debt, especially credits, can use up your money and make it hard to invest. If you can, pay off some of your debt.

The financial world is always changing, so it's important to regularly review your investments. Check how your investments are doing, make sure your investments still match your financial goals, and change your investments if you need to. If you're nearing financial independence, you may want to shift toward more conservative investments to protect your gains.

To build a robust investment portfolio, Unibank Invest offers a personalized approach. Together with your financial advisor, you can achieve your investment goals.

To open a brokerage account, fill out the online application or call +374 43 004 382.

You can achieve financial independence through investments. Start by understanding what financial independence means, setting clear goals, and making regular, consistent investments. Diversify your investments and pay off your debts to set yourself up for success.

Remember, the journey to financial independence is unique to each individual, and it requires discipline, patience, and continuous learning.