Entering the world of financial independence may seem daunting, but you’re not alone!
Many have successfully navigated this path, providing us with a map to guide you.
Think of it as a marathon.
Maintaining a consistent pace, being patient, and staying optimistic are crucial to achieving your goal. It’s not just about running but also about regularly monitoring your progress to ensure you’re still heading in the right direction. Omitting this crucial step is where many people falter – they get caught off guard because they need to make necessary adjustments in time.
Many people tend to deviate from their financial goals. This can happen for several reasons, such as insufficient savings, making wrong investment decisions, being influenced by emotions, or not having adequate insurance. However, the underlying cause for these issues is the need to check their financial progress regularly.
Financial planning is not an exact science. It is similar to flying a plane, where you need to make minor adjustments because the future is uncertain. Therefore, staying flexible and adaptable to change your approach to achieve your goals is essential.
What should I keep an eye on?
How long until you do not need to work: Focusing on months, not years, can motivate you.
Your savings rate: Are you saving enough for retirement? The more you save, the sooner you can retire.
Your stake in equities: What percentage of your investment portfolio is allocated to shares? Historically, shares have provided the highest returns over the long run.
Your expected retirement income: How much money will you need each month to live comfortably after you retire?
Your retirement income gap: This is the difference between expenses and income from sources like state pension or rentals. It represents the amount your investments should cover.
Your insurance coverage: Do you have insurance for unexpected situations? It’s vital to protect the things that matter most.