Three Easy Steps on How a Millennial can Achieve Financial Freedom

young money
(Photo : Pexels)

When you read anything about what a millennial retirement looks like, at a similar age you would find a widening planning divide between millennials and their predecessors.

Simply stated, most millennials are not excited about the prospect of delaying gratification and continuously saving to reach any ultimate goal in the future for 40 or more years, blaming social media and long-term unpredictability.

We want a fulfilling life, though. We want financial independence without the traditional path of retirement. Verily, we just don't know what's going to hold tomorrow.

As a result, we are more inclined than our predecessors to postpone gratification and indulge more. Like the popular hash tag, YOLO or "You Only Live Once." So while this may be true of our generation, with planning for a conventional retirement, there are some other millennial concept contradictions.

In other terms, the amount of student loan debt that we got and the low wages that most of us have come to accept. Accepting this can be difficult if you are looking for peace of mind with your finances why not use one of the leading comparison companies online. Meanwhile, we also have a tenuous working relationship as we do not seem to be able to find it as quickly as our predecessors. Then, if we have any hope of getting ahead, we are forced to learn new skills, take up side hustles, or find other ways to save more. 

The fact is, we don't know what might happen, but it's definitely not the status quo, because our country can't afford it. Therefore, with trouble seeing what's going on in our immediate future, let alone 40 or more years down the road, we're simply not faced with hard money choices our forebears made.

We're caught up in a conundrum for most of us to determine whether to spend or pay off student loans, and then the decision to own a house. Once we get away from the idea of affording more than staying in a condo or apartment, maybe someday.

We, millennials, are a group that is pushed into the world to make our own way - more so than baby boomers or Gen-Xers. And most importantly, it's up to us to take up and build on this opportunity. We need to start taking practical steps to achieve our financial independence. And as actions continue to intensify, sooner rather than later, we need to start acting.

So here are 3 suggested strategies that may help you reach financial independence in this new world of information technology boom:

1.      Control your spending habits

The dollar that is not spent is the easiest dollar won. Controlling our spending is the best element in our power and the largest lever we can pull to increase our savings rate.

2.      Invest money in assets

Conventional wisdom says reaching a secure retirement at the age of 67, the minimum threshold for maximum social security benefits; for 40 more years you should save 15% of your income. If you want a financial situation that is more convenient, I would advise to triple the savings rate. Consider investing in index funds, diversifying with MACRS depreciation and other tax deductions in real estate.

3.      Find multiple streams of income

All things equal, passive income is a higher form of income than active income because you're not working for it. Rather, whether you are sleeping, vacationing, or falling ill, it increases. Specific types also enjoy the same preferential treatment of tax as long-term capital gains at an attractive deferred rate of income tax. Different revenue streams are generating diverse financial resources.

RELATED: 5 Ways to Save for Your Future as a College Student 

© 2024 University Herald, All rights reserved. Do not reproduce without permission.
Join the Discussion
Real Time Analytics