Yahoo Finance 5 Perks of Improving Your Finances
I've been working hard to speed up my journey toward financial freedom for the better part of the last decade. I'm well on my way to early retirement. I readily admit that choosing to save money over consumption is not always easy. But pursuing financial independence is worth all the effort, and there are many side benefits along the way. Here are some of the perks you can enjoy if you decide to build wealth for the future.
You learn how to invest more efficiently. Once you start to save, compound interest will do much of the work of building wealth on your behalf. Over time you can find other ways to help your wealth grow faster. You might become a proponent of index fund investing in order to minimize fees and keep more of the investment gains for yourself, or turn to dividend stocks to get a payout from your investments on a regular basis. Increasing your knowledge about investing can allow you to boost your returns during your career and create a substantial increase in your spending power in retirement.
You feel more relaxed about work. When you have saved enough money to sustain your lifestyle, you have the freedom to quit your job whenever it gets too stressful or irritating. The freedom to walk away from a job you dislike begins well before you have enough money to permanently retire. I'm still working, but I'm not afraid to leave a job. I know my family won't need to downgrade our lifestyle if I leave a position, because we've already saved quite a bit of money for our future. This helps me negotiate from a position of strength and gets me more favorable terms on anything I do for work. On the other hand, if I was living paycheck to paycheck I would feel pressured to accept any work that comes my way.
You know that material possessions don't lead to sustained happiness. Many people learn through decades of trial and error that buying what they dream to own will not make them happy. Once you get used to the new possession you will start to want something else. Frugal people find ways to experience enjoyment in life without buying it. They realize that the best value of their money is freedom and not some fancy new possession.
You become more resourceful and less wasteful. You can certainly spend money to make a problem go away. This works most of the time. But spending money is not the only way to fix problems. For example, if you call a repair person whenever your toilet leaks, you might pay $100 for 15 minutes of someone else's time. And you might need to pay extra if you need the repair completed right away. Learning how to do simple home repairs yourself, or at a minimum how to turn off the water valve so the leaking water doesn't damage the floor, can save you time as well as money.
Your confidence will grow along with your nest egg. Financial freedom starts to enter your life before you are fully independent financially. When you are well on your way toward building a nest egg, you will feel less upset about every little setback because you can easily make it up. This ability to remain positive when encountering challenges will seep through to your relationships, strengthening the bonds between you and those you care about.
Reaching financial freedom can take years of disciplined saving, but you get to reap the rewards long before you officially retire. Once you start saving aggressively for your future, you will gain flexibility to make career and life decisions that people who are living paycheck to paycheck can't.
David Ning is the founder of MoneyNing.com.
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