Gain Financial Freedom By Age 40

The concept of being “rich” is often associated with flossing designer clothes, buying expensive jewelry, and driving luxury cars. But what the truly rich understand is that having a lot of money gives you the financial freedom to live life on your own terms and control your own financial destiny. The material items come later. Living your dream life isn’t just for older generations. More and more adults are attaining financial freedom by the age of 40. According to a September 2019 study released by Coldwell Banker, there are already more than 600,000 millennial millionaires in the U.S. By 2030, millennials will hold five times as much wealth as they have today. The key is to start early to increase your chances of reaching this goal. In order to accomplish something special, you have to do special things.

Homes Sweet Homes

Creating additional revenue streams through cash flow is essential in attaining financial freedom, and investing in real estate is one of the most common ways to do this. One creative investment option is to purchase a multi-family residential property and live there. Not only can you collect multiple rents from tenants, but by living in one of the units, you’ll have more money to save for future opportunities. If your unit has more than one bedroom, rent out the others to friends and generate even more income! If there are no multi-family homes in your area, or if affordability is an issue, buy a three or four-bedroom single-family home, and rent out the extra rooms. If this is your first home purchase, you can use an FHA loan to lower your down payment to as low as 3.5%. Once you accumulate enough equity or increase your income and savings enough, you can move out, rent your room, and do it all again. There will be plenty of time to buy your own single-family home when you get older and start a family. But by then, you could already have a robust residential real estate portfolio.

Take Stock in Your Future

The stock market has been on a long bull run, and even though cyclical downturns are inevitable, investing in the stock market is another proven way to build your net worth over the long run. As a younger investor, you can take more risks than someone who is older and nearing retirement. However, even if you take a more conservative approach, trading––or buy-and-hold investing through individual stocks, stock bundles in an exchange-traded fund, or an index fund (such as the S&P 500, which averages a 10 percent return per year)––will provide a nice added boost on your path to financial freedom. And the beauty is, once you do reach your goal, these are gifts that keep on giving. You could potentially live off the interest of your investments while keeping your money in the market.

Side Hustle Nation

The previous two options are passive ways to make your money work for you. However, you should also explore hands-on opportunities to increase your incoming revenue. One idea is to take up a side hustle, like flipping items on eBay and Facebook Marketplace, doing freelance work, or bartending. You can also turn one of your skills or hobbies into a new business–and the beautiful thing is, you don’t need a large amount of capital to get started. The list of entrepreneurs who started a successful business with just a few thousand dollars in their pocket is long. And remember, rock bands aren’t the only businesses that begin in a garage before hitting it big–Apple and Amazon are just a couple of examples of now-gigantic brands that started that same way. Fortunately, becoming a unicorn business isn’t necessary for you to attain financial freedom, but even running a small side hustle can help you build a healthy financial windfall.

Invest in Yourself

Most industries have been disrupted and are changing rapidly. Your ability to keep up with these changes will increase your value (either to your current workplace or elsewhere). Fortunately, technology has opened up endless, convenient opportunities for continued education. Separating yourself from others in the talent pool by expanding your knowledge will increase your earning potential. A bigger paycheck will not only get you one step closer to financial freedom, but it will also give you more money for investments and business ventures. Notorious B.I.G. had a big hit with his song “Mo Money, Mo Problems,” his ode to not overestimating how much happiness comes along with being wealthy. While there is some truth to that sentiment, the problem isn’t so much about the money itself as it is the inability to define what brings us happiness. Money is our biggest source of stress, but it doesn’t have to be that way. Set your goals, establish a budget, and take care of your financial and physical health. Attaining financial freedom by the age of 40 is entirely possible if you are willing to put in the work now.
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