3 Reasons Why You Must Start Young & Plan Early for Financial Freedom
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Financial freedom is a lifestyle many of us dream of. Freedom from debt and bills is a lot more attainable than most of us think. Inspired by the idea of living financially free, I came across the FIRE movement (Financial Independence Retire Early). As people become jaded with the idea of working almost into their 60's, they are turning the tables on the way we look at work and money.
Entrepreneur Allan Hu shares that he started his first business at 17, and through a series of lucrative ventures, investments, and strategic planning, he was able to retire at the age of 27. "It's all about how we look at money in the long term," says Allan.
"Money isn't just supposed to meet our immediate needs. It should be put to work to meet our long-term needs as well." By focusing on the fact that when handled correctly, money multiplies, Allan explains three reasons why you must start young and plan early for financial freedom.
Debt can hold you back
Debt is one of the biggest deterrents to achievement. "If you have considerable amounts of debt hanging over your head, you need that paycheck. It doesn't allow you to take risks and branch out," states Allan. "Paying off debt will hinder your goals because once the money is in, it's back out again." Allan believes that minimal to no debt is the best strategy for financial freedom. He explains further, "debt puts you behind before you can even begin."
Money compounds, but it takes time
When you save or invest, that money makes money by either multiplying or accruing interest. You'll grow far more money over 50 years than you will over 20, which is why you should start early. "Investing is an essential part of any money strategy because, over time, you will steadily make more money off your initial investments," states Allan. "The earlier you start saving that money, the more time it has to accrue interest."
Start early. Retire early.
"I don't believe we were meant to work our lives away," explains Allan. "You shouldn't work forever just to gain freedom in your 60's when your health could be failing, and you can't enjoy everything that freedom has to offer." Allan maintains that the earlier you start, the earlier you can relish in that financial freedom you finally achieved for yourself. Start now, and financial freedom is so much closer to tomorrow.
Retiring at 27 might sound extraordinary, but Allan explains that it is possible. "There are hundreds of financial strategies out there, but the one thing early retirees have in common is that they started at a young age," he concludes.