Find Financial Freedom

I’m sure there are many books about “day trading” your way to financial freedom, however, I feel there are other ways of achieving financial freedom that don’t involve the stock market. Also, I don’t have any experience of “day trading” so am not qualified to write about it, so instead will write about what I do know about.

Trade to me means business - self employed people are often called “tradesmen” - so to trade your way to financial freedom to me means “build your business up until it can give you financial freedom”.

So how can you do that? Firstly, you can avoid making the mistakes that so many people make, that of allowing their spending to increase to the level of their income. If you have a successful business that is making a lot of money, ask yourself “If I wasn’t making all this money, what would I need each month to live off”. That figure should then be your “drawings” from the business. Any surplus profit can then be used to invest.

By following this simple change in your business you will be able to achieve financial freedom very easily. Let’s do some numbers.

If you had a business that made profits of £10,000 per calender month, it’s not unreasonable to think that you will have to pay the tax man £2,000. That leaves £8,000. If you pay yourself a reasonable salary out of that (preferably as a dividend for tax efficiency) of £2,000, it would leave £6,000 each month that could be invested.

But what would you invest in? That’s the million dollar question at the moment, if you believe the rubbish you read in the papers. I can’t believe how many times I’ve read recently that the wealthy are struggling just as much as the poor are right now because there are no safe places to put your money. Really? Well why not? If you’ve got money to invest right now, there are pots of money to be made in either the stock market or real property.

Clearly, if you buy, hold and pray that the price will go up, then yes, you are going to struggle to find safe investments at the moment. But if you can work out how to make money in the two other market trends that are seen (sideways trend and downward trend), then you would be rubbing your hands with glee!

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