This April 2021, our CEO Dalia King was interviewed by Maria Lewis of Sizzleisland about pertinent and actionable financial tips for anyone looking to seriously start the journey to financial independence. 

You can watch the interview below, or if you prefer, you could read below the video for a text version of her main takeaways.

We know that someone listening would say “yes, we know about emergency fund *eye roll*”. You may know about it, but do you have it? Truly, there will never be enough reminders. 

The pandemic has given us very awful life examples of why emergency funds are necessary. People globally have lost jobs, many industries have completely collapsed, and others have had their salaries decrease substantially. These people have now become dependent on the state. 

This is the danger of having too little of an emergency cash stash or none at all. 

You want to aim for an absolute minimum of 3 months of expenses. You want to be able to know that if something were to happen today, that you would be ok for the next 3 months. This emergency stash goes from 3 months to 12 months. 

How do you get started creating your emergency fund? Do not leave it up to yourself. 

If you leave it up to yourself you are more likely to get in the way of your goals. Practical tip here is to get this done via standing order or another form of automated payments to the separate account. If your employer allows for you to dictate where a portion of your salary is to be deposited – let them handle this. It’s not something that you want to associate as money you can use. Do not think of this as money in your day to day bank account. 

Insurance is similar to an emergency fund but still quite different – it’s for unexpected and awful life events up to and including death. This is where you are planning to cater for your loved ones and dependents. 

Think about it, if you suddenly had a critical illness where you are now unable to work, you (and your family) would be protected because you have that fallback of insurance. 

This contrasts with your emergency fund, as the fund is more short term. 

Those two things elements will balance out and give you that fundamental cushion in life. It is very important that you have an emergency fund, in addition to life and health insurance. This is key before you even start to think about investing. 

Debt is not bad in and of itself – just like how money is not evil in and of itself. Debt allows you to do very many things – as everyone with a credit card, or a house mortgage knows. It allows you to get something you may have never had a chance of getting – when you know you can comfortably pay it back. 

However, there’s always a limit. It is possible to overextend yourself in debt. We’re not talking about house mortgages here specifically, but more commonly, if you have extensive credit card debts, or short term loans with the bank, you make yourself vulnerable to life’s range of issues. 

The problem here is that anything can happen to you. You can have an accident, or get laid off, but the amount you have to pay every month will not change. The repercussions of this is that it puts extra pressure on your emergency fund, extra pressure on yourself to try and get back into the world of work, and even more pressure on your body and mind as that is what you are depending on in order to earn an income. That is a very dangerous situation to be in. 

Really start to chip away at your debt, especially if you already have a significant monthly outlay. When all three of the practical tips are in place, then you can move on to what’s going to get you to financial independence – investments! 

These three tips are repeated so often because they truly are that important. Click on the video to really get into details (like what mindset Dalia utilised to achieve financial independence) of that short but powerful interview!