“Financial Independence” is something that many here in Trinidad and Tobago are working their way towards. For some, the first major stumbling block however isn’t “saving”, but in fact – budgeting.
In this article, our Risk Manager in London does a quick dip into the process of budgeting with the expressed aim for financial independence.
This article is a 5 min read.
Look in most textbooks and the definition of financial independence is the point in time at which your investments start paying you more money that the sum of your ongoing and usual expenses.
When that happens – at that precise moment in time – you are said to have achieved financial independence. You no longer must work for a living, and you can make the decisions that you wish to make about your life.
For those of us already in the Firstline family, we have a wider definition of financial independence. You may have too. Perhaps you wish to be independent from your parents, or you want to be in a position financially where you can satisfy a want without compromising your existing lifestyle or other goals.
Whatever your definition, to obtain any degree of financial independence you must have a budget/financial plan, a high degree of single mindedness and determination, and the right partner at your side in the form of a capable Wealth Manager.
These are our tried and tested steps towards achieving financial independence through setting a budget and a financial plan.
Decide what financial independence means for you.
Is it being financial independent from your parents, or being able to retire at a relatively early age, or simply owning your own home?
Whatever financial independence means for you is your target.
What is your income and what are your expenses?
Can you supplement your income by opening a second income stream? How much of your monthly expenditure is strictly necessary?
What can you cut back or exclude in order to maximise your savings and your ability to create a pool of funds that will allow you to make investments and save for a “rainy day”?
At Firstline, we are experts at creating, growing, and maintaining wealth in Trinidad and Tobago.
With some of our staff working for over 4 decades in the financial industry, in addition to the success stories, they have witnessed many a person’s finances rise and fall or stagnate, and there are specific actions taken by those who keep their finances rising over their life, compared to those who were not as proactive.
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Having as frugal a lifestyle as possible will get you to your goal quicker. Looking for small savings may seem trivial but the more you make the quicker they build up. Instead of buying lunch each day bring a prepared lunch from home. I might say lime less, but you can still lime and do it in a manner that is more friendly to your bank account and budget.
As well as having regular savings to fund investments setting aside a regular sum to build an emergency fund for the unexpected potholes you meet on the road to financial independence is more than just sensible – it’s vital.
I should really change that heading.
But suffice to say, yes, it never too early to start investing but if you are an older citizen, it’s never too late either.
Payoff your debts as quickly as possible.
In this regard, a good Wealth Manager can help you strike the right balance between saving and investing and paying-off debt.
Having no plan is always planning to fail, but it’s also important to have a realistic plan too. That in essence is what good Wealth Management amounts to. Creating that realistic and attainable plan alongside you and then holding your hand through the journey as you build wealth.
We are Firstline Securities Limited, an independent financial services firm, based in Trinidad and Tobago.
We are experts in creating, growing, and retaining wealth for our clients in T&T, as well as in the French, Dutch, and OECS territories of the Caribbean.
We invite you to look around our website for more information. If you’d like to begin the process of becoming a client, simply click the button below.
