Joint project of Investor.bg and the Management Company Compass Invest JSC.

When a person is young and still in his prime, he does not think much about saving or retiring. As the 30s approach or pass, we are, in fact, more or less halfway to retirement. Sooner or later, but better sooner, it is good to think about what we can do to achieve financial independence. Financial independence gives freedom, and freedom is everyone's dream.

Here are the most important financial lessons that can help you achieve financial independence.

1. Adherence to your budget

Although there are now even mobile apps for tracking personal or family budgets, few people actually manage to spend as much as they earn, or better yet, less than they earn. In general, the idea of sticking to the budget is about knowing where the money goes so that reasonable decisions can be made about spending it.

2. Saving

Robert Kiyosaki, the author of the bestseller "Rich Dad, Poor Dad," grew up with two fathers - his real father, who died with financial debts, and his "Rich Dad," who became the wealthiest man in Hawaii. Both his fathers are good at what they do, but the difference was in the way they thought and acted. That's why Kiyosaki made some rules for getting rich. And most importantly, "It's not about how much money you make, it's about how much you can keep." In general, most people know how to make money, but few know how to manage them properly. The main goal is to improve your savings and make more money go into your pocket than go out of it.

And really - once a person learns to stick to their budget the next step takes them to the moment of saving. Many financial experts give the example that the difference between rich and poor is that the rich do not spend all their money. Of course, in line with personal income, it is considered a good approach to set aside at least 10% or even 15% of personal or family budget revenues.

If you find it difficult to start something like this, try paying for things like clothes and groceries with cash instead of a debit or credit card. Withdrawing a fixed amount of cash each month to help you become more aware of the money you spend.

3. Defining a specific goal

Savings can also be achieved by setting specific goals. It is difficult to strive for financial prosperity if one does not know exactly what one wants to achieve - in one, two years or even longer. If you do not have a specific goal to work for, it can be difficult to find motivation. Whether it is a house or a new car, these goals should be carefully defined.

And when the goal is clear, the steps to it appear - be it saving, investing, optimizing costs, looking for additional sources of income and more. An important condition here is to be honest with yourself - honestly admit how much you can spend per month – realistically in order not to get into awkward situations.

4. Debt analysis

At some point, many people stop to think about how much debt they have - a mortgage, a credit card, a car loan, etc. And this is becoming a way of life. Financial experts advise everything outside the mortgage to be carefully monitored and, if possible, to avoid increasing indebtedness. Don't commit to paying more on credit than you can afford. So your financial history will have a happy ending. Otherwise said, fewer loans mean more money for savings and various financial purposes.

It is also important in this case to distinguish between desires and real needs. What are the most important financial lessons that you should teach your child?

“I have met a lot of clients who have made plans to retire with wealth and failed. People develop a bad habit of saying “I need” instead of the correct “want” from a very young age. So for that reason I will teach my daughter, whenever she wants a new toy and says she needs it, to explain why she thinks that” says in his analysis for The Wall Street Јоurnаl Patrick Lach, a finance professor at the Веllаrmіnе Unіvеrѕіtу, who is also the founder of Lach Financial.

5. Emergency Fund

Emergency funds are a good preventive measure against the risk of rising indebtedness. Thus, in case of need for urgent car repair or, for example, an emergency visit to the dentist, the credit card will not have to be used.

6. Invest in a mutual fund

Once you've managed to meet the above points - stick to your budget, keep track of your debts and allocate small amounts to an emergency fund, you can return to one of Kiyosaki's latest advice: "The poor focus only on their salary and the rich on their assets” It's time to think about investment that will bring higher return on your money. Or, as Kiyosaki says, the rich acquire assets such as stocks, bonds, real estate and more to make money which will work for them. Well, mutual funds managed to win the heart of Ivan Petrov thanks to their advantages such as high liquidity, economies of scale, diversification and professional management.

Now it's your turn to think about how to achieve independence in the future.

The article is part of the joint educational project "Alphabet for Investors", launched by Investor.bg and the Management Company "Compass Invest" JSC. The project will last for six months and aims to expand knowledge about investment opportunities in the markets, among people who have interest in trading in various financial instruments.

The article is not a recommendation for making an investment decision.