Everyone has things they dream of doing. Mine was to write stories and novels. I started saving money from an early age as I knew it was hard to make money from writing. In the meantime, I got married and my son and then my daughter were born. Due to my increasing responsibilities, it took me a long time to reach a level of savings where I could feel financially secure. At the age of 47, 25 years after deciding to become a writer, I was able to write full-time. Currently, I have 8 science fiction books published in Turkey. While doing literary studies, I also write articles in Hive.

In this article, I would like to share with you some ideas that I find important about financial independence. I define financial independence as not having to do any unwanted work. Living without a regular income from a particular workplace is not sustainable. There is a proverb in Turkish, "Not even a mountain is enough to spend what you already have". Therefore, we should be able to sustain our life not with our savings, but with the return of our savings. Let's assume that the financial assets we have accumulated will have a real return of 5 percent per annum. Then we should have a savings of 20 times our total annual expenditures. This corresponds to a very high number. Fortunately, there are many tactics we can use in this regard.

Use The Power Of Compounding

If I had one sentence to say about personal finance, I would say, "Use the power of compound interest". The amount of money that needs to be saved may seem daunting at first. However, the compound interest effect will help us in this regard. Let's assume for a moment that inflation is zero. If we can get 10 percent annual return on our investment, we can quadruple our principal in 15 years. Given that we continue to save money over the years, a snowball effect will occur. At an early age, time periods like 10-15 years seem to be infinitely long. But the years pass like a river. Therefore, it is important to start benefiting from the compound interest effect at an early age.

Control Your Spending

No matter how much their income increases, people still manage to spend every penny. When this issue comes to the fore, they complain about the cost of living and the excess of needs. We can understand that the things called needs are relative from the differences in living standards between different cities and countries. A certain percentage of the income must be reserved for saving. (This ratio was fifty percent for me, since my income was well above the average. A ratio below twenty percent is not acceptable in my opinion.)

Take Advantage of Public Incentives

States apply some incentives to enable their citizens to save. Applications such as a discount in the housing loan rate of the first house to be purchased, and additional state contributions to individual pension policies are examples from Turkey. It was once said that the new generation did not prefer to buy a house. Although rising real estate prices make it difficult to own a house, especially government-supported projects can be benefited. The absence of rent payments will be a factor to support early retirement plans.

Diversify Your Investments

Investing in various investment alternatives can be a good solution to be less affected by the accidents that will happen on the road to early retirement. In addition to crypto, we can also invest in stocks, for example. Funds can be invested in a mutual fund that includes more than one instrument. Diversification of investments can be a good solution both to prevent possible loss of return and to be less affected by security risks.

Take Reasonable Risks

I like the commercial sentence, fortune favors the brave. The advantage of long-term investments is that they provide the opportunity to invest in risky assets with low probability of loss. If we HODL an investment alternative, short-term decreases and increases will not affect us. Therefore, we can invest in high-yielding assets such as crypto, stocks. We can consider high-yielding assets in two separate groups, such as start-up companies (coins) and established companies (coins).

Care of Risk Management

As I have been a banker for over 20 years, I have not needed an investment advisor to guide me. If financial matters sound like French to you (and you don't speak French), then seeking help from an expert may be a viable solution. Because while creating an investment portfolio, it is very important to consider the risk-return balance. Basically, it would not be wrong to say that assets with high returns contain high risk. While making an investment decision, it would be appropriate to evaluate the return together with the price volatility of the relevant investment instrument. Using leverage and trading on credit in the crypto market makes no sense to me. Gradual buying and selling can help in acquiring highly volatile assets at a reasonable price and then selling them at a reasonable price.

Don't be In a Rush to Raise Your Standard of Living

People's incomes increase as they become more proficient at what they do. This allows for raising living standards over the years. The satisfaction that comes from reaching a new standard does not last long. Thus, expenditures increase in parallel with the increase in incomes, and in most cases even more than incomes. This causes the age at which financial independence can be achieved to be postponed to later dates. Because the amount of savings we can make each month, as well as the income from savings, has an impact on our savings.

CONCLUSION

I think that it is important to be moderate when it comes to saving money, as it is in other matters. Enjoying life is as necessary as resisting the consumption culture.

In recent years, important alternatives such as investing in cryptocurrencies have emerged. Taking full advantage of the revenue potential that crypto can provide, regardless of temporary price fluctuations, will help us on the way to financial independence.

In summary;

• if we avoid unnecessary spending
• adopt a long-term investment approach
• so if we harness the power of compound return
• while caring about risk management
• while not afraid to take reasonable risks

we can gain our financial independence and retire early and have time to do the things we love to do. At least that's how things worked for me.

Thank you for reading.

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