Most everyone hopes to one day achieve financial stability. Attaining such a goal could be the first step to achieving financial independence. This brief piece highlights several signs that may indicate someone is financially stable.
Exhibit A High Savings Rate
Financially stable individuals commit to a savings plan that secures a solid percentage of their income and other monetary sources. Financial experts suggest that individuals should tuck away at least 15 percent of their income through the entirety of their working lives. Certain monetary experts opine that people should consider stashing away a greater amount than 15 percent.
Living Within One’s Means
Those who display financial stability learn to live within their means. The temptation to enjoy the “good life” and indulge in luxuries one cannot afford is a common mistake that many people make. One important step to attaining financial stability is learning to avoid living in homes, driving cars and taking vacations that put a serious dent in one’s purse.
Possessing A “Rainy Day” Fund
Financial planners opine that those exhibiting monetary stability possess emergency funds that can sustain them for an extended duration in the event an unforeseen expense occurs or an unexpected event such as a job layoff takes place.
Being Well Insured
One critical step towards attaining financial stability is being well insured. Unexpected events such as illnesses, accidents or property damage can and often do occur. That said, these unfortunate events have the potential to result in devastating financial consequences. Ergo, financial professionals believe those who plan to become financially secure must invest in health and property insurance policies that provide adequate protection against most events.
Continuing To Amass Passive Income
Members of the financial planning community opine that, as individuals grow older and near retirement age, they should gradually attain more passive income. Passive income can take the form of various investments such as stocks, bonds, real estate).
Being On The Same Page As Your Spouse
Many financial experts believe that financial stability is almost unattainable unless both spouses share similar financial philosophies. If one spouse wishes to live beyond their means while the other adheres to more stringent monetary plans, disaster could ensue. Financial planners suggest that spouses always be on the same financial page.