By Many dream of financial freedom and living comfortably without being chained to a traditional job. However, achieving this can feel like a long and daunting process, as most people must work and save for more than half of their lives before they can retire from active work.
Thanks to today’s technology, saving, investing, and starting a business are simplified.
Since many tools, online resources, and strategies are available to help you figure out where to begin, achieving financial freedom can now feel like a short, fun, and automated experience.
Whether it’s budgeting, automating expenditures, investing, or digesting bite-sized financial tips on fintech blogs, technology impacts our economic lives and can significantly assist your effort toward financial freedom.
Today, we will discuss how successful people use technology to achieve financial freedom, the common challenges and risks of utilizing technology for economic freedom, and how they use it to overcome these challenges and unlock their financial potential.
Ready to learn to become financially free?
Let’s start by listing how successful individuals leverage technology to streamline their finances and achieve financial freedom.
1. Automated investment platforms
Financially successful people leverage robo-advisors to help them achieve financial independence. A robo-advisor is a digital platform that allows money to be invested on autopilot.
The best robo advisors typically ask you a few questions to determine your risk appetite. After funding your account, the robo-advisor uses proprietary algorithms to distribute your money into appropriate investments, making modifications as your situation and the market change.
You don’t have to participate in this reallocation. It happens automatically. When you open an account with a robo-advisor, there are many advantages, such as portfolio balancing and tax optimization.
However, the main advantage of robo-investing is lower fees—typically around 1%- generally less than what a professional investment advisor charges.
Unlike other financial institutions, they can charge lower fees because they have lower overhead costs. Plus, they automate a lot of manual work. These low costs mean you keep more money in your pocket or have more to invest.
For example, assume you’ve got a nice nest egg of $100,000. A professional investment advisor charges a 1% fee. That’s $1,000 yearly, whether your portfolio goes up or down.
Their portfolio recommendations might include overpriced mutual funds (another 2% gone!) and lots of stock trading, which can eat into returns.
Many financially successful people see robo-advisors as a smart choice for those who want a hands-off approach to investing while saving money on fees.
Robo-investing is designed for long-term, automated investing. To potentially reap the rewards of robo-investing, let your investments grow for at least four to five years or more.
2. Online learning resources
Most people are utterly ignorant about money and have no idea how to create it or how people create wealth. This ignorance is the main thing that separates financially successful individuals from those who are struggling financially.
Thanks to the Internet, several online learning resources, including courses, webinars, and educational platforms, are available to help you expand your financial education, learn about personal finance, acquire new skills, and stay up-to-date on market trends and investment opportunities.
Most financial service companies provide financial literacy classes, articles, and webinars that teach their users financial concepts. If these resources help you understand how interest rates work or the money supply, you can become financially literate.
However, note that some financial concepts are more relevant to day-to-day life than others, so if you’re looking to build your financial literacy, study concepts that matter to your personal finances, such as budgeting, saving, investing, and retirement planning.
In addition to financial literacy, online learning resources present opportunities for people to acquire new skills that are essential for achieving financial success.
For instance, courses covering digital marketing, entrepreneurship, coding, and data analysis empower learners to diversify their income streams, explore new career paths, and capitalize on emerging opportunities in the digital economy.
Successful people also make it a habit to stay informed by engaging with podcasts and forums that offer real-time information and insights into market trends, economic developments, and investment opportunities.
If you can expand your financial literacy, acquire new skills, and stay informed on market trends and investment opportunities, perhaps you’ll never be as wealthy as some of the super-wealthy famous individuals we know. Still, you will surely be on a path toward financial independence.
3. Digital budgeting and expense tracking
The importance of budgeting can’t be overemphasized. It is a key habit successful people have developed on their way to financial freedom.
A budget helps you figure out your long and short-term goals so you can work towards them.
If you drift aimlessly through life, tossing your money at every shiny, new object that catches your attention, you will never be able to save enough money to buy a car or put a down payment on a house.
As the saying goes, too many people spend money they don’t have to impress people they don’t like. And we owe it all to credit cards.
According to credit bureau TransUnion, the average credit card debt per borrower rose to $6,360 in Q4 of 2023.
Successful people, on the other hand, use budgeting to set goals, save money, track their progress, and make their dreams a reality.
Utilizing financial technology and digital banking platforms that make budgeting and expense tracking seamless enables them to see what money they earn, track expenses, and optimize investments more toward their financial goals.
4. Passive income streams
Passive income allows you to earn money without needing to work for it. Successful people leverage cutting-edge technology to streamline their lives. They understand that the idea behind financial independence is the ability to create several income streams to surpass their annual expenses.
But beyond annual expenses, your passive income should also be able to offset your non-discretionary expenses. Thankfully, it’s pretty easy to create one in this digital era.
The possibilities are limitless, from e-commerce dropshipping and affiliate marketing to software as a service (SaaS) and digital product sales.
Creating and monetizing online content, such as e-books, online courses, a blog, or a YouTube channel, can also be a viable source of passive income.
In addition to affiliate marketing, blogs, and YouTube channels, tech social platforms like Instagram, Facebook, and TikTok are also popular avenues for generating passive income through content creation.
To help them maximize their passive income streams, successful individuals leverage tools like HubSpot to automate many processes, reducing the time and effort required to generate and maintain income streams.
For example, using HubSpot's marketing automation, you can create targeted campaigns that drive leads, convert, and generate passive income. The passive income can then be invested in stocks, mutual funds, real estate, fixed income, cryptocurrencies, etc.
Planning to achieve financial freedom by creating passive income streams? Peddle can help you automate your email marketing, social media scheduling, and lead nurturing for your online business or affiliate marketing efforts, freeing up your time to focus on bigger-picture strategies.
Also, via our HubSpot Onboarding and Implementation service, we can equip you with the tools to research and track your investments within a robust CRM platform.
5. Remote work and freelancing
According to HubSpot, the remote work model is the second most popular work model today, and the reason why it is so is not far-fetched.
Studies have consistently shown that many workers prefer a remote or hybrid arrangement over on-site work.
Research by Atlassian stated that US knowledge workers prefer remote work primarily because they are simply happier working from home (47%).
With the advancing technology, successful people are capitalizing on global remote work and freelancing opportunities, which help them achieve work-life balance and save commuting costs, which they invest for their financial freedom.
6. Cryptocurrency and blockchain technology
Cryptocurrencies and blockchain technology have reformed the financial industry. Although its adoption rate is still relatively low, many financially successful people leverage the technology to diversify their investments and create wealth.
Crypto apps, including wallets, exchanges, and payment applications, enable you to hold and execute transactions in cryptocurrencies and digital tokens like Ethereum, Bitcoin, and non-fungible tokens (NFTs)
7. Crowdfunding and peer-to-peer lending
Crowdfunding simply means raising money from a group of people in exchange for some type of compensation. Due to advancements in technology, various crowdfunding platforms exist, and many successful people are able to access funds to start businesses or invest in one through these platforms.
You’ve probably heard of well-known ones like Kickstarter, GoFundMe, and Patreon.
On the other hand, Peer-to-peer lending is a specific type of business backing in which individual investors―not traditional banks or credit unions―fund small enterprises.
P2P lending typically takes the form of business loans or lines of credit. While individual investors often contribute the money, they generally do so via a lending platform (like Funding Circle or StreetShares). These platforms combine funds from several P2P investors to provide business loans.
Leveraging crowdfunding and P2P platforms can give you money from individuals you can use to start a business or invest in one to facilitate your financial freedom goal.
The primary difference is that P2P lending offers a business loan that you must repay, while crowdfunding gives you money that you never have to repay.
8. E-commerce dropshipping
E-commerce dropshipping is a business concept that allows you, as a seller, to sell things without maintaining them in stock. Instead, you work with manufacturers to send products directly to clients who place orders through your website.
According to a report by Statista, dropshipping is projected to grow a whopping 370% by 2026.
With a dropshipping operational model, you can focus wholly on selling and not worry about maintaining inventory with fluctuating product demand.
Many successful people are utilizing e-commerce platforms and implementing dropshipping models to start profitable businesses that will help them attain financial freedom.
9. Artificial intelligence and data analytics
Technology, particularly advances in AI and machine learning, has improved the amount and accuracy of the financial data used in risk assessments.
Successful individuals are able to analyze tremendous amounts of market data and historical trends, identifying patterns and insights that traditional analyses might miss by leveraging this technology.
This helps them to predict market movements and make more informed investment decisions more accurately.
10. Insurtech
Insurtech is the application of technology specifically to the insurance space. One example is the use of devices that monitor driving to adjust auto insurance rates.
Insurtech aims to use tech to simplify and improve the insurance market. The tool aims to provide more personalized plans and social insurance, as well as use data from Internet-enabled devices to dynamically price premiums based on observed behavior, something that major insurance firms may not prioritize.
This disruption in the insurance industry comes with many benefits, including reduced operating costs, decreased fraud, improved customer experience, and more.
Insurtech startups use cutting-edge technologies such as AI, ML, big data analytics, blockchain, and the Internet of Things (IoT) to automate broker tasks and recommend appropriate policies for individual coverage.
Financially successful people leverage Insurtech to help them provide insurance coverage for their health, property, and business, thereby ensuring financial security.
11. Boosted credit history
Good credit is essential in your financial life. It is necessary for obvious things like qualifying for a loan but also for less apparent things like receiving cellular phone service, renting a car, and possibly even achieving financial freedom.
Managing your credit will also allow you to save for a rainy day. An excellent credit score history will allow you to qualify for reduced interest rates and fees, freeing up more money for emergencies, investments, and retirement.
Reducing debt and building savings decreases stress and leads to greater financial independence.
Technology offers consumers with poor or no credit a way to acquire credit and build their credit history. Many successful people looking to build their credit scores do not hesitate to leverage tech platforms with such offerings.
The good news is that maintaining good credit is simple. Follow the five elements of excellent credit management outlined below to create and maintain a credit history, which will allow you to obtain credit when needed.
- Establish a credit report
- Always pay as agreed
- Keep your balances low
- Apply for credit wisely
- Demonstrate good credit habits over long periods
12. Automated saving and bill payment
Time is limited these days, and one of the best things technology can do is help you save time. Most people have long been familiar with the convenience of direct deposit.
Successful people are very particular with their time; rather than driving to the bank every payday, they use tech applications to automate saving a portion of their monthly paycheck.
They deposit emergency money using automation technology in a separate high-yield savings account.
Some technology takes it further by trying to change people’s behavior. For instance, some apps allow users to set goals and face social pressure if they fall short, such as paying $5 to a friend or charity.
The aim is to help users overcome the “loss aversion” bias, which causes people to make ludicrous decisions because they feel the pain of a loss much more than the gratification of a similar-sized gain.
In other words, a person may prefer not to lose an existing $50 rather than invest to gain $50.
Furthermore, successful people use software applications to pay bills, send checks, and complete various other tasks. With more time on their hands, they can focus on more revenue-generating tasks.
What are the common challenges and risks in utilizing technology for financial freedom? (And how to overcome them)
While technology offers numerous benefits for achieving financial freedom, it also presents challenges and risks that must be navigated carefully. They include:
Cybersecurity threats
With the rising digitization of financial transactions, the risk of cybersecurity breaches, such as hacking and identity theft, has escalated. Safeguarding personal and financial information is paramount to prevent potential losses.
Cybercrime is a major threat to the finance sector and poses significant risks to financial services companies and their customers.
Fintech payment and investment systems increase customers’ convenience but offer new attack vectors for criminals. A single attack can result in significant financial losses for a firm and its customers, damaging its reputation.
Furthermore, data breaches cost businesses an average of $4.65 million per attack in 2022. Companies that violate regulations (such as not taking due care to protect customer data) can face heavy fines from the FCA.
Modern attack methods can circumvent typical cyber defenses. Phishing emails were once riddled with grammatical errors and easily caught by spam filters. They are now professional and near-perfect replicas of legitimate business emails.
3.4 billion phishing emails are sent daily, making it the most common cyber attack. Any information hackers get through phishing, such as login details or account numbers, can be used in further attacks that can compromise systems.
To overcome this challenge, implement robust security measures. As a user of financial technology systems, ensure you regularly update the FinTech app you use whenever you get a notification to update it. Also, use a complex password that you can remember and make sure the app you use implements the following elements to ensure security:
- Two-factor authorization
- Biometric authentication
- Data encryption and obfuscation
- Real-time alerts and notifications
- Behavior analysis
Increased market volatility
Because everything seems easier regarding getting information and facilitating trading, the accelerated pace of financial market innovations due to technological advancements has led to increased volatility and unpredictability in the market.
Increased volatility means a higher chance of losing money rather than growing wealth.
To overcome this challenge, diversifying your investment portfolio is the best approach.
Safeguarding your financial stability and correctly navigating market fluctuations requires a robust understanding of investment principles and the application of risk management strategies.
Don’t believe that you can time the markets, no matter how powerful the tools at your disposal may be. Instead, focus on the things that you can control, follow a disciplined approach, and make sure you allocate assets according to your time frame and risk tolerance.
Continuously educate yourself about financial markets, trends, and emerging technologies to make informed decisions and effectively adapt to changing circumstances.
Lastly, diversify your investments across various asset classes and industries to ease the impact of market volatility and lower overall risk exposure.
Overreliance on automation
While automated financial tools and algorithms offer efficiency and convenience, relying solely on them can lead to complacency and overlook critical factors that require human judgment and intuition.
In addition, if these systems fail or their operation is poorly understood, it can result in operational disruptions or decision-making based on inaccurate data, which can be detrimental to your financial freedom goal.
To overcome this challenge, automated processes and human intervention must be balanced well.
While automation helps manage routine tasks, human insight and oversight remain essential for handling exceptions, complex decisions, and strategic planning.
Also, ensure you carry out detailed financial research on several other platforms besides the investment app you use to inform your investment decision.
Financially successful people use tech, but they do not rely solely on it. Whether or not you achieve your goals depends on you and not the app; hence, exercise your right to retain human oversight and intervention, review outcomes, interpret results, and exercise judgment when necessary.
Information overload
For many people, financial security and peace of mind depend on making sound financial decisions now and in the future. However, mounting evidence shows that far too many people make extremely poor decisions, and many cannot be classified as making decisions at all.
While some investors inevitably have too little information, others have too much due to technology. The abundance of financial data and resources available in this digital age can be overwhelming, making it challenging to filter relevant information and make informed decisions.
A risk-free investment, such as cash, does not produce long-term returns, and this approach may result in inadequate retirement savings.
On the other hand, having too many stocks or bizarre, exotic funds, assets, and certificates is incredibly volatile and can make or break you financially.
Most investors do not want to take such risks and are typically ignorant of them until calamity strikes. This type of portfolio can lead to prosperity if you’re lucky—or worsen your financial situation if you’re not.
To overcome these challenges and assuage the associated risks, filter information wisely. Use reliable investment information sources and employ critical thinking skills to filter information effectively, focusing on pertinent data that aligns with your financial goals and objectives.
Technical expertise
One of the biggest challenges of leveraging technology to achieve financial freedom is the ability of users to utilize it. Some people are less tech-savvy than others, so they find it challenging to understand how to navigate or use technology effectively to achieve their goals.
To overcome these challenges and assuage the associated risks, prioritize signing up with options with user-friendly interfaces that are easy to navigate, regardless of technical expertise.
Look for solutions with clear instructions, straightforward menus, and minimal jargon. Favor Platforms that offer support, built-in tutorials, explainer videos, and FAQs to help users understand how to utilize different features and functionalities effectively.
Utilize technology effectively for financial prosperity
While financial freedom is within your reach, leveraging technology strategically can help speed up the journey.
Successful people leverage several tools and apps, including budgeting apps, automated investing platforms, online learning resources, blockchain, and passive income streams, to streamline their finances, make smarter decisions, and achieve wealth.
Successful people understand that the business terrain is continuously evolving, so they dedicate a portion of their time and income to continuous learning and improvement.
They invest in self-training, learn highly demanded digital skills, closely monitor industry trends, and are open to feedback.
They are able to stay competitive and relevant and attract high-paying clients by continuously improving.
Financial freedom is achieved by combining and implementing the different financial management tech strategies discussed.
Each option might be overwhelming and come with its own set of challenges. But by choosing the right strategies and tools addressed to your unique needs, you can unlock your full potential and achieve sustainable growth.
How long it takes to achieve depends on the size of your financial goal. Achieving financial freedom can take several years of planning and adhering to a meticulous strategy. Nonetheless, it is essential to embrace the pace of that journey.
Ready to explore how Peddle can help provide strategic guidance and support to optimize revenue operations for your business? Schedule a free consultation with a RevOps expert today!
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