Independence Day 2023: Experts share tips to achieve financial freedom

Another valuable lesson is the importance of timing purchases. Emotional spending decisions often result in financial pitfalls. To counter this, planning purchases, and adhering to a budget can lead to wiser spending habits.

The power of compounding, fueled by time and return on investment, can yield substantial results. Saving before spending, adopting strategies like the 15-15-15 rule, and investing early in quality stocks or mutual funds can contribute to reaching financial milestones.

"Smaller investments over a long-term multiply because of the power of compounding and will go a long way in helping achieve financial freedom faster," said Sarvjeet Virk, Co-founder and MD at Finvasia, a fintech company.

According to Alok Rungta, Deputy CEO and CFO at Future Generali India Life insurance, an insurance company, the financial goals must be kept very clear.

"One needs to clearly define goals that are easier to achieve. These goals will depend on one’s lifestyle, one’s major outgoes or expenses planned in life, like making the child study at a national university or abroad, expenses for wedding celebrations, and more. All these kinds of future financial expenses need to be kept clear and the financial investment goals need to be formed accordingly," Rungta told CNBC-TV18.

"One also needs to be honest in the timings of placing each goal. Probably make a calendar plan and work towards achieving them. There is a goal, a reality of achieving the goal, and a gap between the two that needs to be met and fulfilled. Financial goals are futuristic and need good, advanced planning," he said.

People should also anticipate the potential risks and work on those uncertainties.

"Define identified risks and study a pattern of investment that works as per the needs and planned, financial goals. Finally, it is the earning opportunities, saving behaviors, and various investment philosophies that will define the investments. One can diversify adequately, adding the risks," Rungta added.

Investment and insurance are the two most significant mediums for achieving financial freedom.

According to Indraneel Chatterjee, Co Founder & COO at RenewBuy, an online insurance platform, while investment helps in multiplying the wealth, insurance helps in protecting the wealth that is created.

"People have the tendency of investing in various investment channels but most of them, even today, overlook the importance of insurance. One should note that insurance is equally important for people, across all age- groups, the sooner one starts, the more beneficial he or she is. People assume that only older people above 60s can get ill or face other health-related issues, however, an increasing number of young people are at health/ life risks today, due to hectic work schedules, fast-moving life, increasing number of accidents and abrupt lifestyles," Chatterjee told CNBC-TV18.com.

Adding to this, Dhirendra Mahyavanshi, Co-Founder at Turtlemint said that insurance is the key to financial liberation and achieving universal insurance for a country like India becomes integral to ensuring economic support at a micro level.

For investments, there are multiple options like fixed deposits, mutual funds, NPS, equity, and more.

"Depending upon one’s risk profile, one can select a mix of equity and debt instruments to invest in. However, to protect the portfolio against volatility, it is recommended to have around 10 percent of the portfolio invested in gold, be it in physical or digital form. Due to the nature of liquidity that gold brings to one’s portfolio, it can be used instantly as a collateral too during urgent financial needs through instruments such as gold loans," said Anuj Arora, Co-founder & COO at SahiBandhu, a gold loan platform.

The quest for financial freedom should ideally start as early in life as possible.

As per Rungta, starting young offers more time to recover from any potential market downturns. Young investors can weather short-term market fluctuations and still benefit from the long-term upward trajectory of the market.

Adding to this, Chatterjee said that today’s youth start earning at the average age range of 21-26 years and this is the best time to start saving for the future.

"Both investment and insurance options should be parallelly looked into, for creating financial freedom in the longer run. In the insurance category, buying insurance at a younger age leads to payment of lower premiums. In life insurance, when one buys policies at an early age, the money has more time to grow, increasing the cash value of the investment in the longer run. In health insurance, there are a host of benefits for the younger generation. From a substantial decrease in waiting period time limit to waiving off of medical screening, OPD expense benefits, maternity benefits, the perks are endless," he said.

However, it's essential to emphasize that it's never too late to embark on the path to financial freedom. Regardless of the stage in life, taking steps toward sound financial planning, risk identification, and mitigation while keeping potential life contingencies in mind, can help investments lead to positive outcomes.

As the world celebrates Independence Day, let us remember that just as nations strive for sovereignty, individuals too can embark on a journey to economic independence through skillful planning and strategic execution.