How to Achieve Your Own Financial Freedom-pt1

What is Meant By Financial Freedom?

In the 21st century the concepts of time and money are being redefined. ''Financial Freedom'', is one such term that has gained much importance in the changing financial scenario.

''Financial Freedom'' means the freedom from continuous financial responsibilities through a planned management and allocation of assets. It frees a person from back-breaking work by giving him a steady source of income for life.

One must not think that a financially free person is also debt free. However, his prudent asset management ensures that his debts do not become a burden but only a part of his over-all expenses. In this way, his debts do not hinder his long term financial goals.

Financial freedom cannot be equated with being rich. One must not forget that surplus wealth requires constant supervision. In the long run, a rich man's obligations do not make him ''financially free'' in the true sense.

Thus, financial freedom maybe defined as a lifestyle that blends expenses and income according to the individual preference. This makes ''financial freedom'' a more possible and convenient state of being.

Financial Freedom is Time Freedom

''Time is money'', is the general belief in the professional world. This attitude does not allow space for leisure time. However, financial freedom has changed this concept of work by enabling a person to enjoy leisure without hampering his steady income in any manner. The entire concept of "financial freedom'' is based on assets and investments that are compounded over time to generate money. It takes care of the regular expenses and leaves a person with both time and money in his hands. A financially independent person is free from the clutches of time-for-money routine. 

Achieving Financial Freedom

To understand ''financial freedom'' one must come out of the traditional concepts regarding income and expenses.

We have been taught that timely work generates money. ''Financial freedom'' opposes this concept of time-for-money swap and lets the money work for the individual instead. However, in spite of this advantage many professionals find it difficult to work without a fixed routine.

Thus, to achieve financial freedom one needs to change their old mindsets and develop a new attitude towards earning money. One must realize that money is simply the means to achieve ends.

One must also remember that a person cannot be judged by the money he possesses. Unless these misconceptions are cleared the entire purpose of financial freedom is defeated since satisfaction is the keyword to financial freedom.

Similarly, one must also get rid of the negative attitude towards earning money. While excess demand for wealth hampers one's healthy relationship with finances, a healthy perception of money is necessary to maintain an over-all balance. Remember that one earns money to achieve ends and therefore, it is healthy and normal to earn money as long as one feels the ethical need to do so.

In the end, one may say that financial freedom is the state of mind which works towards development through a process of self liberation. 

Realities of Financial Independence

Independence is a state of being every living being strives to achieve, and keep forever. From the moment a child sets foot in school, he is made to understand that the knowledge he gains from this point onward is for him to make intelligent use of, to shape his own future.

When one lives with his parents, he tends to take a lot of things for granted. Once one starts to earn his own living he is faced with two diabolical aspects: financial independence; and responsibility.

It is not enough to just earn money. A lot of factors crop up when one (sometimes arrogantly) decides to break away from the family and move into his own home. True, that now he doesn’t have to think twice before buying that extra pair shoes; after all, there is no father waiting at home to glare upon the packet in hand.

But one does have to think about the electricity bill that is due next week, the phone bill which now seems to be of an astronomical level, the laundry that needs to be picked up and the EMI that needs to be paid. The money that has been earned after hours of toil seems to trickle down into oblivion.

In Economics, we learn that a country grows only through investment. And investment is the direct result of savings.

Similarly, in case of an individual, his financial state grows through saving. Parts of this saving can be invested in stocks and bonds. And since emergencies and accidents don’t come with trailers before them, security in terms of Medical and other insurances need to be made.

Women in India have, for the longest time, been financially dependent on the men: first as a daughter on her father, second as a wife on her husband, and then as a mother on her children.

Although this has saved them the worry of earning their own living, it has come with its share of hitches as well. A wife abused by her husband is unable to leave him and sustain herself. Even after divorce, she is at the mercy of her husband for child support. 

....To be continued

DELEGATION-GET THAT WORKLOAD OFF YOUR NECK

Delegating authority skills, tasks and the process of effective delegation

Delegation is one of the most important management skills. These logical rules and techniques will help you to delegate well (and will help you to help your manager when you are being delegated a task or new responsibility - delegation is a two-way process!). Good delegation saves you time, develops you people, grooms a successor, and motivates. Poor delegation will cause you frustration, demotivates and confuses the other person, and fails to achieve the task or purpose itself. So it's a management skill that's worth improving. Here are the simple steps to follow if you want to get delegation right, with different levels of delegation freedom that you can offer.

This delegation skills guide deals with general delegation principles and process, which is applicable to individuals and teams, or to specially formed groups of people for individual projects (including 'virtual teams').

Delegation is a very helpful aid for succession planning, personal development - and seeking and encouraging promotion. It's how we grow in the job - delegation enables us to gain experience to take on higher responsibilities.

Effective delegation is actually crucial for effective succession. For the successor, and for the manager too: the main task of a manager in a growing thriving organization is ultimately to develop a successor. When this happens everyone can move on to higher things. When it fails to happen the succession and progression becomes dependent on bringing in new people from outside.

Delegation can be used to develop your people and yourself - delegation is not just a management technique for freeing up the boss's time. Of course there is a right way to do it. These delegation tips and techniques are useful for bosses - and for anyone seeking or being given delegated responsibilities.

As a giver of delegated tasks you must ensure delegation happens properly. Just as significantly, as the recipient of delegated tasks you have the opportunity to 'manage upwards' and suggest improvements to the delegation process and understanding - especially if your boss could use the help.

Managing the way you receive and agree to do delegated tasks is one of the central skills of 'managing upwards'. Therefore while this page is essentially written from the manager's standpoint, the principles are just as useful for people being managed.

Delegation and SMART, or SMARTER

A simple delegation rule is the SMART acronym, or better still, SMARTER. It's a quick checklist for proper delegation. Delegated tasks must be:

·         Specific

·         Measurable

·         Agreed

·         Realistic

·         Time bound

·         Ethical

·         Recorded

Traditional interpretations of the SMARTER acronym use 'Exciting' or 'Enjoyable', however, although a high level of motivation often results when a person achieves and is given recognition for a particular delegated task, which in itself can be exciting and enjoyable, in truth, let's be honest, it is not always possible to ensure that all delegated work is truly 'exciting' or 'enjoyable' for the recipient. More importantly, the 'Ethical' aspect is fundamental to everything that we do, assuming you subscribe to such philosophy.

Below are:

The steps of successful delegation - step-by-step guide.

The levels of delegation freedom - choose which is most appropriate for any given situation.

The steps of successful delegation

1 Define the task

Confirm in your own mind that the task is suitable to be delegated. Does it meet the criteria for delegating?

2 Select the individual or team

What are your reasons for delegating to this person or team? What are they going to get out of it? What are you going to get out of it?

3 Assess ability and training needs

Is the other person or team of people capable of doing the task? Do they understand what needs to be done. If not, you can't delegate.

4 Explain the reasons

You must explain why the job or responsibility is being delegated. And why to that person or people? What is its importance and relevance? Where does it fit in the overall scheme of things?

5 State required results

What must be achieved? Clarify understanding by getting feedback from the other person. How will the task be measured? Make sure they know how you intend to decide that the job is being successfully done.

6 Consider resources required

Discuss and agree what is required to get the job done. Consider people, location, premises, equipment, money, materials, other related activities and services.

7 Agree deadlines

When must the job be finished? Or if an ongoing duty, when are the review dates? When are the reports due? And if the task is complex and has parts or stages, what are the priorities?

At this point you may need to confirm understanding with the other person of the previous points, getting ideas and interpretation. As well as showing you that the job can be done, this helps to reinforce commitment.

Methods of checking and controlling must be agreed with the other person. Failing to agree this in advance will cause this monitoring to seem like interference or lack of trust.

8 Support and communicate

Think about who else needs to know what's going on, and inform them. Involve the other person in considering this so they can see beyond the issue at hand. Do not leave the person to inform your own peers of their new responsibility. Warn the person about any awkward matters of politics or protocol. Inform your own boss if the task is important, and of sufficient profile.

9 Feedback on results

It is essential to let the person know how they are doing, and whether they have achieved their aims. If not, you must review with them why things did not go to plan, and deal with the problems. You must absorb the consequences of failure, and pass on the credit for success.

Levels of delegation

Delegation isn't just a matter of telling someone else what to do. There is a wide range of varying freedom that you can confer on the other person. The more experienced and reliable the other person is, then the more freedom you can give. The more critical the task then the more cautious you need to be about extending a lot of freedom, especially if your job or reputation depends on getting a good result. Take care to choose the most appropriate style for each situation. For each example the statements are simplified for clarity; in reality you would choose a less abrupt style of language, depending on the person and the relationship. At the very least, a "Please" and "Thank-you" would be included in the requests.

It's important also to ask the other person what level of authority they feel comfortable being given. Why guess? When you ask, you can find out for sure and agree this with the other person. Some people are confident; others less so. It's your responsibility to agree with them what level is most appropriate, so that the job is done effectively and with minimal unnecessary involvement from you. Involving the other person in agreeing the level of delegated freedom for any particular responsibility is an essential part of the 'contract' that you make with them.

These levels of delegation are not an exhaustive list. There are many more shades of grey between these black-and-white examples. Take time to discuss and adapt the agreements and 'contracts' that you make with people regarding delegated tasks, responsibility and freedom according to the situation.

Be creative in choosing levels of delegated responsibility, and always check with the other person that they are comfortable with your chosen level. People are generally capable of doing far more than you imagine.

The rate and extent of responsibility and freedom delegated to people is a fundamental driver of organizational growth and effectiveness, the growth and well-being of your people, and of your own development and advancement.

Levels of delegation - examples

These examples of different delegation levels progressively offer, encourage and enable more delegated freedom. Level 1 is the lowest level of delegated freedom (basically none). Level 10 is the highest level typically (and rarely) found in organizations.

1 "Wait to be told." or "Do exactly what I say." or "Follow these instructions precisely."

This is instruction. There is no delegated freedom at all.

2 "Look into this and tell me the situation. I'll decide."

This is asking for investigation and analysis but no recommendation. The person delegating retains responsibility for assessing options prior to making the decision.

3 "Look into this and tell me the situation. We'll decide together."

This is has a subtle important difference to the above. This level of delegation encourages and enables the analysis and decision to be a shared process, which can be very helpful in coaching and development.

4 "Tell me the situation and what help you need from me in assessing and handling it. Then we'll decide."

This is opens the possibility of greater freedom for analysis and decision-making, subject to both people agreeing this is appropriate. Again, this level is helpful in growing and defining coaching and development relationships.

5 "Give me your analysis of the situation (reasons, options, pros and cons) and recommendation. I'll let you know whether you can go ahead."

Asks for analysis and recommendation, but you will check the thinking before deciding.

6 "Decide and let me know your decision, and wait for my go-ahead before proceeding."

The other person is trusted to assess the situation and options and is probably competent enough to decide and implement too, but for reasons of task importance, or competence, or perhaps externally changing factors, the boss prefers to keep control of timing. This level of delegation can be frustrating for people if used too often or for too long, and in any event the reason for keeping people waiting, after they've inevitably invested time and effort, needs to be explained.

7 "Decide and let me know your decision, then go ahead unless I say not to."

Now the other person begins to control the action. The subtle increase in responsibility saves time. The default is now positive rather than negative. This is a very liberating change in delegated freedom, and incidentally one that can also be used very effectively when seeking responsibility from above or elsewhere in an organization, especially one which is strangled by indecision and bureaucracy. For example, "Here is my analysis and recommendation; I will proceed unless you tell me otherwise by (date)."

8 "Decide and take action - let me know what you did (and what happened)."

This delegation level, as with each increase up the scale, saves even more time. This level of delegation also enables a degree of follow-up by the manager as to the effectiveness of the delegated responsibility, which is necessary when people are being managed from a greater distance, or more 'hands-off'. The level also allows and invites positive feedback by the manager, which is helpful in coaching and development of course.

9 "Decide and take action. You need not check back with me."

The most freedom that you can give to another person when you still need to retain responsibility for the activity. A high level of confidence is necessary, and you would normally assess the quality of the activity after the event according to overall results, potentially weeks or months later. Feedback and review remain helpful and important, although the relationship is more likely one of mentoring, rather than coaching per se.

10 "Decide where action needs to be taken and manage the situation accordingly. It's your area of responsibility now."

The most freedom that you can give to the other person, and not generally used without formal change of a person's job role. It's the delegation of a strategic responsibility. This gives the other person responsibility for defining what changes projects, tasks, analysis and decisions are necessary for the management of a particular area of responsibility, as well as the task or project or change itself, and how the initiative or change is to be implemented and measured, etc. This amounts to delegating part of your job - not just a task or project. You'd use this utmost level of delegation (for example) when developing a successor, or as part of an intentional and agreed plan to devolve some of your job accountability in a formal sense.

Contracts - 'psychological contracts', 'emotional contracts'

Variously called 'contracts' or 'psychological contracts' or 'emotional contracts', these expressions describe the process of agreeing with the other person what they should do and the expectations linked to the responsibility. It all basically means the same, whatever you call it. The point is that people cannot actually be held responsible for something to which they've not agreed. The point is also that everyone is more committed to delivering a responsibility if they've been through the process of agreeing to do it. This implies that they might have some feelings about the expectations attached, such as time-scale, resources, budget, etc., even purpose and method. You must give the other person the opportunity to discuss, question and suggest issues concerning expectations attached to a delegated task. This is essential to the contracting process.

Certain general responsibilities of course are effectively agreed implicitly within people's job roles or job descriptions or employment contracts, but commonly particular tasks, projects, etc., that you need to delegate are not, in which case specific discussion must take place to establish proper agreement or 'contract' between you and the other person.