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Introduction
What would you do if you didn’t have to worry about money? Would you continue to go to work or would you do your own thing? It’s too bad that most people don’t know about financial freedom. Financial independence often means different things to different people and it can be difficult to measure progress on this journey. Ultimately, “retirement” is a loaded word, “financial independence” is essentially the same idea however it still offers you the ability to work if you so require, but importantly on your own terms.
Things to consider
– Visualize first, then plan: Anyone’s vision of financial independence can probably use a reality check. The path to financial independence may be considerably different at age 20 than it is at age 50.
– Budget: Tracking your finances effectively starts with budgeting – the process of measuring income, subtracting expenses and deciding how to divert the difference to your goals.
– Spend less than you earn: Most of us have certainly heard this rule, but it remains one of the toughest financial behaviors to execute. One rule of thumb is to put between 10-15 percent of your gross income in savings or investments every week.
– Downsize: Whether you are age 20 or 50, financial independence requires a personal evaluation of what money, property and items you will need to live happily and securely. It might also help to stop any “Keeping up with the Joneses” you’ve done in the past that’s unduly influenced your spending.
– Always know where you are financially: Financial planning isn’t about making one set of financial decisions and assuming you’re set. Lives and situations change and your financial planning must be flexible enough to withstand both positive and negative changes without derailing your hopes for financial independence.
Summary
People can choose to define financial independence in their own way, not everyone wants a private jet and a mansion. However reaching real financial independence, the ability to live comfortably off one’s savings and investments with no debt whatsoever could be easier than you think. It takes a plan, however everybody many people have the ability to reach this goal.
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Additional Information Resources
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