Who doesn’t want to be financially independent?
Financial independence is a term generally used to describe the state of having sufficient personal wealth to live indefinitely without having to work actively for basic necessities. In the case of many individuals whose financial circumstances fit this description, their assets generate income that is greater than their expenses. To illustrate, a person’s quarterly expenses may total $4000. They receive dividends from stocks they’ve previously purchased totaling $5,000 quarterly, while also having an even more substantial amount of money in other assets. Under such circumstances, a person is financially independent. Source
I think it’s safe to say that most of us would love to be!
Many of us (including myself) strive to be completely financially independent before retiring, but the reality is most of us won’t be.
Here are the 7 best things you can do to become financially independent, according to Frugal Dad:
- Don’t buy what you don’t need. Or don’t buy crap. It’s easy to just buy things when we see them just because we want them, but if you can get into the habit of asking yourself if you really need it first, you’re on your way to financial independence.
- Pay off all your debt. Getting your debt paid off so you can use your money for what you want to is crucial to becoming finanically independent.
- Put a percentage of each paycheck into a savings account. Even if you can only afford a few dollars each paycheck, it all adds up.
- Don’t listen to the gurus who try to scare you into believing that you need 3 million dollars before you retire. Figure out your own number as far as what you think you’ll need to live comfortably during retirement.
- Don’t worry about impressing anyone. Who cares if your neighbor buys a new car every year? Your neighbor is probably in debt up to his eyeballs! It’s not necessary for you to have a big house, and a new car every year just to show that you too are successful. Who cares what others think?
- Make a few risky investments when you’re young. When you’re young you can afford to take a few risks.
- When you get close to being financially independent, then start being more conservative with your investments. This way, you won’t lose the money you’ve got squirreled away for retirement.
More Tips For Financial Independence
Find even more ways to save money and become finacially independent here:
Financial Independence: The Final Stage Of Money Management
Learning From The Millionnaire Next Door
FInancial Independence: It’s More Than Just A Number
8 Paths To Financial Independence
12 Tips Toward Financial Independence
Why I Follow Suze Orman’s Advice
