What are your thoughts on financial independence? Perhaps you could see it as a means to living free from financial burdens. Is it possible to enjoy financial freedom?
Financial independence is an achievable goal if you are determined and disciplined enough to pay the price.
One strategy used by the rich to become wealthy is to make money while asleep. Although, this is possible when there’s a proper plan and consistency in place.
Personal finance goals help to achieve absolute financial freedom. This article aims at setting you on a course to achieve financial freedom.
In the next session, we’ll look at the meaning of financial independence.
What Is Financial Independence?
Financial independence means the ability to do whatever you want, at your convenience, without being bothered about the financial implications.
In other words, you are not indebted to anyone at all. There are no car or student loans, no interest payment, no credit card bills. You are free from debts.
Financial independence also means you have an independent stream of income that can sustain you for a lifetime. Your income flows from assets you’ve acquired rather than a paycheck.
Investing a small amount of money can grow into a fortune if you are consistent. In this case, as a passive income earner, the interest your investment generates is higher than your streamlined income.
For instance, if you earn $5,000 monthly and decide to invest 20% of your income towards retirement, you could retire with over $1,219,971.
Importance of Financial Independence
The importance of financial independence is numerous because absolute financial freedom is the ultimate goal for many.
1. Freedom of Time
Financial independence can give you the luxury of time to do what you want when you want. No boss is waiting for you at work, no running around to meet up with deadlines, and no alarm clock to wake you up for work every morning.
You get to choose what to do with your time. You can go on vacation, sightseeing, and spend time with those who matter most to you. Financial independence helps you experience a level of flexibility, unlike someone who’s got a paid job and a boss that looks over his shoulder.
When you have enough time to yourself, you tend to achieve more personal or cooperative goals.
2. Freedom of Choices
By freedom of choices, I mean you are solely responsible for the decisions you make. You call the shots here. Financial independence gives you the ability to make choices because no financial obligations are weighing you down, neither are there calendar restrictions.
So you don’t feel like you’re under the control of your creditor or employer. You’re in control of your decisions at all times.
3. Readily Available
If you’ve always been a 9-5 worker, Monday-Friday plus weekend jobs, this is a transition for you. When you’re financially independent, it gives you the freedom to be available for people you love.
For instance, If you receive an emergency call from a friend who requires your presence in another state, you could immediately hop on a plane.
You don’t need to ask permission from your boss or anyone because you have the money and time to avail yourself irrespective of the time and location.
How To Achieve Your FI Number FASTER?
Your financial independence number keeps you on course and helps you get one step closer to attain absolute financial freedom. In this section, you’ll learn how to achieve your FI faster, using five simple steps.
1. Get Your Money Under Control
How you spend your money regularly should be in constant review. You cannot desire absolute financial freedom without being financially accountable.
Monitor all your expenditures. Your income should be greater than your expenditures. In other words, what you spend shouldn’t be more than what you earn. Get your money under control. Be a wise spender and saver.
2. Stop The Money Leaks
Next, there may be daily habits that you have that seem small, but over time chip away at a large chunk of your money. For instance, a daily Starbucks coffee, or Amazon one-click buys, or auto-payments you set up ages ago and completely forgot about.
Here’s what to do; make a comprehensive list of where your money goes, then identify the leaks and discipline yourself to stop them at all costs, especially if they are not necessary.
3. Strategize Your Personal Spending
Building financial independence is a long-term play. The decisions you make today will ascertain the kind of life you’ll have in the next twenty years from now.
So let’s ensure you’re making the right decision towards achieving absolute financial freedom. Firstly, set personal goals for your financial future. It could be short-term or long-term goals.
You can decide to save and invest a certain percentage of your income. Set a structure on how to pay your bills and avoid debts. Whatever strategy you put in place, be disciplined enough to stick to it.
High achieving people set goals in every area of their lives. If you’ve never set personal finance goals before, now’s the time to start.
4. Amplify Your Income
Achieving your F.I.R.E. Number is when you have a plan in place. One way you can amplify your FI is by creating multiple streams of income, ideally passive income.
Passive income is where you work a little upfront first, then set your asset up to earn you income automatically.
Now if you’re an employee, you could consider asking your boss for a raise. But not that typically a raise is a 1-3% income increase. While changing jobs entirely could lead to a 15-20% pay bump.
But if you’re not interested in changing careers, think of other ways to make money and achieve financial freedom. For example; consider leveraging your expertise online.
Like to learning how to leverage your expertise online by getting paid to create a digital course business. *learn more about how to amplify your income here
5. Leverage The Compound Effect
Having amplified your income, you can take one more step to increase your FI, according to Albert Einstein, one of the wonders of the world is compound interest.
The interest of your interest is called compound interest. If you have a plan to retire early, then you should leverage on compound interest.
It entails reinvesting your profits and the profits afterward for some time until it comes to a desirable amount.
However, don’t forget the potential risks in the investments. The compound effect requires focused consistent effort and the occasional sacrifice.
6. Surround Yourself with Wealth Builders
We become like the top 5 people we surround ourselves both in person and virtually.
If you’re ready to get serious about creating lifestyle and financial freedom, consider joining our community of wealth builders inside of the Legacy Leaders Academy.
Visit: BecomeALegacyLeader.com today! There’s zero commitment, cancel anytime and 100% of your monthly community dues are donated to charities that help families thrive.
You are responsible for your personal finances, financial decisions, as well as your plan of attaining absolute financial independence.
There are ways of achieving your FIRE number faster but remember it’s not a get-rich-quick scheme. As such, you need to be disciplined enough to create a plan, re-work the plan and see your plan through until you achieve your goal.
You can have that dream house of yours, that dream car, and above all, have the most beautiful you’ve ever imagined. It starts with a decision to get there, so decide what you want and what you’re willing to do to get there now.
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