What is Financial Independence?

For some, financial independence is a dream, while for others it is an eventual goal. But, what is financial independence? In a nutshell, financial independence means having enough wealth to no longer need to work on the terms of others or toil away as a wage slave.

Financial independence doesn’t necessarily require a full retirement from work. It can mean retirement, semi-retirement, or maintaining meaningful full-time work. It is less important how much you are working, and more important how you feel about the work you are doing. And, it’s a nice feeling to know you are working a job because you want to, and not because you have to.

Some people view financial independence as merely a dream, and as such they never take meaningful action to achieve it. Others recognize financial independence is the result of developing and then following a strategy with regards to spending, saving, and investing. Financial independence is the result of deliberate actions, not simply luck. Many working people can achieve financial independence with the right knowledge on how to do so.

The road to financial independence is a long, yet predictable one. The first step is establishing an emergency fund. The second step is to begin making prudent investments. The third step is to allow enough time to pass for your investments to grow and begin generating significant passive income. There is no better income than that which you do not have to work for.

The goal can seem a very distant one, especially if you currently have no savings at all. In this case, you need to begin by analyzing your current spending and findings opportunities for savings. A financial coach may be helpful in conducting an analysis of your spending habits, helping to develop a budget, and providing support as you adopt new behaviors to achieve your goals. The first step in saving for the future may be as simple as giving up a daily cup of store-bought coffee. Taking on a side hustle is a way to provide an additional income stream to speed up your progress.

Financial independence is not easy, but it is attainable with the right motivation and discipline. A journey must begin with the first step, and it is never too late to start moving towards financial independence, even if you have made mistakes with money in the past.

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    • mindyour2cents

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