Financial independence is not out of anybody’s reach. It doesn’t rely on big, fat wages from executive, well-paying jobs to create. Anybody from any walk of life with any income can become financially independent.
No matter who you are or how much you earn, becoming financially independent takes planning and commitment and involves certain measures. Here is a 5-step plan that anybody striving for financial independence should put in place:
Pay off debt
You will never become financially independent as long as you owe money. Your debts will own you and control how your money is used. You need to turn this around. Make a plan to pay off your debts as soon and as quickly as you can in order to regain complete control of your finances. Once you have total governance of your own money you can begin your journey to personal independence.
Set your goal
In order to work out how much you money you will need to create a life of financial independence you first need to ascertain the kind of life you want to live. Do you want a huge manor house in the country with vintage cars on the sweeping driveway, or is a life of self-sufficiency, rearing animals and growing veg calling instead? Do you want to travel around the world in a motor home or visit a 5-star hotel in every country? Different lifestyles require different budgets. Once you have worked out what you want to be doing with your financially independent life, you can work on creating the life you want and the money you will need to do it.
Spend less than you make
It’s so simple but it’s true. Or as Charles Dickens put it:
“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”
Create passive income streams
There are so many reasons to create passive income streams that they deserve a post of their own. After all, who would say no to a residual income and money for nothing?
Save and invest
You don’t need to spend every penny you make. In fact, for financial independence you need to ensure you develop a habit of saving and investing in order to watch your money grow. The earlier you begin and the more you save, the more the magic of compound interest will work in your favour.
Would you add any more steps to the route to financial independence? Share your thought with us.