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If you want to be financially independent, you need to know what it means to be financially independent. It’s not that hard to turn your arm around. A simple operation definition will do the trick.
“If you’re debt free, have the financial headroom to sustain yourself for the long term, and have a lower stress level when managing your finances, you know you’re financially independent,” says Harris Financial Coaching. owner Annette Harris said. Jacksonville, Florida. “Financial independence is achieved when you are not dependent on your employer, income from your business, or financial assistance from outside sources.”
Why should I be financially independent?
Definitions alone are helpful, but they don’t always drive you towards your goals. It helps to know why you need to be financially independent.
Here, I want to paint a concrete picture of what life will be like after achieving financial freedom. This visualization focuses attention on the benefits of achieving this objective. It’s not a theory. It would be practical enough to imagine how it could be useful now.
Adam Garcia, CEO of The Stock Dork in Orlando, Fla., said, “Financial independence means being able to support the lifestyle you want and be financially independent without relying on other people’s financial help. It means having enough financial security and resources to reach your goals.” “This includes covering essential expenses such as housing, food, health care and education, as well as discretionary spending and future financial planning. People earn income through investments, savings or entrepreneurship. achieve financial independence, maintain the desired standard of living, and achieve long-term financial security by managing their finances responsibly, making informed decisions about spending, saving, and investing. and control are needed.”
The greatest benefit of financial independence is that you have control over the most important things in your life. You are not dependent on anyone. You are the master of your own domain.
“Being financially independent means having enough wealth and income-generating assets to meet your living expenses without relying on employment or financial assistance,” says California. Tyler Seeger, managing director of Retirement Being in Laguna Niguel, said. “It’s about having the freedom to choose how you live your life and how you spend your time without worrying about your next paycheck.”
Why is it difficult to become financially independent?
If it’s so attractive, why are so few people financially independent? The truth is, becoming financially independent is not easy. What could be so difficult?
It’s your daily routine. The future ideal of financial independence sounds good, but there is some comfort in the present, even if it is not in our best interests in the long run.
“Relying on outside income isn’t really financially independent,” says James Allen, founder of Bilpin in Los Angeles. “Why? Because you are still tied to someone or something to make a living. True financial independence means that your income is independent through your investments and businesses. It’s about being the master of your own financial destiny, not being a passenger on someone else’s ship.”
Being financially independent also requires working on some things and sacrificing others. Think of this as a battle to accumulate assets or eliminate debt. It’s never easy. Especially in a world of instant gratification.
“Financial independence means that you get income from your investments,” says Melissa Terry, CFACFA at VEM Tooling in Kenner, Louisiana. “These investments should cover expenses without the need for additional labor income. It also means being free from the burden of debt or having manageable debt that does not strain economic resources. To do.”
What steps can I take to become financially independent?
The good news is that there are decisive steps you can take to achieve financial independence. It starts by going back to the beginning of this article. What does financial independence mean to you?
I have a hint before answering. Don’t think like everyone else.
“For most people, financial independence means having enough money to avoid going to work every morning,” says V. Henry Asturjan, managing director of Waterstone Advisors LLC in Walpole, Massachusetts. I think there is something,” he said. “That’s true to some extent. But as people live longer, financial independence can also mean having a satisfying career that allows them to work productively until later in life. We are now in our 80s and 90s.” I’ve come to see people as astute as fiddles, still working, supporting themselves, and contributing meaningfully to others. I am completely independent.”
By letting your imagination run wild, you can frame your financial independence in the way that makes the most sense for you. Still, you’ll need your usual blocks and tackle to get there.
“One effective strategy for increasing your chances of financial independence is ‘combining regular and disciplined savings with wise investment,'” said Brandon Juodikis of BRJ Wealth Management in Chicago. says. “Setting aside a portion of your income for savings and investments on an ongoing basis will help you build wealth in the long run. Wealth accumulation is accelerated.This strategy allows your money to work for you and increases your chances of becoming financially independent in the future.”
Finally, don’t exceed your goals. Being financially independent doesn’t mean you have to be in the latest production. Lifestyle of the rich and famous. If you stop and think about it, pursuing a more frugal lifestyle certainly lowers the bar for achieving financial independence.
“If you live a wealthy but not extravagant lifestyle, you have enough wealth and stability to not worry about running out of money,” said Mark Cheng, founder and CEO of BillSmart in New York City. You can tell whether you are financially independent by whether or not you have the income you earn.” life. “
You don’t have to be restricted to sitting in a rocking chair and going back and forth to live a simple life. We are still allowed to have fun.
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