In order to be ‘financially independent,” that essentially means different things to different people. Some people believe it means you don’t have to rely and your parents anymore to help pay your rent or cover some your food expenses. In reality, though, true financial independence basically refers to being able to live on your own without a full-time job.
That doesn’t mean you don’t have to work. It simply means you have built up enough savings, wealth, and even a small business that can support you so that you don’t have to rely on an employer of any kind. When you are financially independent, many things become much easier to deal with. You won’t need to get a bank loan to make ends meet, you won’t have to worry about getting laid off, and you can focus on planning for your retirement and enjoying life as much as possible.
Here are six ways to begin building your own financial independence.
Take an honest assessment of your current position in life.
If you haven’t been sound with your money management yet, it is time to take care of that now. If you are in debt, are beholden to your job, or have other financial limitations, you need to address these openly and honestly with yourself.
Become extremely disciplined with your money.
If you live beyond your means, focus on chasing materialism to keep up with your next-door neighbor or other family members, or have a tendency to spend far too much on entertainment or items that are not really necessary for you to live and live comfortably, you’re not being disciplined with your money.
Know the best ways to preserve your building wealth.
When you begin on the path to financial independence, you will be building wealth. Saving is fine, but investing makes a significant difference and can allow you to achieve financial independence much more quickly in the future.
Invest in your debt.
A lot of people think getting money into a savings account or putting it into stocks, bonds, or other investments is far more important than paying down debt. In reality, your debt could be costing you far more than you’ll gain back on your investment returns.
Instead of investing your money, just set aside a small amount in a savings account for an emergency, such as $1,000, and then put everything else into paying down your debt. When you pay down those high interest loans, you’re actually saving more in the long run.
Build your own business.
If you’re tired of working for an employer and always worrying about when the next layoffs will occur, establish your own business. Make sure you do something you’re passionate about. If you don’t have passion for something you build on your own, it’s going to be difficult to stick with it when times get tough.
That doesn’t mean times are going to get tough, but it can during the earliest stages of building your own business.
Don’t accept failure.
You can find numerous stories about entrepreneurs and others who rejected failure and overcame significant failures in their life. Understand there will be setbacks. Don’t let it get you down. As long as you stay positive and focus on your short and long-term goals, you can always make adjustments, but you will achieve them with the right discipline.