The Ultimate Guide to Becoming Financially Independent
In 1776, America’s founding fathers declared their independence from British rule and thus started a centuries-long legacy of United States citizens striving for freedom. For many groups, this is a battle that’s yet to be won. However, individuals can work towards a particular type of independence that’s more accessible than most—the goal of financial independence.
Like other forms of independence, that of a financial sort implies that you aren’t financially beholden to another party. You don’t have debts to pay or an inherent need to work—you have the money you need to survive comfortably and live life on your own terms. In a nation saddled with unprecedented student loan debt and other fiscal responsibilities, it’s no surprise that such a concept would be alluring. Yet, as enticing an idea as it is, it remains nothing more than an intangible dream for a majority of people in the U.S. and across the globe. However, this isn’t because it’s always impossible—for many, it just takes a bit of hard work.
Handle your financial situation.
Assuming you haven’t slipped into financial independence through a serendipitous occurrence such as winning the lottery or gaining an unexpected inheritance, your finances will need to undergo an overhaul of some sort on your path to this dream. Before you can take steps in that direction, you have an important first step—understanding where your personal finances stand now and what it will take to move in the right direction.
A resource such as WealthRocket will be an invaluable tool in gaining a thorough understanding of banking, credit, investing, savings, and other key financial factors that can make or break your path to independence. If you can’t understand a concept, you can’t begin to improve the situation related to it—financial experts and educators can make that understanding happen more easily by putting the necessary information in a more accessible form.
Understand where you’d like to end up.
From your newfound knowledge of your current financial state, take some time to consider your ultimate goal. For this exercise, it’s not enough to simply define your ideal endpoint as “financial independence.” Instead, it’s important to go into detail as to what your unique version of financial independence would optimally look like.
Would you continue working despite having plenty of money? If not, how would you spend your time? Some people might turn to charity work while others might take up long-since-discarded hobbies. Still, others might spend their days doing something else entirely. Every person is unique and, as a result, so is their version of financial independence.
Create a game plan to reach that point.
Now, it’s time to get down to business—you have an idea of where you are now and where you want to end up, ideally. From here, you need to figure out what it will take to get to that point. Maybe you have to pay off six-figure student loan debt or a hefty mortgage. You might need to start saving for retirement more aggressively or diversify your investment portfolio.
Compare your spending over the last year to what you’d like it to look like in the future. Imagine how the rich people you’re hoping to emulate use their money. This is another part of the process where expert resources like Wealth Rocket will come in handy—by learning all that you have to accomplish, you’ll be better prepared to do so when new opportunities come your way.
Like any sort of freedom, financial independence doesn’t come without cost and effort. While you might not begin a nationwide rebellion to make it happen, you will have to craft a personal revolution to get to that point. However, like the US founding fathers, you’ll come out on the other side of your “war” with a newfound sense of liberty—and plenty of room for your personal pursuit of happiness.