Declare Your Financial Independence
Too many of us get overwhelmed when it comes to money management, which leads us to do nothing at all. We all want to become financially independent at some point in our lives, but very few of us get there. Financial independence is attainable with the right plan and commitment. There are many strategies that you can employ. Your understanding and application of the following principles will help guide you through your financial independence plan.
Power Over Your Money
Power over your money does not mean having no debt or being extremely wealthy. Rather it’s knowing you have the strength and knowledge in how you spend and save your money. You should know what you spend your money on and where. You can't manage what you don't measure.
Income Is Not Wealth
We think that if we work harder, smarter, longer, we’ll achieve our financial dreams, but our paycheck alone no matter how big, isn’t the answer. Having a high income alone does not equal financial independence. The level of your wealth should be measured by the length of time you could maintain your standard of living without an additional paycheck. If you were to stop working right now how long how long would you be able to keep up with your current lifestyle?
Live below your means, but within your needs.
Throughout our lives we are in a perpetual state of change. Our needs and wants are constantly altering along with our income and standard of living. The single most important step anyone must take to become financially independent is to commit to living within his or her means. As cliche as it is, it’s the reality of money. When you live below your means you will always have money you can put toward long term goals, such as retirement. Moreover, by living within your means you are effectively reducing the lifestyle you will need to support in retirement.
An important stage of financial independence is to become financially solvent. Financial Solvency is the ability to pay off your obligations. The goal is to get your income to a point where it’s equal to or greater than your expenses.
The journey to financial independence is long, but you can get there sooner than you think. Make financial independence your goal and start working on it immediately.