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Why you should aim for financial independence, even if you don't plan to retire early

Become financial independent

In order to attain financial independence, consider some of the below steps:

  • invest your money into different projects, stocks. activities: diversification is sometimes the safest key to success
  • do your research thoroughly before investing your money anywhere, to avoid unpleasant surprises
  • increase your income by finding side hustle or getting engaged in new projects
  • manage your income by cutting down unnecessary expenses
  • invest in real estate: rent or resell properties.

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Why you should aim for financial independence, even if you don't plan to retire early

Why you should aim for financial independence, even if you don't plan to retire early

https://thinksaveretire.com/financial-independence-without-retirement/

thinksaveretire.com

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Key Ideas

Financial Independence

Financial independence implies not having to worry about money anymore, but rather focus on what you want to do, in your free time and your passions.

However, being financially independent is not to be perceived as having an infinite amount of money, so you should not spend everything in one go.

Become financial independent

In order to attain financial independence, consider some of the below steps:

  • invest your money into different projects, stocks. activities: diversification is sometimes the safest key to success
  • do your research thoroughly before investing your money anywhere, to avoid unpleasant surprises
  • increase your income by finding side hustle or getting engaged in new projects
  • manage your income by cutting down unnecessary expenses
  • invest in real estate: rent or resell properties.

Attain financial independence earlier than later

In order to feel less stressed about your expenses, start doing the research on how to achieve financial independence now.

It will save you a lot of frustration that might emerge due to work while also making you feel more satisfied with your own life.

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SIMILAR ARTICLES & IDEAS:

Financial planning

 ...is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.

Try making a budget
  • Create a full inventory of expenses in front of you: Categorize them into fixed and variable; urgent and non-urgent; necessities and luxury; avoidable and unavoidable.
  • You can create a hierarchy of needs and decide which one’s to address first. It’s all about prioritizing. 
  • Accept that you have limited resources and unlimited wants. But you have to manage your resources. The sooner you accept this fact, the better you can control your impulses towards avoidable expenditures.
Maintain a personal balance sheet

It’s a statement wherein you can jot down your assets and liabilities.

  • Pull together your bank statements and other proofs of the liabilities
  • List down your assets like the bank balance, all investments, home value, and value of other assets.
  • Take a sum of all the assets to arrive at the total value of your assets.
  • List down your liabilities the (car loan, home loan, credit card balances etc.)
  • The sum of all the liabilities will show the value of the money you owe.
  • When you subtract the value of liabilities from assets, you get your Net Worth.

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What early retirement means
What early retirement means

Early retirement is not defined as when you stop working forever, but as having the freedom and flexibility that saving up enough money can give you if you want to leave a job.

...
How to retire early

A good early retirement strategy is built on maximizing three aspects: Income, expenses, and savings.

To build your early retirement strategy, you need to determine your retire early or financial independence (FI) number. It is the amount of money you need for work to become optional. Be aware that the number will (and should) change as you change, and your desired lifestyle evolves.

The money you need for early retirement

Based on a series of papers known as the Trinity Studies, you need to save 25-30 times your expected annual expenses to have enough money to last you for the rest of your life.

This multiple is based on the percentage of your investment growth that you would be able to withdraw per year. A safe early retirement withdrawal percentage is between 3%-4%.

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Financial Literacy
Financial Literacy

While kids and teens get to learn about a lot of stuff, most families and schools do not teach them how to manage their money. In some families, it is considered a taboo subject and many friends a...

In And Out

Most of us know how much we make, but we need to pay close attention to how much money is actually coming in post-tax, and how much is going out.

You can start by writing down your Starbucks, Uber, Amazon, and take-out expenses, along with your car insurance, utility bills, subscriptions and memberships. Slowly we can realize that many of these small expenses add up to huge figures.

Review And Analyse

By noting down all your expenses on pen and paper, or on the PC excel sheet, you can start to review and analyse your spendings on a weekly or monthly basis. This will make you find innovative ways to save money, catching hold of ‘runaway spending’ that went unnoticed before.

Example: You could find that the $5 Smoothie that you had every day, could cost much less if you made it at home.

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