The question I’m most often asked is not simply “how do I become financially independent?” but rather “how do I become financially independent as quickly as possible?”. Unfortunately, there is no one-size fits all answer to these questions. But I can help you determine the best course of action to find your version of financial independence…as long as you are truly committed to those actions you must take. This may not sound as easy as you think.
First of all, you’ve got to figure out what sort of life you want to live, both now and in the future. Many financial analysts tell you to scrimp and save now, so that you can retire in style. That’s bad advice. Why would you want to live in squalor now? Or live without enjoying the things that make you happy? I need to enjoy good food and travel. It brings my stress down and resets my battery. I can’t imagine living life without that, and I don’t think that you should either. Instead, create a plan that allows you to live the life you want now and continue it into your retirement.
Another piece of bad advice from pundits is to live debt free. Sure, that sounds great, but it can make your life harder than it needs to be. That sounds stupid to me. Why would you add more difficulties to your life just to say that you’re debt free? Get with the program and use debt to help you save more. Debt can free up cash flow so that you can use that cash for savings, investments, etc. Of course, don’t carry around high-interest debt. Pay that off quickly and then use that money to invest. But a lot of people get emotional around debt and this hurts their commitment to financial independence. Are you that person?
Protecting your independence means diversifying your investment portfolio. Another action is tax planning throughout the year. Have you surrounded yourself with a great CPA, insurance agent, banker, and attorney? Poor professionals can be a drag on your independence. Maybe you have to change jobs or careers? Just having just a 401k is never a bad idea, but it shouldn’t be the only one that gets you to financial independence and keeps you there.
For more tips on reaching financial independence and getting there quicker, visit tswealth.com.