What if you could never work again and live like a King/Queen, what would you say?
YES definitely YES!
What’s financial independence?
The definition of financial independence is basically that. It’s the state of having enough incomes to cover your expenses without working again. So at this point working is something that you decide. For example let’s take the family A. The family A has managed over the past 15 years to save 10% of their wages every months. They didn’t decide to spend what they earned in expensive cars of holidays, they made the choice to invest in a new house as well as stocks. They rent the house for $1300 and their stocks give them $2000. The total of $3500 covers the loan for their house, for their car and for the basic needs like food and clothing. So by having their money working for them, they don’t have to work again if they don’t want to.
The important aspect of financial independence is investment. When people earn money they either spend it in things they can’t afford or just put it in their bank account. Very few people actually save money to invest afterwards. They find it too risky. But let me ask you a question, is it more risky to buy a new car or invest in stocks? If you know what you’re doing stocks are far less risky that the new car. Why? Because once you bought your new car its value systematically decrease by 20%. Actually most people don’t care, they want the last brand new car just to feel rich even if they are really not.
The good point about financial independence is not about money, it’s about the freedom you can get with it. Many people say they want to be rich but they often ignore the time factor. Some people are rich but are poor in time. They work every week 90 hours, they make the sacrifice of time to get the money they crave for. In this case you can’t say you’re really free. Here is a real example, I know a man who works in a very well know international organisation and make $10,000. He has a huge house with 2 big cars. The good life you would say? Absolutely not, that man works 85 hours a week and got so much into debts that he got depressive. If he had the good mindset he could have x3 his income in a short period of time by investing and never work again.
With financial independence you get both money and time and that’s the best of it. You can spend time with your family, friends, throw yourself into your passion, going in holidays…because let’s not forget, time is something that even the wealthiest man on this planet can’t buy.
How do we get there?
If you are reading this article it means that you have some kind of interest of becoming financially independent. The first thing you have to do, before starting any strategy, is getting the good mindset. Mindset is certainly far more important than startegies. To get the right mindset you should take a look at the following video of Brian Tracy and the four D’s.