You are financially independent when your property generates enough income for you to have leftover money at the end of each month. How long can you keep up your standard of living without earning another paycheck? Achieving this goal takes determination, stamina and a little bit of luck.
Make it your priority
Just like any goal, if you want to become financial independent, you need to keep this goal top of mind. Look at every financial decision in terms of how it will contribute to your goal. Financial decisions are not just whether to go on vacation. These decisions include whether to buy premium or store brand ice cream.
Take the time to learn all you can about growing your money. This is not just investing. It includes your college major, your choice of careers and your choice of where to live.
If you are not self-employed, work where your employer will match your retirement contributions. Never turn down free money. Know what it takes to keep your job. If you don’t have a job, look at every possibility to get gainful employment. Mow lawns if you have to. Your luck will turn around if you never give up and you keep focused on your goal.
Marry the right person. I am not talking about marrying a rich person. I am talking about marrying someone who will give you the kind of support that helps you attain your financial goals. An unhappy marriage drains you both emotionally and financially.
Cut costs everywhere
Along with making it your priority, constantly look for ways to spend less. Can you get along without a car? Can you car pool? Can you live in less expensive housing? Can you take your lunch to work? Can you consistently choose the cheapest item on the menu? You need to do these things if you intend to achieve the goal of financial independence.
Save and do not touch that savings
Put 20% of your income into savings. This is the part you do not touch. You will additionally need an emergency fund for things like illness, car repairs and appliance repairs. Be very serious about never ever touching this savings. While you are building up your savings, everything you can about how to invest and how to keep your taxes down to a minimum. Then, when you have reached a point where you have enough to take advantage of investment opportunities, you will be ready to invest and grow your money so that it generates enough income that you will have extra money leftover at the end of each month.