What Do You Get From Financial Independence?
We can talk all day long about money and numbers and savings accounts and budgets – but what matters in the end is what impact these things have on your life. Below you’ll see just a few of the best ways that financial independence can free up your life and allow you to focus on the things that truly matter to you.
Your health improves.
Stress kills. During my most stressful working days I developed chronic back pain, tendonitis in my elbow, and TMJ (jaw clenching, teeth grinding). My chronic back pain has long been cured since reading Dr. Sarno’s Healing Pack Pain Book nine years ago, however, it wasn’t until I became financially independent did my elbow and TMJ disappear! Our health is priceless. Every time I’m sick, I wish to give anything to feel better. We need to remind ourselves how important our health is when we are healthy because it’s easy to take it for granted when we are young.
You hang out with people because you want to, not because you need to.
There are times when you need to go spend time with someone you may not particularly like because you’d like their business or need their recommendation. When you’re financially independent, you almost only hang out with people because you enjoy their company first. They might end up being a great connection down the road, but that’s because you guys become great friends.
You gain even more confidence.
So much of succeeding in anything has to do with confidence. At least once a week, I play tennis with the president of one of the largest mutual fund companies in the world. So many people want his attention, but can’t get it because he’s a busy man. He’s also quite intimidating to anybody in the finance world. But, I talk smack to him all the time because we’re friends, competitors, and I don’t rely on him for anything. I belong on the court just as much as him. When you feel confident you belong, good things start happening because the belief in yourself pulls you forward.
You become even less afraid to fail.
So many of my projects have flopped, I don’t know where to begin. I try to learn from each mistake so that one day, I might create something successful. Trying is scary for the only reason that failure is embarrassing or financially disastrous. However, if you have the financial means to withstand disappointment, then you become less and less afraid to fail to the point where you start succeeding more and more. Just imagine a world where none of your investments would ever lose money. You’d be willing to take huge risks. Just don’t over leverage yourself!
You care less about what other people think.
Caring less about what people think is Yin to the Yang of standing up for what’s right. It feels liberating to have insults and insinuations roll off your back. There’s less desire to try and get even or one up your dissenter because you’re already set. Insults are usually hurled by unsettled people who want what you have. They are insecure and hope to bring you down to their level so they can feel better about themselves. Showing neutrality or even compassion is the preferred method of action. You actually start enjoying people talking bad behind your back or attacking you because it just shows how good you have it. It’s a pretty interesting phenomena!
– via www.financialsamurai.com
How To Get There
So you know that you want financial independence. You can see the ways it would impact your life and you’re ready for the freedom and adventure that money security brings. What now?
Now it’s about creating a plan of action to get there. These tips are just a few ways to get on the path to financial independence and start creating the life you really want!
Keep Breathing Room in your Budget
No matter what your paycheck says, if every bit of that money is allocated to paying someone else, you will never feel rich. Only you can decide what percent of your paycheck you want to live on, but I don’t recommend pushing it to 100%. Keep your expenses down to a level where you aren’t strapped every month. You can have the most amazing home, car, and high-paying job, and still be stressed out and unable to pay your bills. Live within your means and save the rest of your income to build up your long-term economic equity.
Avoid Debt, Unless It Makes You Money
While no debt is necessarily embraceable, there are a few scenarios where debt is often necessary. Education loans eventually pay you back much bigger dividends in higher earning potential over the rest of your life. The same goes for real estate. Rather than tie up all of your money by paying off one house, you can use the same amount to put down a deposit to purchase five homes or businesses that you can rehab or rent at a profit, while paying off the remaining loan amount with money from the rent or sale. If the profit gained by utilizing the bank’s money is greater than the interest you are paying to use the money, you come out ahead. You can also utilize credit cards to build up your credit line and get points to reduce other expenses like airline travel. Just make sure you can always pay them off at the end of the month so you don’t waste money on interest.
Revisit the Time = Money Concept
Most people understand the thought process that when they give their time, they get a certain amount of money back. Unfortunately, there is a limit to this, as there is a limit to how much time you can give. The financially free people often learn to create multiple streams of income and get mailbox money. Think about someone who owns real estate. They do not put any time or effort into your rent check, they just collect the mailbox money every month for allowing you to live there. Or, think about when someone creates a new invention or writes a book. Even if they sell the product to others to market, if they are smart they will set up the contract to continue to collect royalties for the life of the invention. This is mailbox money. After the initial work launching or selling the product, they simply sit back and collect the checks.
When you realize that you can make money beyond the typical hourly rate, your financial horizons expand exponentially. Most people feel intimidated by this initially. After all, this can push people outside of their comfort zone. But, this is where the truly rich play. They are no different than anyone else, they just learned to invest their time in educating themselves in these concepts.
– via Lifehack
Are you ready for financial independence? What steps are you taking to set yourself up for success?