Latest topics

How to achieve financial independence without early retirement

How to achieve financial independence without early retirement

How to achieve financial independence without early retirement

We all want to achieve financial independence but first you must know that the term "physical independence" is not the end or the ultimate goal, it is a financial concept that can help improve savings, reduce spending and create a financial safety net.

Financial independence is often associated with FIRE, which means financial independence and early retirement.

In this movement, participants save and invest in order to leave their jobs before the traditional retirement period.

But what if you do not want to quit? Well, you can still learn some good financial habits and achieve financial independence without retirement.

More specifically, achieving physical independence can protect individuals from unexpected layoffs, or give them the option of reducing working time and increasing family care time, among many other benefits.

How to achieve financial independence
"It's not necessarily about early retirement," said Sean Okumura, a certified financial planner and director of Transitions Wealth, in a statement to the press. "It's about financial options."

For example, to talk to Ocomura, financial independence can give its owners a chance to get rid of a high-paying, cumbersome job or to engage in counseling rather than full-time employment.

Base 25 times
Some analysts point out that financial freedom or physical autonomy occurs when the individual achieves a 25-fold rule.

A person's savings reach 25 times his annual spending, for example if you spend $ 50,000 a year, you will need $ 1.5 million in your retirement account to be financially independent.

The lower your annual expenses, the lower the amount you must reach until you achieve financial independence.

For other people, it is not a specific money figure. Roger Ma, a certified financial planner and founder of Lifeaidout in New York, said in a statement: "The goal should be to match your time and money with what you love and appreciate." This does not necessarily mean you need to assemble 25 times your annual spending to do what you want. "

Keep spending in mind
One way to approach financial independence is to improve your spending habits, where you can focus on spending money on things of value.

Achieving financial independence - spending
For some, access to financial independence may require sufficient funds to spend on what is important to them - such as travel, lessons, or exercises - with no spending on things that do not bring happiness, such as buying a car or mortgage.

Always think when you spend on this question, "Does this thing add value to me?"

If you're thinking of cutting back on spending to reach a level of financial independence, you have to track your spending to see which things are worth spending and which do not.

Before you make a permanent decision about your financial life you should first consider whether that amount of money will suffice you monthly, and perhaps even try to live that much money for six months to see if you can live with it or not.

Be flexible
To achieve financial independence you have to be flexible in your material transactions, where many experts point out that financial freedom must be a moving goal.

Changes in taxes, stock market, or unexpected illnesses may force you to change your financial plan, so be flexible.

Also keep in mind that physical independence may change for you as you age, which is fine.

The good thing that you can draw from these lines is that saving, investing and reducing objects of expenditure at an early time of your life can have a strong impact on your financial health in the future.


Offers today

Loading Offers..

Last News