In Part 1 of “Will You Ever Become Financially Independent?” , we promised to explore steps you can take to lead you to financial independence in as little as 5 years, so let’s take a look…
Find an inexpensive place to live. If you are truly set on becoming financially independent, a chance or down-size in the place you live can help immensely.
Control your spending. Reduce as many non-essential living expenses as possible. Get rid of your cell phone, use a pre-paid phone. Buy generic foods whenever possible… and eat at home as opposed to dining out. Dump the cable and any other reoccurring luxury expenses.
Reduce your expenses to less than 25% of your income… impossible? Not really, but it has to be your goal, your mission in life, to achieve financial independence!
If you were able save 75% of your income (after-tax), and earn in the neighborhood of 8% a year on that savings… for 5 years, you would accumulate enough to maintain your standard of living for an indefinite period by withdrawing a supportable income of 4% a year from those savings.
Be diligent about how you spend and invest your money. Get the proper education in whatever you decide to do with your money. There is no guarantee that you will become financially independent through investments, but it is probably one of your best opportunities.