Are you happy with your work/life balance? Most of us need a steady job to fund our lifestyle, and it takes a constant stream of money to make that possible. Why not just be independently wealthy?
Easier said than done, but it’s not impossible. People always do it, and they look just like you and me. The difference is what they do with their 24 hrs. Do you want that type of life? Let’s go over some methods you can implement to become independently wealthy.
1. Decide What Lifestyle Level You Want
Being independently wealthy isn’t a certain level of income or the number of toys you have. It is more of a shift in how you can spend your time. It can mean something different to each individual, but at its basic, wealth independence is not needing financial support from anyone or income from a job because you have enough money to support yourself.
The amount of wealth varies greatly, and it all depends on the lifestyle you want to live. You can be happy in a comfortable home with no debt and the finances to do whatever you like. Maybe you want to have a fleet of exotic cars and your private island while having more money than you know what to do with.
Both situations are independent of wealth, but the amount of cash needed is vastly different. To be independently wealthy, you need to figure out what that means and set it as your goal.
2. Life Below Your Means
Regardless of income level, to live independently of outside support, you need to run out of months before you run out of money. This method has a two-fold advantage. First, you are training yourself to live on less than you bring in.
This mindset will keep you independent, no matter how much you make. Second, the excess money left over can be put to work, making more money. You want passive income, and that takes upfront capital. Beyond that, you can tuck away the extra to upgrade your lifestyle later.
People think independently that wealthy individuals are only those in designer clothes and luxury homes. You can also have that lifestyle freedom on a smaller scale, without all the bling. The key is to make sure you don’t spend more than you bring in, or you will accumulate debt that has to be paid off.
3. Use a Monthly Budget
Keeping track of your finances is a struggle many people have and keeps them in chains to the system. The financially independent are disciplined and track their money to a tee. Having total control over your money means there is always enough to pay for your lifestyle, and you track this through a comprehensive budget.
Do you think a budget is only for the frugal? Think again. Wealthy people use monthly budgets, which is a major reason they have independence. By tracking your spending and income sources, you can manage finances in a way that gives you total freedom. Using the budget, you can make crucial financial goals. Perhaps it’s best to refinance mortgage, open a savings account, or do other activities that will maximize your budget.
4. Prioritize Saving
To gain this independence, you need to have money on hand to fund your life and beyond. You may have multiple income streams but must hold onto them through a savings plan to truly be free.
Make putting away money a priority by paying yourself first. Using your budget, you know what you need to fund your life but first, take some right off the top. This is not to save up for a big purchase but to give you freedom down the road. This will also act as an emergency fund if you need it.
Once you pay yourself, work to pay off all your debts; the rest is for fixed expenses. You will reach a tipping point when you have enough saved to justify leaving your job and attaining that freedom.
5. Work Hard and Smart
Unless you have inherited enough money to be free, you need to earn it. Today there are many opportunities to make a lasting income that will keep coming in passively. Besides a regular job or career, you can start a side hustle to augment your cash flow.
Figure out what your talent is and monetize that if you can. Take the money you earn and invest it to get income and dividends and create something that pays you long-term, like writing a book, building a social media enterprise or even real estate income. Work hard now so you can gain that independence later.
Becoming independently wealthy is not an end goal but a way of life. The secret is to build enough wealth to sustain your lifestyle and maintain it long-term. Use these methods to become independently wealthy, and then you can enjoy the freedom that your life has become.