Introduction
Financial independence refers to having adequate income or wealth to cover the cost of living a life without employment or dependence on others. It is a point where you do not need to work because you have generated enough income to do what you love in life and earn a living.
Now, what is Passive income? Remuneration earned without working for work is referred to as passive income.
But in reality, financial independence may mean different things to different people with the same basic premise that it is a situation in which one can afford at least the necessities without relying on someone under all the living conditions of life.
Financial independence can be very different from me, you, the CEO of a large company, or someone deep in debt. We all have different needs.
There are various methods for achieving financial independence with advantages and disadvantages. Individuals willing to gain financial autonomy may find it helpful to have a financial plan and budget. So having a clear idea of their current income and expenses will enable them to identify and select appropriate strategies to advance financial goals. The financial plan addresses all aspects of a person’s finances.
Why is Financial Independence important?
An important factor in financial independence is paying attention to your spending habits. Spending money on unnecessary items is one of the biggest obstacles to pursuing and gaining financial independence.
Job InSecurity
Financial risk is often the catalyst for entrepreneurs. Many entrepreneurs work unrealistic hours, risking their entire life to save, and neglect essential dream relationships without the promise of success.
The unfortunate reality is that job security no longer exists. A few years ago, the most helpful thing one could do was to stay focused on the job so that one day you could have adequate money for early retirement.
However, one can lose the job at any time, which is not always an individual’s fault. In that scenario, the company you work for may shut down, leaving you without a job.
Pursuing financial independence indicates that you will need to find additional ways to earn extra money. Whether you are busy on the positive side, getting a second job (if you have the time to do so), or investing wisely, pursuing financial independence will provide you with a safety net that not all employees can offer.
More Freedom
If you are financially independent, there are a lot of doors that can open for you. Of course, you do not have to know what you want to do once you have achieved financial independence exactly, but once you are there, you will have the freedom to do what you want or need to do without worrying about income.
Here are some things you can do if you are financially independent:
- Buy a house sooner than you expected
- Take time to spend with and care for your loved one
- Go to a new city or town to get a fresh start
- Go to all the places you dream of, whether local, international, or both
- Start a new hobby
- Take a low-paying job or a more comfortable position
- Reduce your working hours to find a balance
- Donate time and money to your favorite organization
Dealing with Emergencies
Financial independence does not just require hard work. It also requires careful planning, budget planning, savings, and otherwise financial decisions.
When you decide to pursue financial independence, you should be prepared for several changes, especially how you manage your finances.
An emergency can come at any time in your life. It may be illness, injury, loss of income, car problems, or the need to provide materially for a needy family member. Either way, if you work hard for your money, you prepare for the unexpected.
No Longer Trapped in the “Rat Race”
Sometimes there is a blatant contempt for work today. Congratulations to the early retirees. However, I have concluded that leaving the “rat race” makes me happier than the idea of retiring.
A financially free person has knowledge and goals that are not degraded by making a living. One can pursue opportunities that are often considered dangerous but very rewarding. And can manage time in ways that those trapped in nine to five jobs.
Reevaluate Your Priorities and Learn New Skills
To achieve financial independence, one will need to reevaluate priorities. It is never a bad thing, although it often means sacrificing some of the things you enjoy right now.
To accomplish this, one will need to establish “why.” For example, do you want to be financially independent to give up your 9-5 and enjoy life while you can? Want to be able to retire earlier than the average person? Want to be able to buy the home of your dreams? Financial independence signifies different things to different individuals, and finding out what it means to you is the foremost step in aligning your actions with your goals.
There may be something that you have always dreamed of doing, which may mean that you have to learn a new skill. Having as many skills as possible under your belt opens up more opportunities to earn an income and maybe something you enjoy if you are lucky. By learning a new skill or occupation, you can use your free time to do something enjoyable and start using your new skills to earn extra money.
Conclusion
Not only is financial independence and the creation of extraordinary wealth an admirable goal, but you can also achieve them. Consider that when you are full of opportunities to leave your budget to buy something that does not conform to your standards. Let us Assume you were transposed into the karmic-driven world of Earl. Most millionaires regularly invest at least 15% of their income despite attractive sales and dynamic economic conditions. Follow that example when faced with difficult financial decisions; choose freedom today.
I hope this article was informative and useful
Thank you for reading
Sukhpreet Kaur
