Financial independence means that you have enough money or revenue streams that you never have to work again, except for the joy of it.
First, realize that anyone (yes, that means you!) can play this financial independence game.
Second, decide how much money you really need to be financially independent.
Most people tend to overestimate and think in terms of millions. If you lived very simply, you could live on the interest of $250,000. If you think this idea is crazy, read the book, Your Money or Your Life by Joe Dominguez and Vicki Robin. It will help you shift your thinking. One client figured out that if she and her husband saved $2,000 per month for 15 years they would be able to retire and live off an annual interest income of $30,000.
Let’s assume $250,000 is your figure for minimal financial independence. How will you get there?
If you created a way to save or earn an extra $100 a day, you’d be there in 10 years. You could start a sideline business, moonlight, get more education or training for a higher paying job. Or you could cut your expenses by 50% and invest the savings. This is not rocket science. Consistent savings over time adds up. Even if all you can save is $10 a day, start playing the game.
Most people get fixated on making more money. However it is actually much faster and easier to simply cut your expenses. Don’t get trapped into thinking that downsizing means suffering. Reducing your costs by simplifying your life often improves your quality of life. (I love Elaine St. James’ book, Simplify Your Life for 100 ideas on how to simplify painlessly.)
You will start to reap the rewards immediately.
Just knowing you are taking consistent action toward your goal will dramatically reduce the stress and anxiety you may have over money. You will become more attractive and draw more good things into your life. You have nothing to lose, and everything to gain, by playing this game.
For more advice on creating financial freedom speak to one of our Accredited Life Coaches to start creating true wealth in every area of your life.
Success Story—Financial Freedom is Possible
For this life coaching tip, I thought I’d include this wonderful success story I received from a reader of Coach Yourself to Success. So often we think we need to have a million dollars or more in the bank before we can retire. If you sit down with a financial planner, you might get staggering numbers. Here is a great example of how you can “retire” early with a whole lot less than a million o. It all depends on where and how you live. Many people could free themselves up by trading in their lifestyle for a real life they love. That is true wealth!
“I first read your book many years ago and found that it really stood out from other life coaching books. It made me so excited and inspired that I couldn’t sleep. I particularly liked the getting your needs met parts so that you don’t need anything and then it comes to you anyway.
Also, I liked the money section on having $250,000 in the bank and then living off the interest.
This idea had never struck me before and I was so inspired by it and I realized that this is so what I wanted. So, in my head I made it my goal straight away and I carried this thought around with me everywhere I went. Loved the freedom of the whole idea and was prepared to sacrifice an expensive lifestyle for a simple lifestyle to allow me the freedom that I was craving.
I had been in an uninspiring job for 16 years and my energy was stagnant.
I was trapped there by the good salary that I was paid. It’s not that I didn’t want to work, but I love the idea of not needing to work and being able to walk away from a job that I don’t like because I have this nice little passive income coming in. I could work part time and also earn an extra few hundred dollars a week to add to this. I’m happy to say that I am on my way to my goal.
Currently, I am having a break from work. Since I have $160,000 in the bank, I am living off the interest of 8% Australian dollars. But I am living in Singapore with my partner. Given the exchange rate this has given me a nice little income and allows me to travel around Asia. I plan on adding to this $160,000 eventually but right now I live a simple lifestyle and I don’t need to work. I love this freedom and I love it that I am on my way to achieving my dream. Thank you, Talane, for inspiring me!”
Read more inspiring stories in Coach Yourself to Success and learn how you too can get on the path to financial independence and start enjoying the good life much sooner than you think.