If you have ever worked a job in your life, then you know one thing that will ring true almost ever – not having to work is much more fun and enjoyable than having to work. But unfortunately, having money is a requirement to maintain your health, a good standard of living, and function in society. The only way to not need a job and remain financially healthy is to achieve financial independence for yourself without needing income from a job. Here are three things that you need to know about achieving financial independence yourself.

Know Your Numbers

The first thing that you are going to need to know when looking to achieve financial independence is to know your numbers. You should have a specific goal target to hit in your investments and passive income to hit your financial independence or FI number. This number is going to look differently for everyone but calculating it will be pretty simple. You can be considered financially independent when your yearly expenses are four percent or less of your investment portfolio. This is based on a safe withdrawal rate of about four percent each year to maintain your investments while living off of them.  What You Need to Know About Achieving Financial Independence

Start Investing

Another crucial thing that you need to know about achieving financial independence is that you have to start investing now. You can’t save your way to financial independence, as inflation will rob you of currency value every year. Investing allows you to grow your wealth much faster and safer than with a bank account. A 401(k) allows employees to save up to $20,500 a year. This money is then put into an investment account from which you can invest in stocks, bonds, and ETFs which will grow with tax advantages for your retirement. Take advantage of your 401(k) and start investing today.  W

Build Streams of Income

The final thing that you need to know about achieving financial independence is that it gets easier the more streams of income you build. Building businesses, investing in real estate, stocks, and businesses, having a job, a side hustle, or anything else that earns you money is a stream of income. The more streams of income you have, the less reliant you will be on your career income as y0our main source of money. The less dependent you are on your job, the closer to financial independence you are. 

 

Financial independence has become the goal for many young people looking to enjoy life on their own terms but achieving financial independence can be tricky for anyone. Make sure that you know these three things to achieve financial independence quickly and easily.

 

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