What is Financial Independence?

Financial independence is a state of mind that's different from financial freedom and for many it only becomes achievable when you are “financially secure”. What does it mean to be financially secure? It means you can weather financial storms and any potential short-term hardships or curveballs that come your way. It means you won’t be out on a limb because your car has a major issue or you need to buy all new appliances. It means you have enough savings and liquidity to absorb any shocks to your finances in the short term. It means that you are not in need of anything major and are “financially comfortable”. It means you are free to take vacations and spend your time as you so wish without having to worry about too many financial limits (within reasonable means of course). The definition of financial independence is different for everyone but the general idea remains the same for most. Too many it means that you are free of most financial needs and okay to spend money as you so choose and that you are not reliant on others and are financially self-sufficient.

How Do Most Achieve Financial Independence?

Most consumers achieve financial independence through hard work and savings. Whether you have a business or work a 9 to 5, it’s all the same. It doesn’t matter so much how you generate your income but more so if you are adept at managing and investing it wisely. Those consumers who invest tend to make their money go the furthest and can use that return on their hard-earned dollars as a means of achieving financial independence and achieving the goals they desire. Although not everyone is successful in this endeavor with some grit and hard work it is possible, even in today’s high cost of living environment. Everyday someone is achieving financial independence and becoming self-reliant with regards to the money they earn. Many also achieve this goal through passive income and other investment vehicles.

When Do Most Achieve Financial Independence?

Not many consumers achieve financial independence. Those that do might not achieve financial independence until they reach the age of retirement and retirement in America has become more difficult to achieve due to recent bouts of inflation and the increased cost of living. Younger generations will have more difficulty in doing so independently without help from past generations and will have to greatly outperform their peers in order to be successful. It’s an uphill battle for sure but it’s one that is achievable.