How to Build Toward Financial Independence in Your Career
Achieving financial independence means something different to everyone. For some, it can mean paying off debt. For others, it means realizing a goal for early retirement. For others already close to traditional retirement age, it can mean rearranging assets in preparation for stepping out of the workforce. Whatever financial independence you are currently seeking, here are four strategies to bear in mind as you prepare for the big day.
#1. Save a Portion of Your Paycheck
One of the most important steps to achieving financial independence is learning to save diligently and consistently. Learning to set aside a portion of your income and dedicating it to your future self is a hard exercise in self-control, but once you master it you’ll clear the way for further steps to independence. Plus, once you are financially independent, you’ll still need to have the self-discipline to continue in rationing out your finances. And how much should you be saving? Well, it will depend on your situation and your specific goals, but generally TIAA recommends saving at least 20% of your income.
#2. Start A Home-Based (or Remote) Business
Starting a business may not be something people think of as the best strategy to achieve financial independence. Generally speaking, however, starting a business can be a wealth-building strategy when you plan to run the business for a few years to succeed and then eventually step out of the driver’s seat. Especially when built on agile and mobile technology. You can actually be fully mobile, travel, and work your own hours if that is your goal.
Starting a business can actually be much simpler than many people think. And perhaps you don’t have any trouble coming up with ideas, but scratching your head when it comes to getting a loan? According to Franchise Gator, you can use some of your 401(k) money to finance your business when you go solo.
If you decide to go this route, make sure to check your local rules and regulations and file all the necessary paperwork with the city or state. And talk to your accountant about how income and assets should be accounted for.
#3. Invest in Real Estate
You’ve probably heard the saying that land is the only thing they’re not making any more of. Regardless of the exact verbiage, investing in real estate is a safe and potentially lucrative bet for many people. Real estate investments can look different depending on where you are on the road to financial independence. For some, paying off and having full ownership of their home is a good goal. For those that do own their home, Investopedia says a reverse mortgage can become a good option for liquidating home assets. Owning rental properties can also be a great source of income.
Whatever your particular goals, the road to financial independence is paved with both obstacles to overcome and options for success. But the real prize is the peace of mind financial independence brings. Be proactive now so you can relax later!
Read this next: How to Make Your Career Transition as Smooth as Possible
About Frank Strona
As a nationally known writer, educator, advisor, technology, coach, strategic engagement and content specialist, I have been active in the pursuit to improve, educate and promote opportunities that support the engaged learner and business while also preparing the workforce with the tools and skills necessary to stay competitive in a rapidly expanding technology-based world.