Financial independence? The path to financial freedom
Financial Independence is the First Goal
We often hear “financial freedom” as the ultimate goal.
But what’s true is that financial independence comes first, then financial freedom.
This is important to be aware of so you don’t ignore the fact that financial independence is a natural pathway to financial freedom.
Financial independence has been underrated. Let’s not forget the fruits that can come with it.
So for those of you who dream of being financially free, I’m here to show you why and how financial independence comes first, what it comes with, how financial freedom becomes inevitable as a result, and how to be it.
Before you pursue financial freedom, pursue financial independence.
I’m currently financially independent and I love it, but I’m not one to stop here. I’m on the path to being financially free too.
I’m becoming financially free because I’ll get more options and access to particular things that I enjoy. When you’re financially dependent (which is where you might be starting), your options are definitely limited. Let’s start there.
What is being Financially Dependent?
If you work for a company and receive paychecks in return, you are financially dependent— because you depend on that employer so you can pay for your lifestyle.
With this comes a capped income, you only keep 60% of what you earned from working as the rest goes to taxes, you have to ask for your time off, and you end up in rooms with people who you may not necessarily want to be around but have to be.
What is being Financialyl Independent?
Financial independence is when you don’t work for an employer— you don’t depend on a company outside of you to make a living. With this, you get to make the choices for how YOU want to live life.
We also describe financial independence as acquiring your first $100k liquid, similar to how many people deem acquiring $1M as financial freedom.
Why be financially independent?
The truth is, many people live with less than $10K in the bank and strive straight for the $1M.
Reframing your goals as $10K → $100K → $1M is much more doable.
So shoot for the S100K first and your chances of touching $1M is even greater.
Financial independence is for you if:
you don’t want to work for another person
you are naturally creative/you are a builder
you have your own vision and dream
working for someone else feels like the worst use of your time and energy
…does this ring a bell?
And this is the case for 99.999% of entrepreneurs!
Being an Entrepreneur and the path to being Financially Independent
If you’re thinking about being an entrepreneur (or you’re already one) and want to be financially independent you might think it all starts with having an amazing business idea, running with it, trying to sell a product or service so you can earn income from your business, hopefully create something big enough that pays for your lifestyle, and be able to quit your job.
This is one way to do it…but today it may not be the best use of your time, energy, and talent.
Financially Independent
Being financially independent is all about the conscious choice to no longer work for an employer. This is embodiment. So how do you even get the choice to no longer work a job?
It’s commonly known that living as financially independent requires you to earn passive income from investments and assets. This income must be sufficient to cover all living expenses for the rest of life. This is what can give you the option to choose if you wanna keep working for that employer or not.
Commonly known (since the 2010s) is the F.I.R.E. movement which stands for Financial Independence, Retire Early. The idea here is that you no longer work for an employer and spend minimally to not overuse the money from your investments and assets you’d be living off of.
Nonetheless, you would be financially independent because you no longer work for an employer.
However, living a life of spending minimally may not be your path to eventually living a life of freedom. Living minimally means limiting your life experiences like not traveling to other countries you dream of or not going out for an upscale dinner with your family and friends.
…so Financial Independence, Retire Early may not not be the financial route for you.
But don’t forget the importance of investments and assets— we’ll talk about this again later.
So scratch the “retire early” part. If you’re here, you’re here to build something big for yourself (you are striving for financial freedom!).
Instead, be financially independent and pursue your freakin’ passion. 👏🏽
Sounds kinda silly but we can call it “F.I.P.P.” (Financial Independence, Pursue Passion).
This is a leveraged lifestyle that integrates financial independence and entrepreneurship. It generates income from investments and assets combined with building a dream business/operation.
This is what you can get out of a F.I.P.P. lifestyle
Don’t have to work for an employer
Become financially literate
Time and space to pursue a creative passion
Generating wealth from investments and assets
Generating wealth from the work you’re doing with your creative passion [through business, providing a product and/or service]
And if you do it right, this naturally becomes a life of financial freedom.
Real Talk
The interesting thing is that for some people, running a business might not create a life of freedom. Running a business can actually have a chokehold on you if its all you have— and especially if your margins are small (which they usually are when you first start).
Small margins = small profitability rate aka not making much money for yourself
This is where people get stuck and find themselves falling back on working a job again.
BE FREE
The conscious choice to no longer work for someone outside of yourself is the key mindset to be financially independent. You gotta go ALL IN in pursuing your passion. It’ll be challenging no matter what, but the pursuit could be simpler with something in your back pocket that I’ll tell you about. Keep reading.
How can you run a business and remain on the path to financial independence regardless of the inevitable entrepreneurial challenges that come your way?
You need to have something you can count on without working a job.
Investments and Assets; Financial Literacy
I told you to not forget about this ;)
If working for an employer isn’t the way, investments and assets are.
You would have to learn how to invest, how to be a good investor, and how to obtain assets— but the good news is: that’s financial literacy. It’s a component of being financially free— it’s a necessary skill.
If you can grow this skill, it becomes quite reasonable for your finances to grow and to no longer work for an employer. You would have a skill in your back pocket and you would have full autonomy in what you do.
If you no longer work for an employer, then you have the space and time to grow more of your skills, resources, and connections for your passion as a business while the value of your assets grow overtime.
So how can you count on this if you don’t know what you’re doing? You need the right education to get you going.
I had to learn from other people.
Perhaps now its time for you to learn from me…
Full Circle
So let’s bring this all back full circle. Remember how I told you reaching $100K is a much more attainable goal to start with as opposed to shooting straight for the $1M? Combine good investing strategy with a thriving business you’re passionate about, and you’re well on your way.
The gap for you now is learning the investing techniques and building the entrepreneurial skills.
How
We can you show you how, but not on this blog! It would not do the entirety of knowledge and wisdom justice! Stay tuned for more!
Thanks for reading! I really enjoyed introducing this to ya. I'm super passionate about this topic and I just wanna keep bringing you into my world! Then maybe one day, you'll be able to start building your own dream world. Sending you hugs and blessings.
Love,
Jessa Mary
