What is financial independence? What does it actually mean and how do you define it in a winnable way?
When you get to a stage where you don’t have to work again in order to live your life, that’s financial independence. It’s when you have enough passive income to replace your current income and if you work, it’s because you love to work, not because you have to work.
“Wealth is the product of the mind. No amount of money you ever achieve will make you wealthy. Gratitude will, living a life where you know you are always contributing will, adding value will.” Tony Robbins
According to insurance industry statistics, out of 100 people who reach retirement age, only one will be wealthy, four out of the hundred will be financially independent; fifteen will have some savings put aside. And the other 80 will be dependent on pensions, still working or broke.
How could this happen? Considering the average person works for 40 years and still in the end,they don’t have enough money to support themselves.
The 3 main reasons why people are not financially independent
- They don’t decide to be financially independent. Yes! Some people think it’s too far to reach so they think that’s not possible for them therefore they never make a firm decision. Instead they only wish and hope for it but you know your dreams don’t come true by hope and wish.
- They just “kinda” want to be financially independent but they don’t have the actual burning desire and the strong enough “why” they must have it.
- They do decide to be financially independent but they are not willing to pay the price and don’t have the persistence to follow the plan until success or they procrastinate until it’s too late. They always have some excuses instead of making efforts.
The first step to become financially independent is that you must set it as a goal and make a plan to achieve it. According to Brian Tracy, there are four critical steps that you must follow; all of them start with D:
- Desire: How bad do you want to be financially independent? You must want it bad enough and say to yourself “I want to be on the top 5% of the population because it’s very crowded in the bottom 95% and there’s no room for me!” How bad do you really want it? If you want it bad enough, you will make the unshakable commitment and be willing to make sacrifices. As the saying goes, if you want success as bad as you want to breath then you will be successful.
- Decision: You must make a decision right now, no matter what it takes, how long you have to go or what price you have to pay to achieve it. Are you doing whatever it takes?
- Determination: You must be determined and take action in spite of whatever people around you say to you or the obstacles and challenges you might face.
- Discipline: You must discipline yourself to form the habits necessary that you can repeat over and over again until success.
Tony Robbins: 5 keys to financial freedom
Here are 5 keys to achieving financial freedom according to Tony Robbins
Take action now!
Make the decision today that you are going to be financially independent no matter what. Then write it down in your diary everyday and make a plan and start to work on it every single day until you achieve it.
Tony Robbins said it very well “It is in your moments of decision that your destiny is shaped.” So making decision is the first step to bring your dreams into reality.
The most important thing in setting goal is clarity. In this case, it means you must know how much money you will need to live the life style you want. How much is enough?
Many people want to be wealthy but they don’t know the exact number they want. Some people think that they must have a lot of money so they come up with a significant amount of money and then they find themselves frustrated and think it is impossible to achieve then they just give up. Isn’t this true?
You have to figure out the amount of money you need to provide basic living such as food, accommodation, education and other daily expenses and make a long term plan to achieve it. So, what is the exact amount of money do you need? Write it down now!
Think in advance that you will persist in the face of every setback or challenge you face. Make a promise to yourself that you will never give up. You will be unstoppable and keep on moving forward until you finally achieve your goal. No matter what it is, never give up.
Another tip to be wealthy is that you must have wealthy habits. Here’s why: a poor man is simply because of his poor habits about money. He has the habit of spending more than he earns. So what does this really mean? Well, if he earns a lot of money, he would spend a lot of money because that’s his habit, his ritual. Therefore, having more money simply will not solve the problem.
Here is the formula to achieve a long term financial freedom, if you commit yourself to do it:
- Spend less than you earn and invest the different. No matter how much money you have, if you spend more than you earn you will always be poor. Most people spend more than they earn and wonder why they have nothing left.
- Pay yourself first! Save 10% of your income to get compound interest. If your financial situation right now doesn’t allow you to save 10% of your income, then try saving 1% of your income and live on the other 99%. Once you are comfortably living on the 99%, save 2% of your income and keep doing that until you can save 10% of your income or more.
- When you receive compound interest from your saving, re-invest all the money until you hit the critical mass. The critical mass is simply an amount that can generate the income from interest so that you don’t have to work again. It’s like a golden goose that lays golden eggs for you. This is the money machine you want to build.
- Continue learning and developing yourself. Remember personal development is a journey. To earn the most you must be the best.
Success is 80% of psychology and 20% of mechanics. If you can master your self-discipline, have a burning desire, be committed to become financially independent and never give up, you will definitely achieve your goal. This is a sure thing!
Feel free to share this article!