As the Fourth of July should remind us all, independence is something worth fighting for. Independence means the ability to make your own decisions and live the way you choose to live. When it comes to financial independence, though, many people believe it is only a dream. There is no absolute definition for financial independence. The most common sense of the term is that someone has enough wealth to live as they wish for the rest of their life without having to work. This is a foggy definition, though – isn’t picking a stock “work”? What about people who own a business and are not involved in day-to-day activities, but still step in for major decisions? Here’s a different definition – financial independence should mean the ability to live more or less as one wants to, within reasonable limits. It may not mean the absolute freedom to never work another day again, but it may mean the ability to quit a bad job, go back to school or start a new business without major sacrifice. Likewise, financial independence should mean the ability to deal with life’s ups and downs without scrimping, sacrificing or going into debt.
It is hard to fight for independence without allies. Financially speaking, that means assets that work for their owners and throw off cash. A savings account or CD is a really basic example, but a portfolio of dividend-paying stocks or a portfolio of bonds (or bond funds) can serve the same role. Without allies, bigger companies and corporations couldn’t have gotten nearly as far as they have today. This is why it’s important to work with other investors in order to have the financial capability to make bigger investments without sacrificing opportunities just because you didn’t have enough money.
The Essay on Do You Live to Work, or Work to Live?
Do you work to live or live to work? This is a question I think of often as I approach the end of high school and look ahead to collage. I wonder to myself if I am preparing myself to be influenced by the world surrounding me with an environment rich society full of fortune 500 company jobs or the realization that I may have to struggle just to get a job anywhere and have to fight to get one. ...
Rental properties can throw off impressive amounts of cash flow not only paying for themselves, but throwing off cash above and beyond that. Writers, musicians and inventors can also look at royalties as long-term, if not lifelong, sources of income that require little additional effort. Last and not least, ownership of a business can certainly spin off significant amounts of cash flow, even if the owner is not directly involved in day-to-day management.
For starters, a careful budget is important. To make the most of every penny it is vital to know where every penny goes, and it isn’t possible to plug leaks without finding them first. There is plenty of budgeting advice out there, but one of the biggest keys is to build in an emergency fund, allow some fun discretionary spending and make saving an integral expense every bit as important as rent or food.
Once a budget is in place, cutting costs and maximizing savings can take precedence. Almost everybody spends more than they need to and a little careful consideration can usually turn up avoidable (or reducible) expenses. Saving $50 a month is not going to make anybody a millionaire (unless they can hang on for their 1,667th birthday), but every extra dollar prudently invested can multiply the value of that extra $50 many times over. “We simply want the advantages of financial security and a higher standard of living.”(Akst pg.345) Financial independence is all but impossible without taking some risks. The key here is “smart” risk – investing $100,000 in a risky biotech hoping to get a 10-bagger is not a smart risk, it’s gambling.
But doing a lot of research and spending $100,000 on a rental property in an attractive neighborhood is not nearly as risky, nor is starting a business based on a marketable skill and a real desire to do something different than the competition. Nobody is born knowing anything about the stock market or rental properties, and most people do not have a parent or mentor to learn from at a young age. Instead, most people learn by researching, reading, and rolling up their sleeves and getting their hands dirty. That process never ends. There is always more to learn, not only about investing but about specific investments as well. Likewise, financial independence requires a lifetime commitment to continuous investment. Financial independence is not simply a process of saving some money, investing that money and calling it a day. Instead, those who would be financially independent have to be on the lookout for new opportunities and news ways to make the most of their hard-earned capital. After all, the price of freedom is eternal vigilance. Independence does not come simply because people demand it, nor because someone decides they want it. It is important to take that first step and make a declaration of what you want, why you want it and what you are prepared to do to get it.
The Term Paper on Politicization of Philippine Budget System
Budget is a foundation of economic management of a country, and therefore, in the context of developing countries, it is primarily an issue of development. It is often pointed out that the Philippine budget institution is characterized by its high degree of politicization. Such politicization is said to be one of the major causes of corruption, opaque plutocratic policy-makings, and frequent ...
Decide what financial independence means to you. Once those decisions are in place, come up with a clear plan that outlines what you need, what you want, what you have today, and what you can do to move towards independence (this includes the budgeting, cost-cutting and investment plans).
Last and not least, stick to that plan and keep the goal in sight. Financial independence is not easy, but it is not impossible for those who are willing to show some resourcefulness and invest years of hard work into the process.
