What is Financial Independence?

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This post answers the question “what is financial independence?” by providing a workable definition for the phrase.

What is financial independence? People have misunderstood the word financial independence. Financial independence is somehow connected to your daily life. People think they work in a big company and earn a huge salary at the end of the month, which shows they are financially independent.

In my view, they are not financially independent.

It is not about how much you are earning from your job or business. The person who is attending 9 to 5 office or businessman who is spending his day working for his company are not the people who are financially independent. They are stuck in the routine work. They can’t control their life. Their life is controlled by the money they are earning.

You might have seen people who are rich but they still working hard to earn more. They don’t have time for themselves. They are stuck in a very robotic way of living. The money they earn from their hard work is not enough for them. Such people are always afraid of losing their wealth. They don’t realize they are giving up their precious life for the money. Millennials certainly have a unique relationship with money.

What is Financial Independence?

A financially independent person can control their time on his or her own terms. They can do whatever they want to do in their day to day life. These kinds of people are passionate about what they do and how they are spending their time. They feel excited when they begin working on their project early in the morning.

When you enjoy your work you will not have regret about the time that you are spending on that particular thing. It might be your freelancing work, job or business. Choosing the right kind of work is crucial to becoming financially independent.

History has shown that people who love what they do make a big difference in their life.

In the interview with Steve Jobs, one journalist asked Steve jobs how anyone become successful in business, so Steve jobs replied, and I quote.

“You have to have passion about what you do, or else you will give up. Any rational person who does not have a passion for what they do give up at the end.” – Steve Jobs.

I have completely agreed with this thought. Passion makes you the best in your skill. So find something that makes you happy.

So I hope we answered the question of what is financial independence; but, how to obtain it? Here are some of the tips on how to achieve financial independence:

How to Achieve Financial Independence

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1. Find your passion

Finding your passion will allow you to create a platform that will become your earning source. Passion can be anything that you enjoy the most.

Once you find your passion or niche, note down it on a piece of paper. Some people might find more than one passion. It’s ok to have more than one. Note down it on paper and start doing research around your passion.

You have to evaluate the depth of your passion. See what industries are connected to it. How you can earn from it. Note down the amount that people who are already in your field are earning from the same passion. This earning amount will become your ultimate goal.

When you follow your passion, earning becomes fun. You will reach your goal easily by upgrading your skill.

2. Remove distractions from your life

Society around you is filled with unwanted information. Your phone, television, gossip with friends and many other things will come in your path.

You have to avoid any distraction which is not connected to your passion. The ultimate goal is to make you financially independent and be happy with each movement you spend in your life. So these distractions are not on your list so keep them away for a while.

Focusing on your goals will keep you alert when such things try to distract you. When you are aligning yourself with your goals you will see you are not getting involved in unwanted activities. You will be calm and steady towards your goal. This sounds simple enough but it truly works.

3. Upgrading is essential

Once you decide what you want to do in your life, the next step is to upgrade your skill on daily basis.

Yes, you have to work on your skills on daily basis by using free online courses that can teach you anything online:

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Create a habit to spend 5 hours daily on your passions. More than likely, the competition will be high in your field.

If you dedicate most hours to upgrading your skills then you will move faster towards your goals than other people.

It will be challenging at the beginning but once you have a habit of practicing daily, you will improve your skill.

4. Savings and Investments

While focusing on your ultimate goal, you also need to manage your current affairs effectively.

This means spending less on things which are not important and manage your savings properly. Keep a close eye on the things which are taking away your big chunk of money.

If these things are not connected to your basic needs then try to reduce them or stop purchasing them.

There will be many things on your monthly expense list which are not useful. By reducing your expenses, you will save some money that you can invest to earn a good return.

You should focus on reducing the expense and use saved money in long-term investments.

5. Creating an emergency fund

If you are living your life paycheck to paycheck then you will face breakdowns in your life when an emergency occurs.

Always have an emergency fund in backup to avoid colossal failure. If you don’t have any fund in backup then your first goal should be creating an emergency fund.

You can’t generate huge fund overnight, so it is better you planned for such emergencies. For financial freedom, you need the backup plan.

In conclusion

Your financial independence completely depends on how you feel about your life.

If you don’t feel motivated then you need to change something in your life. Most of life will be utilized in working, so better you have something in hand which you passionate about.

Life is a roller coaster ride so there will be good days and bad days. To enjoy financial independence, you should have planned for both the situation.

Money will play a big role in securing your future. Your focus should be balancing the money and passion equally to live the movement at the fullest.


About the author

Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.
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