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Becoming Financially Independent

Financial independence is the state of having a sufficient inflow of money to cover your living expenses without actively doing anything to have such funds flow to you.

It goes without saying that a lot of work, planning and well execution is required to reach financial independence. Many individuals never get to become financially independent due insufficient/no financial planning and where there is a financial plan, many don’t become financially independent due to ill execution.

Being financially independent is not necessarily about having a lot of money nor does it mean that one sits at home and does nothing the whole day while their bank account is flooded with money. It is a more of a lifestyle, one that requires careful planning, maintenance and execution.

One can be financially independent because their total monthly living expenses are R10 000.00 and they have figured out a way of passively earning R10 000.00 or even more. They may keep their normal job and use their active income to build more wealth-creating assets. The wealth-creating assets will bring in more passive income and that is where they may adjust their lifestyle accordingly.

There are several steps that need to be well executed in order to become financially independent. They need to be followed in sequential order because if one step is skipped, the entire plan will collapse. South Africans also need to realize that this is a journey that often takes a while to materialize.

More in this category: « Personal Savings