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Expert Advice to Help You Achieve a Work-Life Balance

Hustle culture is on the rise. And with modern communications, achieving work-life balance can seem impossible. We interrupt conversations to respond to work requests and notifications, and we squeeze work in on Saturdays when we’d planned to relax. Life can f.....

Wealth - 6 min read

Prince Harry and Meghan Markle have declared their intention to forgo public funds and support their own lifestyle, and they’re not the only ones embracing financial independence.

More than half of Millennials over age 21 receive financial help from a parent or guardian, according to a 2018 survey by Country Financial. For some, financial independence means supporting yourself without the help of anyone else.

Supporting yourself is a worthy first step, but many people seek another level of autonomy. Ultimately, financial independence means supporting your current spending habits for the rest of your life without having to work at a full-time job. In other words, you no longer need to work to fund your lifestyle.

You don’t have to wait until the traditional retirement age to achieve this milestone. Like the Royals, you can decide to implement a plan to achieve financial independence now.

Whatever it means to you, you can achieve financial independence by working through the following stages:

  • Solvency
  • Stability
  • Agency
  • Security
  • Independence
  • Prosperity

Let’s look at each step in greater detail.

 

Solvency

In the solvency stage, you can support yourself, but you use bad debt as a crutch. Credit card debt, car loans and student loans act as a weight on your financial well-being. To achieve financial independence, get through this stage as quickly as possible.

 

Stability

You’ll know you’ve achieved stability when you’ve paid off your bad debt. When you’ve reached this milestone, you’re ready to start taking exciting steps toward financial independence. You’re no longer beholden to companies that charge you interest and fees, so your money can start working for you in productive ways.

 

Agency

After you’ve saved and invested enough cash, you’ll find yourself in an attractive position. You’ll be able to choose the work you prefer to do instead of feeling like a slave to work you have to do. Without the pressure to “make ends meet,” you become a free agent.

 

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Security

The next phase, security, is achieved when your investment income covers your basic needs. In other words, you have enough passive income to pay for housing, food, transportation, and other necessities.

 

Independence

With a bit more investment income, you can support your preferred lifestyle. At this level, you can maintain your standard of living without having to work.

 

Prosperity

After you’ve reached financial independence for yourself, your investment income can start funding additional goals. For example, you might pursue philanthropy or angel investing.

But how can you get from your current stage to Independence and Prosperity? We’ve put together some suggestions.

 

Achieving Financial Independence

Embrace Frugality

If you’re trying to claw your way out of the challenging first stage (Solvency), start by tracking your expenses. One simple method is to use a credit card for your purchases and then pay it all off at the end of the month. Apps like Pocketbook can sort your expenditures into categories and show you how you’re spending your money.

With visual explanations of where you’re spending, it’s easier to cut back and adopt a frugal mindset. Start questioning all of your expenditures; you’ll be surprised at how much you can save. Start embracing parks and libraries for your entertainment needs. A healthy budget can be your secret weapon.

 

Examine Your Taxes

Consider salary sacrificing more of your income to capture tax benefits while saving more for retirement. Talk with your wealth advisor about different tax-saving strategies specific to your financial situation.

 

Invest, Invest, Invest

As soon as you’ve escaped your bad debt, start investing aggressively and efficiently. To achieve financial independence, you’ll want to capture market returns as efficiently as possible. In addition to investing in the stock markets, you may also want to consider real estate since it can provide reliable, long-term cash flows.

With each stage you achieve, you’ll gain confidence. Like the Royals, you can set a goal of financial independence and then execute it. Why not enjoy an abundant life set to your terms?

Your life will become more comfortable with each step you achieve, but moving up requires sacrifice, work and careful planning. Talk with one of our wealth advisors for specific advice about how to get started or what to do next. We can help you at every stage, from eliminating debt and buying investment properties to setting up a trust and planning your estate. Set up a meeting and take the first step today!

 

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