If wishes were horses, beggars would ride. Whilst it is possible for ‘anyone’ to pursue financial independence, not everyone would have it. True, but who stops ‘anyone’ from trying? You never know until you give it a shot.
Maybe it is the perspective leading to it or just the perspective most people have about it that is wrong. Most people imagine it means getting to that point in life where you can afford anything you want, anytime, anywhere and have no need for any work whatsoever.
The above exertion is entirely wrong. If that is financial independence, then no one ever achieves that. According to Wikipedia, financially independent people have assets that generate income that is at least equal to their expenses.
To become readily a thing to grasp, financial independence must be seen as an unending journey rather than a state of being.
All financially independent people have one business or source (s) of income bringing in money to them on a regular basis. The definition from Wikipedia provides better perspective by stressing the fact that they have income generating assets.
If we can both agree that financial independence is an unending journey, then here are the 4 things you must know:
Finance is a game of numbers
Financial independence comes from acquiring as much assets as possible. The more assets you acquire, the more you advance on the journey to independence.
At the peak, income from acquired assets become sufficient for taking care of recurring expenses, meeting obligations as they mature and much more to spare for charity.
Thus, if financial independence is a journey you are set on, then you must understand it to be a game of numbers. Seek to diversify your sources of income.
Passive income is the vehicle
You cannot be financially independent if you don’t make money while asleep. Passive income through the vehicle of varying investments, is one way to achieve this much needed independence.
Whether the passive income comes in the form of dividends from penny stocks, multi level marketing, government bonds or returns from regular investments, it is important to acquire as much assets as possible.
With your goal of financial independence in mind, you must constantly think diversification. For you, all eggs in one basket is not an option.
Investment in stocks
Despite the economic recession and melt down experienced over the years, investment in stocks remain a veritable source of income. Stocks are one of those investments that teach you patience and re-emphasizes the need for diversification, as no one sits idle waiting for stocks to mature.
Remember penny stocks? There are a couple of penny stocks to watch out for in your quest for financial independence. Penny stocks tend to be the most profitable under volatile economic conditions, so they are a sure bet for anyone seeking financial independence.
Investment in Real Estate
All known billionaires have investment in real estate – landed properties.
It is one of those investments you can make and overlook while your investment works for you. Due to its heavy asset nature, they are hold-able for the long haul.
Just as with penny stocks to watch, real estate investment must form part of your financial independence journey.
The more passive income avenues you are able to acquire, the closer you inch your journey to financial independence.