How soon you can become financially independent will depend on the type of lifestyle you are looking for. Financial independence can be defined as being able to live without needing to work due to the money you have saved up. If your goal is to break free from working, then 20-30 years might be a good time frame in which to save up enough money, but if you enjoy working and don’t see it as an obligation, then less than 15 years is possible.
Money is always on our minds. Whether we are thinking about how to save money, pay off debt, or plan for retirement, it’s difficult to stop thinking about the finances in our lives. One of the most common questions people have is when they might be financially independent, or when they’ll finally have enough money that they don’t have to work anymore. The answer varies widely depending on where you live and your personal goals.
Many people find themselves stuck in a life of monotony. Work, home, work, home. They forget what it is like to feel the free-spirited joys of life. This is usually due to lack of financial stability which leads them to live paycheck-to-paycheck; sometimes they are barely making ends meet. If you’re one of these people and want to live a more financially stable life then read on.
With the return on investment for US stocks at a staggering 7.9% in 2016, many people are wondering when is the best time to retire? The answer is that retirement age should be determined by your current net-worth and how long you can postpone drawing from your investment account to provide living expenses.
It takes more than just saving money to become financially independent. You need to learn how to invest that money wisely in order to see your savings grow quickly. There is no set time period before financial independence, but you should aim for at least 25 years of living costs saved up. For some people, this may happen sooner than for others. Some things that could bring your date closer are major purchases or emergency expenses in the family.
How soon can you become financially independent? It depends on how much money you make currently and what your financial goals are. If your goal is to do it as soon as possible, then you may want to save more or spend less. Saving 10% of your income will put you at the average retirement account after only 18 years. If you’re not sure when you’re planning to retire, then perhaps saving 20% of your income would be beneficial.
Many people are not aware of how quickly you can achieve financial independence. Achieving the end goal is typically more difficult than it seems. You need to create a plan of action that involves balancing savings and spending wisely, which includes considering the amount of debt that you have, as well as potential income sources. Achieving financial independence will also require some sacrifices, so be sure to determine what your priorities are first.
There are two qualities that are necessary for achieving financial independence- the first is patience, and the second is discipline. Achieving true financial independence can require waiting decades before it comes to fruition, but if you’re willing to put in the time and work now with a focus on achieving this goal, then these two traits will allow you to achieve your goal sooner.