The Road to Financial Independence

Although most of us agree we’d love to be financially independent, it seems to elude so many of us.  What’s lacking?  Often, it’s just planning and commitment.
What exactly is financial independence?  It can mean very different things to different people, so your starting point should be establishing what it means for you.
For most people, it means having the funds to do whatever they want. It means not having to work, but being in the enviable position of working, or doing some other activity, because you want to – not because you need to.
“The good news is that whatever you decide it means to you, financial independence can be achieved,” says Robert Cavanaugh, Senior Vice President Investments for David Lerner Associates. “It does take discipline and a change of perspective, but by making certain adjustments to your life, you'll soon find you’re well on your way to financial independence.” 

Following these steps will put you on the road to financial independence:

1.    Eliminate the word “credit” from your vocabulary. Having a good credit score can open up opportunities for you. But living in the credit culture also puts you in a stressful situation. 

•    If you’re seeking financial independence, start by doing away with credit. If you're unable to purchase something with cash, it probably means you can't afford it. Live within your means.

•    Easy credit availability can cause you to get mired in debt. More than a few marriages have collapsed under the financial pressure caused by credit misuse or abuse.

2.    Treat needs and wants differently. Take a look at your life. How many of the things you have or do can be considered necessities? If you're honest with yourself, you'll realize you're piling on unnecessary expenses focusing on your wants rather than your needs.

•    Making a list of the things you require for survival is a necessary step for financial independence. Everything that didn’t make the list can easily be eliminated from your expenses each month. 

•    The things you do to maintain a calm existence can be added to your list of necessities. For example, your yoga class may be necessary because of the physical and emotional benefits. But you can reduce the monthly expense by purchasing a yoga DVD and working out at home.

3.    Tap into your skillset. Are you working in a field that you love and that maximizes your skills? If you think about it, you'll realize that you're most productive when you’re doing something you like or are good at.

4.    Save money at all costs. Even if it's a dollar at a time, put aside money for your savings account each month. Learning to save helps you develop an understanding of its importance.

•    One way to save is to request a salary deduction each month. That amount can go to an investment account, which limits your access.

•    Many companies have 401(K) or 403(B) accounts that can get you started with a savings plan. Look into what’s available at your place of employment.

After reading this, you'll likely realize it's much easier than you think to make some simple financial adjustments. Give yourself four weeks of this routine and then assess how it’s going. You'll feel encouraged by the positive results!

IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.