Financial Planning

Six Smart Strategies to Achieve Financial Independence

By  Rick Orford

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Are you tired of working overtime so you can pay the bills? Do you long for change in your career because you’re not getting paid enough? Is money a stress factor in your life? Does money hold you back from doing what you want to do? Are you worried about your financial future and how you’d cope in an emergency? Do you think about your retirement and what the future might hold?

These are all general concerns, and you’re not alone if you’re feeling this way. Achieving financial independence holds the key to freedom and happiness for so many of us, so why are we not doing more to reach our goals?

It’s because we think that we don’t have what it takes. Nothing could be further from the truth. You don’t need to be a Certified Financial Planner to pave your way toward financial independence.

Instead, this article will explore six smart strategies you can implement now to enjoy a brighter financial future.

1. Create a Monthly Surplus of Income

The first step to reaching financial independence is creating a monthly income surplus. This means that your monthly income will be greater than your monthly expenses. While it may seem like an obvious goal, it’s not always easy to achieve. Many of us live paycheck to paycheck, and our expenses always seem to be one step ahead of our income.

There are two ways to create a monthly surplus of income: 1) Spend less, and 2) Earn more.

Spend Less

The first step to achieving financial independence is to spend less than you earn. This may seem difficult, but it’s essential if you want to reach your goals. There are a few ways to do this. Start by tracking your money. You can do this by making a budget and sticking to it. Doing so will help you see where your money is going and adjust accordingly.

Earn More

When it comes to increasing your income, look for ways to earn more. This could mean asking for a raise at work, getting a promotion, or switching to a higher-paying job. If you’re self-employed, look for ways to increase your rates or find more clients. There are several ways to achieve this, and it will take some time and effort on your part. But it’s worth it if it means reaching your goal of financial independence.

2. Ask For a Raise or Promotion At Work

If you’re happy with your current job but feel like you deserve a raise, then it’s time to have a conversation with your boss. Research the average salary for your position and explain why you deserve more.

Consider what you were hired to do in the first place, and think about what you’re doing today. If you’re doing more work than initially discussed, it might be time to ask for a promotion. And remember, it could mean taking on more responsibility at work or changing departments.

Either way, be prepared to negotiate and don’t be afraid to walk away if you don’t get the offer you want.

If you’re unhappy with your current job or feel you’re not getting paid enough, it may be time to switch to a higher-paying job. It could mean finding a new job in the same field or changing careers altogether. Do your research and ensure you’re qualified for the position before applying.

3. Create a Successful Side Hustle That You Love

To generate the cash you need for true financial freedom, you should take the time to create and launch a side hustle that you genuinely love and can bring in a lot of money. If you are enthusiastic about what you are doing and put the work in, you’ll be able to get clients for your side hustle venture and grow your revenues over time.

Developing a successful side business also protects you against volatility and economic downturns that may affect your day job. For instance, many individuals and couples survived the pandemic because they had a second income stream. Even if lockdowns disrupted their day job, they could rely on and grow their side hustle business.

4. Get the Training You Need to Start a Tech Business

Suppose you want to bring in revenue and have the freedom to work from anywhere. In that case, you could consider signing up for advanced technical education that will qualify you as a software designer and developer. You might pursue one of many specialties, from coding in Python or JavaScript to graphics design or website creation and development.

All these skills will give you substantial financial independence, as you’ll be able to choose your clients and charge high rates for your work. You can decide how many hours you work, look for projects that really appeal to you, and then do your work from anywhere in the world via the Internet.

5. Invest With Other Investors You Trust

One of the ways to leverage your investment funds and diversify your portfolio is to pool your resources with other investors you trust. For example, investors can find partners on a local or regional level, where in-person meetings are possible so that they can tap into the collective wisdom and insights of the group.

You and your fellow group members can come together to form an angel investment fund that actively seeks out exciting new companies and business ideas in the area. With the right due diligence, you’ll be able to make ground-floor funding decisions that should bring substantial returns on investment and financial freedom and independence over time.

Minimize risk by choosing your team wisely, as you don’t want to be victim to someone else’s bad decision-making. Look for other business owners, experienced investors, and local professionals.

6. Use Tax-Advantaged Accounts to Preserve Your Investment Gains

Real estate presents a great opportunity if you are looking at investing as a path to true financial independence. Over the last twenty years, this investment vehicle has performed well against the S&P 500. With self-directed IRAs, you can use your retirement fund contributions to fund real estate purchases as you would stocks or bonds.
The long-term horizon for real estate investing matches well with the tax deductions and deferrals that are part of your 401(k) or IRA. You can use these accounts to fund real estate investing, and their inherent tax advantages let you preserve most of your gains.

Final Thoughts

The road to financial independence can be long and arduous, but it is possible to achieve it with the right strategies. It will take time, discipline, and dedication, but you can get there if you set your mind to it. Nevertheless, the tips and tricks outlined in this article will help you on your journey to financial freedom. With a little planning and effort, you too, can make your dreams a reality.

About the Author

Rick Orford

Rick Orford is a two-time best-selling author (his books have become Wall Street Journal, USA Today, and Amazon best sellers), investor, and mentor.

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.