What is financial independence? What does financial independence mean to you? That is an important question to answer when determining what goals you have for your money.
J.D. Roth from Get Rich Slowly has written an article titled, Financial Independence: The Final Stage of Money Management. In this article, he offers a bunch definitions for financial independence. And, he asks his readers to tell him how they define financial independence.
Financial Independence To Me
I break financial independence into 2 phases. Phase 1 is an intermediate phase and phase 2 is my long term strategy.
Financial Independence Phase 1
Phase 1 financial independence for me is not an end goal, but instead an intermediate goal. I want to have enough money in savings that if I was laid off, I could comfortably live for 6 months while I a find a new job.
I think that I would feel much more secure and financially independent if I knew that I had enough in my emergency fund to get me through a financial crisis.
Financial Independence Phase 2
The second phase for me achieving financial independence is building multiple income streams separate and apart from my primary job.
These multiple income streams include,
- income from blogging
- real estate rental income
- portfolio income
So far I am building my online business income streams. I make money through adsense ads on my various websites and through selling affiliate products. My online business income keeps growing. I hope that it helps me to reach my phase one financial indepence goal and then build my portfolio income.
Is financial indepence retirement?
Not for me. I think that this is the way J.D. defines financial indepence for him. But, it does not mean retirement for me.
I am a workoholic and realize that I will always be a workoholic. I don’t think that I will ever stop working. But, sure I might not always be doing what I am doing today.
Therefore, for ME, financial independence does not mean that I have enough money to stop working. Instead, it means that if I lose one income stream, I have other streams to get me through a tough time.
What does financial independence mean to you? What are you doing to achieve financial independence?
Tags: careers, financial goals, multiple income streams, retirement