Financial Independence is a philosophy of focusing your financial resources on the things that make you happy, to enable living a life where you no longer have to work for money. Some people choose to retire early once they reach this stage, and other continue to work because they enjoy their work. This choice is a key element of the freedom of Financial Independence.
Saving a significant proportion of your income is the starting point on the journey to Financial Independence. Saving 30% of your income would give you financial freedom in less than 30 years! It’s shockingly simple maths! You can calculate how many years it might take you with this calculator.
Reducing your expenses is the simplest path to increasing your savings. Reducing expenses doesn’t mean forgoing the things you enjoy – instead you can focus your spending on the things that matter to you. Expense tracking will help you see what you spend your money on, and budgeting will help you decide which elements of your life matter to you. Allocating your hard-earned to the areas that mean the most to you will help you achieve Financial Independence, with an awesome quality of life along the way.
A stepwise approach to Financial Independence
You can start your journey today with these simple steps.
- Increase your income
- Make sure you check your payslip and chase any underpayments
- Consider getting a side-gig
- Reduce your expenses
- Enjoy life along the way by allocating your income to things that make you happy
- Retire, or don’t if you still love working
Some interesting blogs to guide you
At this stage I’d like to keep focussing on the specifics and intricacies of finance for junior doctors, rather than the broad philosophy of financial independence. Here’s some great blogs to guide you on the journey
Aussie Firebug – An Australian blog with a great retirement calculator that takes Super into account over the long-term.
Mr Money Moustache – An American blog with an in-your-face style. Good for changing your mindset, especially if you overspend.
The White Coat Investor – A blog written by an American Emergency Physician with a focus on investing.