The 5 Phases To Financial Independence
Financial independence is a journey that everyone wants to complete. But be warned that the journey is a long process, not a quick-fix scheme. There is no hack to skip any of the 5 phases of this journey, but becoming financially independent is worth the hard work.
Quick Summary Of The 5 Phases
Please do not skip ahead on the 5 phases. These are meant to be followed in chronological order:
· Phase 1: Stop The Bleeding
· Phase 2: Give Yourself Some Wiggle Room
· Phase 3: Set Yourself Up For Success
· Phase 4: Grow Into Your New Self
· Phase 5: Check-In Every Once In A While
Start off by stopping the bleeding, aka do whatever you can to figure out what your problems are. If you are spending too much money, where is it going?
Once you have this information you need to act and give yourself some wiggle room. We all want to make more money to solve our problems, but that takes some time. Get started by limiting your spending, at least temporarily until you bring in more money.
At this point, you should be living within your means. You then need to set yourself up for future success by paying down your debts and building up your safety net.
Most people want to skip ahead to phase 4 where you grow into your new self. Resist the urge!! But once you get to this point, it is time to start building passive income.
Once you live within your means and generate significant levels of passive income, you will finally be financially independent. However, you cannot forget to check in on your finances every once in a while and respond to any red flags.
Keep It Simple
The most important message is this: keep your financial lifestyle simple. Live within your means in good times, and use any excess to protect yourself in bad times. Knowing and following these 5 phases gives you a head start, but does not guarantee financial independence.
If you enjoyed reading about this Phase, please read more on my Phases to Financial Independence.
If you enjoyed this story, please consider signing up for medium here (I earn a referral fee if you sign up using this link).
Please reach out to email@example.com with any questions or suggestions for other personal finance topics to cover.