Discover Your Unique Road to Wealth: Exploring Seven Distinct Routes to Financial Freedom.

Financial Independence: Exploring Seven Different Ways to Get There

Gaining financial freedom is a popular aspiration these days, especially among those who aim to retire early. However, the road to financial independence isn’t a one-size-fits-all journey. Here, we will consider seven interesting methods you could use to achieve it, reminding you that high income isn’t the only route to reach this goal.

Let’s first understand the frequently used concept of financial independence within this context. It’s when you have a net worth that’s over 25 times your yearly living expenses, according to the popular Trinity Study. This means you can withdraw 4% from your savings each year to cover living costs, and not exhaust your savings.

We will look at each of the seven methods, including some hypothetical situations for clearer understanding. Note: the calculations are done assuming a 1.9% inflation rate, 4% wage growth rate, 4% withdrawal rate, and 6% investment growth rate.

1. The Consistent Saver: This individual lives a frugal life, regularly saves, and invests. They aim to retire at the conventional age.

2. The High-Income Professional: Here, we’re looking at individuals in high-salary careers like doctors, lawyers, or executives. They save and invest conscientiously. But remember, a high income doesn’t automatically guarantee financial prosperity, unless managed well.

3. The Entrepreneur: Starting a business can provide a higher-than-average income, if successful. Entrepreneurs often invest back into their own businesses and may sell the business for a lump sum later.

4. The Real Estate Investor: This approach involves owning rental properties that can assure steady cash flow. However, consider the additional responsibilities of property management before jumping into this.

5. The Frugal Maven: This involves reducing as many expenses as possible to create a high saving rate. The benefit of keeping a minimalist lifestyle is that it also decreases your future living expenses.

6. The Side-Job Pro: Unable to earn more at your day-job? Try a side hustle! It will supplement your total income, providing you more to save and invest.

7. Geography Master: Moving to a place where the cost of living is less can drastically reduce your lifestyle expenses and allow you to retire earlier.

Remember, you don’t have to stick to just one plan! Mixing approaches might lead you to your financial independence goal faster. Whatever your aspiration, the important thing is to have a route and a clear plan.

Next read: 9 Steps to Financial Independence: How to Retire Early.

Explore these investment platforms for further assistance:

Public: A user-friendly platform offering commission-free trades of stocks and ETFs, and access to alternative investments.
Moomoo: Provides powerful screening and charting tools to make commission-free trades of stocks, ETFs, options, and ADRs.
Webull: An ideal platform for commission-free trades of stocks, ETFs, options, and cryptocurrency with advanced reporting tools.