Financial Independence Day
Have the fireworks finally stopped in your neighborhood? Even though we are almost three weeks past July 4th – Independence Day – some persistent souls in my neighborhood are still celebrating.
It got me to thinking. When do we celebrate our financial independence?
As business owners, we often focus on or prioritize financial independence. Financial independence is a state of being in which you don’t have to work to pay your living expenses. This might be the reason you went into business for yourself in the first place.
Do you have a clear picture of what it will take to make you financially independent? To live a life where you can retire or choose to work because you want to, not because you have to?
Here are 5 things to consider as you work toward your Financial Independence Day:
- Assess your current situation. What is the current state of your finances, both personal and business? Are you carrying a load of existing debt? Do you have sufficient money to support your current lifestyle without incurring additional debt?
- Decide upon the lifestyle you want to live. Are you aiming for what Robin Leach used to call “champagne wishes and caviar dreams,” or are you content to live in a tiny house on your own land? Keep in mind that the more extravagant the lifestyle you desire, the longer and harder you may have to work to make it happen. Don’t fall into the trap of continually raising the bar – if you keep moving the target you will never reach it.
- Determine what it will take to support your desired lifestyle. Calculate what assets you will need to acquire (home, land, vehicles), what your ongoing daily expenses will be, and what you’ll need as emergency funds to address any crisis that arises.
- Develop a plan and a timetable. As you assess the gap between your current situation and financial independence, develop a realistic plan for how long it will take you to reach your goal. How hard are you willing to work? At what price to your physical and emotional wellness? To your relationships?
- Realize that you won’t reach independence alone. Along the way, other people will support and contribute to your independence. Your family and friends will provide emotional support, your employees, investors and customers will contribute financial resources and time. When making your plan for achieving financial independence, make sure that you have considered others and how your plans will coincide or conflict with their needs and aspirations.
Financial independence takes a clear vision, a realistic plan, time, effort, and resources, including supportive relationships. It’s a state of being that requires fuel to maintain, whether that is business income or investment proceeds.
The good news is that as a business owner, you are already on the way. You have a measure of control over your life that you would not have as an employee.
We look forward to celebrating with you when you reach your Financial Independence Day.
Go forth and do great things,