How to become financially independent in five years or less

Try these books for FREE:

Book number 1.

Book number 2

1. Know your financial starting point

Start by calculating your current net worth. This is the total value of all your assets minus any debt you owe. Once you know where you are, it's time to set goals and work backwards from there. For example, if your starting point is $5,000 in debt and $2,000 in assets, then your goal should be to get out of debt first before investing. If you have more assets than debt, start building an emergency fund and saving for retirement. If you have more debt than assets, stop buying things on credit cards (the interest can really add up!) and pay off as much as possible each month. Focus on paying off debts with the highest interest rates first. The sooner you're debt-free, the better.

2. Open an investment account

Opening an investment account is the first step towards becoming financially independent. You can open one at your local bank, brokerage, or credit union and it will be waiting for you with a balance of $0.00 when you get back from lunch today. As always, make sure the account is FDIC-insured (or equivalent) for at least $250,000 per depositor per bank. If possible, keep your work paycheck there so that you’re not tempted to spend it. If that’s not possible for some reason—for example, if the financial institution doesn’t offer direct deposit—then just arrange automatic transfers of money into this account as soon as it arrives each month.

3. Put money into stocks and mutual funds

The first thing you should do is have a game plan. Figure out what your goals are and figure out how much money you will need to meet them. It may take some math, but it's worth the time. Once you know what your goal is, figure out how much money you will need for each year of saving until your goal (at least one year). Then divide that total by the number of years until your goal and this will tell you how much to invest per month. So if you want $10,000 in 5 years and $1000/year, then you would invest $200/month ($10,000 divided by 5 = 2,000/year divided by 12 months = 200 per month). Another example: You want $1 million at retirement. You would start investing with an amount equal to 1% of your annual salary times 26 years times 4%.

4. Pay off debt with a side business

It's important to pay off any debt you have, but it can feel impossible when you're working a full-time job and earning a decent salary. If you don't want to wait until retirement, then it's possible to get out of debt by working on the side. You can offer services such as tutoring, providing childcare, having an Etsy shop, pet sitting, walking dogs, being a virtual assistant or running errands for other people.

5. Create multiple streams of income

The key to financial independence is diversifying your income streams. This way, if one stream of income dries up, you will still have others to rely on. Here are some ways you can create a second source of income:

-Join the sharing economy by renting out an unused room in your home, offering lessons or tutoring services, renting out your car and more.

6. Keep track of your finances

It's important to keep track of your finances so you can see where you're spending your money and what habits you might need to change. It's also a good idea to set up an emergency fund for unexpected expenses, as well as a retirement account for when you're ready for that phase of life. The best thing about keeping track of your finances is that it can help make you more financially independent.

7. Avoid unnecessary spending

It can be difficult to find ways to cut back on spending, but it is worth the effort. Start by rethinking your monthly expenses. For example, try switching from buying bottled water at the grocery store to filling up a reusable water bottle with filtered water at home. You can also save money by buying your coffee and lunch at work instead of eating out. These are just two ideas for how you can spend less each month and build up your savings account.

Try these books for FREE:

Book number 1.

Book number 2