If you’re like most people, financial independence is your ultimate financial goal. The road to a financially care-free lifestyle requires planning and dedication and even a bit of luck. But you may need to fix your finances today, before you can plan for a financially secure tomorrow.
In the world of FIRE and early retirement is that "what" and financial independence is the "how." Simply stated: no FI, no ER.
Financial independence, or FI for short, is when you're investments generate enough cash to cover your expenses. That's the holy grail because it means that money is no longer an object. You're financially free!
Not Everyone Should Pursue Early Retirement
Not Everyone Should Pursue Early Retirement, but EVERYONE should absolutely strive to become financially independent.
When you're financially independent, you've got options. You can go to work or quit. Take a vacation or lie on the couch all day. What you do doesn't matter because you're financially free.
The Best Thing Money Can Buy
The best thing you can buy with your money isn't more stuff - it's freedom. When you no longer have to trade your time for a paycheck, then suddenly you can do whatever you want with your time. You're free! And that's what financial independence is all about.
The first draft of this post was about the financial challenges my wife and I face while raising our family of six on a single income. But something about that draft didn’t feel quite right. I was taking the same approach so many others do when discussing this topic. I focused too much on money and not enough on the other sacrifices that get made.
Achieving FIRE is something many people aspire to achieve – but these goals require a lot of hard work. It can be difficult to retire early when you simply work for someone else throughout your life, so many early retirees guarantee their independence through investments and by starting their own businesses.
The burnout rates in practicing physicians and physicians in training (medical students, residents, and fellows) are simply alarming. The problem seems to be getting worse with the decreasing autonomy, unhelpful/encroaching administrators, and the ever increasing financial burden of our student loans.
While you may think that physician burnout only impacts doctors, evidence shows that it unfortunately leads to bad medical care for our patients, too. With that big of a problem, what would you think if I told you that financial independence may have the power to save our physicians?
Let’s dig in.
The steps to financial freedom are not ‘one size fits all.’ Many people believe that financial freedom is all about their finances, there’s more to it than just that – it’s about more than money.
Sure, you can achieve financial freedom through proper financial planning and following all of the key personal financial ratios.
You should follow solid financial practices like creating a budget, monitoring and controlling your expenses, and saving a good percentage of your money.
Generating multiple sources of income and making numerous investments to help increase your cash flow will also help you achieve financial freedom. But, there is more to financial freedom than just the state of your budget and your portfolio.