The path to financial independence is much shorter than you might think. For those of us who didn't come from wealthy families, we only have 46 to 49 years to make money, or more if you want to keep working after you "retire."
During that time, we have to finish our education or training, get a job, or start a business, all while taking care of all the other things that need money.
taxes.
We have to pay for food and shelter, clothes and transportation, child care costs, college tuition, vacations, Christmas gifts, insurance premiums, and more. The list seems to go on forever.
How is it that, despite all this, some people can retire at 50 while others will never be able to? If you read the article "Get Rich Slowly," you'll know how. You can see at http://www.credit-yourself.com/get-rich.html how, if you start young, you can use the power of compound growth to make millions. But, this is the time when
Most people's income seems to be the most important thing in their lives.
First of all, you're just starting out and are still a long way from making as much as you can. You may have just gotten married and need a place to live and some furniture.
For your new job, you might need to buy your first suit or business dress. And you want to enjoy life, so you go on trips, buy or lease new cars often, and just run up debt, which you often add to your student loans.
But some people manage.
First, they don't spend more than they have and save as much as they can.
They use all the tax breaks that the government lets them, and if they can, they save even more.
They invest in a part-time business, rental property, or learn how to make more money by investing smarter.
They buy insurance against risks that could make them bankrupt.
They make good use of debt. They don't always avoid debt, but when they do, they use it to make more money. For instance, they can turn a 20% down payment into a series of
mortgages to buy houses. They can double the amount of money they have to invest by taking out a margin loan.
They can get more than one source of income by taking advantage of tax credits, loans or grants that the government backs or gives to small business owners or people from certain minority groups.
But they don't take out loans to buy things for the house. They buy their new TVs and stereos with cash.
They plan their lifestyle and investments around taxes, and they use all the tricks the IRS lets them get away with.
With an IRA and a little more than $3.00 a day starting at age 22, you can save more than $850,000.
The people who are financially independent are different from most of the rest of us in that they can find $100 a month to invest instead of spending. They don't see it as a sacrifice to invest instead of spend.
Most people will say that they have no extra money and live from paycheck to paycheck. But almost always, this is a choice about how to live.
There are many examples of people with very little money sending more than one child to college or graduate school or leaving millions to a favourite charity.
charity.
These people are special because they set out to do something and kept doing it no matter what. They worked hard, put money away, and did what they set out to do.
This can be done by anyone. You just have to ignore the allure of advertising and decide if a secure future for yourself, a college education for your kids, or a big donation to your favourite charity are more important to you than your daily double latte at Starbucks.
That's about all you need to do to get a long way toward being financially independent.
The path to financial freedom is literally paved with gold, which you can take for yourself.
