Financial Independence

Working allows us to leave our parents and live on our own. It allows us to be independent. I will call this the first independence. If we work hard and invest our savings we can accomplish independence from having to work. This is the second independence. It is often called financial independence. The graph below shows a standard time frame for when we are dependent on parents, independent through work, and independent from work.

path-to-financial-independence

path-to-financial-independence

Financial independence is a worthy goal. If we don't have to work, we can devote our time to developing ourselves and contributing to society. Benjamin Franklin lived to age 84. All of Benjamin Franklin's major achievements were made after he reached financial independence (FI). He reached FI when he was in his early 40s. His path to financial independence looked something like this:

path-to-financial-independence-franklin

path-to-financial-independence-franklin

If you want FI by age 50, you first need a plan that will get you there by 70. It is more difficult to achieve FI at younger ages. Therefore, a retire-at-70 plan must precede a retire-at-50 plan. Increase your chances of an early FI by thinking about these things now and studying people who have achieved early FI.