Planning for Financial Independence

Money has no value unless you’ve got the time and good health to enjoy it. In fact, if you have to be poor, would you rather be poor now or at retirement? By planning carefully and investing wisely, you shouldn’t have to make this choice.

“Invest” – NARA – 512667 (Photo credit: Wikipedia)

I believe that you ought to save early and often, making regular scheduled investments into what I refer to as your private reserve. When you have started that, than go to  the stock market and other more risklier investments.

Over the long term, the U.S. stock market yields an annualized return of about 8% (assuming dividends are reinvested). Yes, things are volatile right now … but “market risk” is not the greatest danger to your savings – inflation is the greatest danger. The value of your retirement erodes at a rate of roughly three or four percent every year.

But the stock market has always recovered from even the steepest declines. The problem is that some of us don’t have the time for it to recover if the market has a steep decline.

Here’s an historical note for you (pertinent now): the worst one-year period for the Dow ran from 01 July 1931 to 30 June 1932. It lost 68.92% of its value. Would you have bought stock then? If your goals were long term, that’s exactly what you should have done. The best 30-year period for the Dow ran from 01 July 1932 to 30 June 1962, during which time it offered an average annual return of 14.34%.

Becoming Financially Independent
Reaching financial independence isn’t always easy. It takes time and work. You cannot accomplish your goal of achieving it by wishing. It takes doing. It takes being committed and absolutely determined to act.

One way you can act now, is to take a look at your personal expenses. Here’s some tips to cut them…

* If you and your partner both work, try to live on only one income. Invest the other.
* Save an emergency fund, but don’t make it too large. I like a small (one-month of expenses) emergency reserve, with everything else invested into your private reserve and other funds.
* Never borrow money, except to buy a home.
If you use credit cards, use them only as a convenience, not to borrow.
* Pay yourself first. Every month, invest some portion of your income for your future into your private reserve..

Finding more money to actually invest is the best way for you to reach financial independence. And one great way to find extra money is to cut back on your existing expenses. We are experts in helping people find money that they are losing unknowingly and unnecessarily.

Yes, you can achieve financial independence, but you can’t get there overnight, and you can’t get there without setting goals and making sacrifices.

So, start now.  Give us a call, we are ready to help you reach your independence.


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