David Haraway, CFP®, CRPC®, RICP®, EA 

CONNECT

Address:

4585 HILTON PARKWAY, SUITE 201
Colorado Springs, CO 80907

Phone:

(719) 375-8588

Fax/Other:

(719) 344-8692

Financial Independence

Financial Independence is the condition of being able to support oneself without having to work actively. Assuming a person begins at square one, there are two primary directions they must focus their energy: asset accumulation and expense management. Both require discipline, and very few of us are born with it. It must be acquired.

To achieve financial independence you must work hard, save hard, and spend modestly during the accumulation phase of your life. Once you have built a pool of assets that generate sufficient income to support your lifestyle, you have attained your goal.

It helps to have a role model or coach to encourage you. There will be innumerable achievements and failures along the way. Try to remain even-keeled throughout the journey. Celebrate the successes modesty; mourn the losses quietly. Each is just one more of life's lessons. If you stay on track, you will succeed.

As your successes mount, be careful to avoid displays of wealth. Live below your means. Otherwise friends and relatives may come to you for assistance and unintentionally dissipate your wealth, energy and resolve. Using your discipline consider creating artificial scarcities in your world. Pretend you make 10% less than you do, and put that much in your retirement account. You will learn to get by on less. 

Remember commentator Dave Ramsey's 7 Baby Steps:

  1. Save $1,000 in an emergency fund.
  2. Pay off all consumer debt.
  3. Finish building your emergency fund to 3-6 months of expenses.
  4. Invest 10-15% of your income in your retirement plan.
  5. Help your kids get through college debt-free or engaged in a career.
  6. Pay off your home mortgage.
  7. Transition into a second career of living and giving.