Achieving Financial Independence Is A Goal That Has No Barriers
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Achieving Financial independence is about a life free from the constraints of a paycheck, where we can support our lifestyle, and work by choice, and not necessity.
Achieving Financial Independence
Is it real or a pipe dream? What is stopping you from achieving financial independence and stability?
The truth is, we all have different starting points. Some have an edge, while others have to start from scratch. The question is do you achieve financial independence, not how others did it?
Forget comparing your starting point to someone else's finish line. We'll expose the fears that hold you back and equip you with practical strategies to tackle common roadblocks to financial independence.
Whether you're just getting started or feeling stuck midway, we’re here to help you find the courage to stick to your path to financial independence.
“Success is not final; failure is not fatal: It is the courage to continue that counts.”
A. Achieve Financial Independence By Overcoming Obstacles
How do you achieve financial independence or become financially successful?
There’s no single answer, but there is a beginning. The start to financial independence begins with setting a goal and taking proactive steps to achieve it.
Whether it's learning how to become financially intelligent by educating yourself about investments like stocks, market economy, and mutual funds or getting out of debt by saving and earning more, the key is to start now, not tomorrow.
However, the road to financial independence isn't always smooth sailing. Many of us face internal obstacles that can derail our progress, stopping us midway or never allowing us to reach our goal of financial independence.
Let's explore these 5 common things that are stopping you from achieving financial independence and learn how to navigate them effectively. They are as follows:
5 Things Stopping You From Achieving Financial Independence
1. The Poor Victim Mindset
“If you want to be financially free, you need to become a different person than you are today and let go of whatever has held you back in the past.”
This block is the belief that achieving financial freedom is out of reach based on your background or the system being rigged against you.
For example, compare yourself to your rich friend with a trust fund and passive income from investments which allows him to support his expenses without a job.
Or blaming your circumstances or dependencies, for example, the responsibility of taking care of your ailing mother stopping you from getting a better job or moving out of the small town to the big city for better options.
This dead end is built with self-doubt and the belief that financial freedom is reserved for the privileged few. Here's the key: Your background doesn't define your future, nor does your current situation.
Achieving Financial Independence By Overcoming The Poor Victim Mindset
You control your actions, not excuses. Start where you are and make the most of what you have.
You don’t have a trust fund and a financial advisor? So what! Make do with what you have, and start earning, saving, and investing because inaction will keep you stagnant and at the same place all your life.
Are numbers your strength? Do complicated mathematical concepts seem easy for you?
Take advantage of free resources and study finance. Make a plan, get your first job, start earning, begin saving and you’ll see opportunity at every corner.
“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
2. The Sunk Cost Fallacy
This is the feeling you're stuck in a situation with no escape. Maybe it's a job you hate or student loan debt. But there's always a way out, even if it means letting go of something you invested heavily in like the sunk cost fallacy.
“Don’t let your learning lead to knowledge. Let your learning lead to action”
Let’s look at the example of Lara. She accumulated years of student loans to get an art degree. However, after she graduates, she can barely make ends meet as an assistant at an art gallery.
Lara has no time to paint because she’s busy working at the gallery during the day and a part time housekeeping job at a hotel in the evening.
Her student loans are crippling her and she’s always broke. Lara can’t change careers or get another degree because she’s stuck and art is her passion and where her talents lie. What does Lara do? Keep sinking herself deeper to establish herself as an artist because she’s invested so much time and money in it?
Lara needs to get out of the cycle of debt so she takes stock of her resources and skills.
She decides to give painting classes to young children, spreading the word with the customers at the studio. This gets her some additional income, also allowing her to do what she loves. But it’s not enough.
What is Stopping You From Achieving Financial Independence
Lara needs a side hustle. She invests her time in self-learning to digitize her artwork into a sellable online skill. Lara then goes freelance, making creative designs and logos for online clients and marketing agencies to increase her income and pay off her debt.
3. The Instant Gratification Trap
“Invest for the long haul. Don’t get too greedy and don’t get too scared.”
The initial excitement of planning for financial independence can fade as the journey stretches on. The first $10K may have been an adrenaline boost. However, resisting the urge to spend it is tough, especially when you crave a break from the extra work hours needed to boost your income and save
Expecting instant gratification, for example, expecting your investments to profit in just one year is unrealistic. Saving, increasing income, and investment returns take time.
Reinvest your profit benefiting from the snowball effect to grow your money. Don’t be fazed by slight setbacks, instead keep your direction consistent and reap the rewards at the end.
Visualize how it will feel when you can quit the job you hate or work flexible hours. Reconnect with your purpose of what made you want to travel the path to financial independence.
Not only will this motivate you to keep going, but it will also inspire and fuel you to work harder, save more, and make smarter investments to increase passive income, keeping yourself motivated with your end goal of financial independence.
4. The Herd Mentality
“The most contrarian thing of all is not to oppose the crowd but to think for yourself.”
Don’t get tempted to follow the most common path to get rich. Instead of following other’s path to financial independence, craft your own. Do your research, capitalize on your finances, and make smart choices that will work for you.
The Roaring Twenties were a period of economic wealth and prosperity where people amassed massive wealth to lose it in the Great Depression in the 1930s. John F Kennedy Sr made millions on Wall Street in the twenties and invested those millions to become even wealthier during the Great Depression.
Unlike most investors devastated by the 1929 crash, Kennedy strategically sold most of his stocks beforehand. He even profited further by shorting stocks, essentially betting on their decline.
Kennedy invested in a struggling studio in 1926. He consolidated movie companies, streamlined the production of low-budget films, and flipped them for significant profits. Kennedy exited the film industry in 1931 with $5 million in an era where most lost all their fortunes.
5. The Spending Trap
“He who buys what he doesn’t need steals from himself.”
Spending what you don’t have or spending more than you should drains your money. This could be the temptation to buy a new dress, a pair of shoes, a fancy,y or items on sale that you can do without.
To achieve financial independence, your focus should be on saving more by living beneath your means and putting every dollar to use in investments. Here’s what you can do to resist the spending trap:
Make A Budget, allocating 50% to essentials, 30% to wants, and 20% to debts and savings, and stick to it.
Follow the 24-hour Rule, If you see something you like, wait a day. Take this time to think about whether you need that dress. Then make the decision.
Dedicate a week to the No Spend Challenge where you avoid spending on anything but essentials for a specific time period.
Lilah was a thrifty spender, always looking for steals at low prices to save money. She would shop from factory outlets and budget stores. But even then she always exceeded her budget. What was the reason?
Lilah was trapped in the “Buy One, Get Two Free Cycle”. Whenever she saw a t-shirt or an item she used regularly, she would always buy more than she needed because she thought she was saving more.
Lilah re evaluated her budget, cutting down her wants to make up for the excess spending, clearing her closet, and selling the items she did not need. The next time she was tempted by a bargain buy, she waited 24 hours to reconsider her decision.
These seemingly insignificant, cheap purchases can drain our finances, straining our budget and eating the money that can be saved or invested.
B. Decyz POV On Achieving Financial Independence
“The greater the obstacle, the more glory in overcoming it.”
At Decyz, we understand that the path to achieving financial independence is rarely straight.
It’s riddled with obstacles that are not only financial but also social and emotional. Knowing and understanding the key steps to financial independence, such as how to save, and increase income are crucial to your success. Also knowing how to navigate the diverse challenges that we may face on our journey.
It all comes to conquering each phase and being prepared with a plan to counter each situation.
Having contingencies and backups, the foresight to predict and take calculated risks and adjust our plan as things change only keeping your sight fixed on the end goal - financial independence and the freedom to live a life free from financial worries.
