I know, the title of this post makes it sound too good to be true. But becoming financially independent really is EASY and really only requires 2 steps. So why beat around the bush, let’s just tell it like it is!
In my very first post, I made it a point to focus on mindset. Let’s revisit that for a moment. In order to do something you are not currently doing, you first need to let go of your excuses and change your mindset. This is the building block and the foundation of quite literally EVERYTHING we will talk about going forward. We have to first believe that it’s possible before we can actually do it! Because ultimately, financial independence starts with mindset, not money.
With that said, most of us grow up with a preconceived mindset around wealth, health and self. We get ideas from our parents, teachers, and friends and these ideas tend to stay with us pretty much forever. They get so ingrained in us that they become a part of who we are and are difficult to change on the surface. That’s why it’s so important to first shift your mind to a more positive attitude and believe that YOU CAN DO IT! (It helps if you read that in the voice of Rob Schneider from The Waterboy!)
What the world wants us to believe
If you grew up in the middle class then you probably grew up thinking that getting ahead in life was only for the rich and famous. As a child, most of you probably dreamed of becoming a movie star, or an athlete, maybe a singer or musician. Even if you didn’t want to become famous, you probably had ambitions of becoming a doctor, nurse, or lawyer.
See, when you have the mindset of only the rich and famous can succeed in life, then we tend to gravitate to those fields with high paying salaries or income. All of the professions I mentioned above usually come with increased income and at least some level of fame. Tell someone your a doctor, and you instantly become the most likable person on the block!
But the truth is, we don’t have to earn a high salary to get rich. In fact, this is a perfect example of how to become financially independent without a high income. The amount you earn really has nothing at all to do with being rich. And this is where the shift in mindset needs to take place. It may be “easier” to get rich with a high salary or income, but becoming financially independent has just as much, if not more to do with how much you SAVE rather than how much you earn!
Step 1 to becoming rich
The first step is really quite easy. Although some of you will probably say it’s impossible. But remember from the last post, hard doesn’t equal impossible! The first step to becoming financially independent is to SAVE MORE THAN YOU SPEND! That’s it! I told you it was easy! Contrary to popular belief, that’s how the majority of millionaires get rich everyday in this world.
- It’s not by winning the lottery.
- It’s not by getting an inheritance passed down to them.
- And it’s not by making $500k a year.
It’s simply just saving more than they spend!
We will dive into the specifics on how to increase savings in future posts, but for now I just want you to focus on this 1 simple thing. Don’t worry about the “how” right now. Just worry about the “what”. Keep it in the back of your mind and just know that you MUST save more than you spend in order to be financially independent. Unless of course you have a rich aunt or uncle that is on the way out!
Step 2 to becoming rich
If the first step was easy, then guess what, the second step is even easier! This might sound like a foreign language to some of you, and that’s ok. Again, don’t focus on the “how” right now, just simply focus on the “what”. And the second step to becoming financially independent is INVEST THE REST! Again, this is how the majority of millionaires get rich, they invest their money!
You’re not getting rich anytime soon by keeping those savings under your mattress, or in the old pickle jar in your sock drawer.
Invest my money!? That’s nonsense! I already “invest” my money in a high yield savings account at my bank!
Yes, some of you got 5% last year in a high yield savings account so you think you’re winning! Meanwhile, the total stock market gained 25% last year. So you’re not winning, you just got lapped 5 times by the people that are!!
If you are not investing your money then you are never going to achieve financial freedom. Unless of course that rich aunt or uncle comes to help you out again! If you’re serious about becoming financially independent, this step is essential. I’ll get more into my super simple investing strategy in later posts, but for now just focus on the fact that investing your money is something that MUST happen.
I know it sounds scary at first, especially if you know NOTHING about investing. But the truth is, it’s really quite simple and easy and even fun! And you don’t have to start at the age of 18 in order to retire early! Investing can be done at any age by anyone. Even if you have no knowledge! I myself didn’t start investing until the grand old age of 31!
Final Thoughts
Becoming financially independent really comes down to just 2 simple ideas…
- Save more than you spend
- Invest the rest
