Declare Your Financial Independence

Kristin Orman By Kristin Orman, Research Analyst, The Oxford Club

Special

Happy Fourth of July! Today, as we celebrate our country’s hard-won independence, let’s take a moment to reflect on our own pursuit of life, liberty and a wealthy retirement.

There’s no single manifestation of wealth. It takes different forms for different people. For some, it looks like $3 million in the bank. For others, it could be just $500,000.

Dollars and Sense

To me, feeling wealthy is closely tied to achieving financial freedom… knowing that I won’t run out of money five, 10 or more years down the road.

A wealthy retirement is less about the balance in my retirement accounts, and more about generating a steady stream of income to fund my lifestyle and hobbies… without having to rely on a paycheck.

And it’s not necessarily about being free from work, either. To me, financial freedom is about being free to do the work I want.

Simply put, a wealthy retirement requires financial independence. And the road to achieving financial independence is manageable.

The key to completing the journey is getting started.

Shift Your Focus

First and foremost, you have to change your financial behavior.

It boils down to two things: Spend less than you earn, and wisely invest the difference. The more you invest now, the more you will (likely) have later.

Lifestyle decisions are critical. The car you drive, the house you live in and the clothing you purchase will impact your financial future. Forgo the bigger home, drive a more economical car, and ditch the designer duds. Use the extra cash to invest or pay off debt.

Eliminating debt is another no-brainer.

Pay off debt with the highest interest rates first, then focus on saving. Once the most egregious loans have been paid back, you can direct all of your savings into your financial independence plan.

When you’re ready to begin investing, dividend stocks are a great place to start. Chief Income Strategist Marc Lichtenfeld writes a lot about the power of compounding. It’s been hailed as one of the most powerful forces in the universe. It’s certainly the most important weapon in your financial independence toolbox.

Use it.

Start by purchasing a group of Perpetual Dividend Raisers – companies that raise their dividends every year. Then reinvest the dividends to kick off your journey to financial independence.

It’s All About Balance

Saving is a hard sell… especially compared to a vacation to an island resort. So I’m not saying you should give up every single indulgence that makes life fun.

But remember that the choices you make today will influence the life you lead tomorrow. It’s never too late to start fighting for your financial independence. Whether you are in your 20s or 80s, it doesn’t matter.

Only you are responsible for your own freedom and prosperity. No one else.

Make your declaration for financial independence, and begin working toward a wealthy retirement today.

Good investing,

Kristin