How to Gain Financial Independence

October 8, 2018
Posted in Insights
October 8, 2018 DCT Capital Fund

Many individuals underestimate the value of preparing for financial independence ahead of time. The first step to achieving financial independence is to stop waiting for the right time to prepare and to start preparing now. Most adults procrastinate financial planning because they fail to see the big picture. Planning for aspects that won’t pay off until years later is difficult for most people to wrap for their heads around. Nevertheless, with suitable preparation, developing a plan to help achieve financial independence doesn’t have to be nearly as complicated as one might expect. Here are a few tips and tricks everyone should follow in order to achieve financial independence.

Start Early        

Developing financial independence doesn’t take as much time as most would expect. In short, successful planning is established for those who have the resources to fulfill their future financial goals. With every factor that comes into play when it comes to responsible finance management (Emergency funds, utilities, mortgages, etc.) it’s easy to become overwhelmed by the notion that planning is too difficult to predict. At most, proper planning is established with minor time investment. The best course of action is to start preparations early. For example, individuals who begin making investments in the early stages of their career have been shown to have the most success in achieving financial independence.

Adapt to the Ecosystem

The truth is that the financial ecosystem changes so rapidly that it may be difficult to account how to meet individual goals. Mortgages, vehicle payments, and education are just a few expenses individuals must contend with when it comes to planning for the future. Start by cutting a portion of your salary and setting it towards investments. Most individuals underestimate how quickly money compounds when funds are invested wisely.

Equity & SIP

SIP is a great option for making smaller more controlled investments and offers a wide array of benefits for the future if utilized correctly. SIP is also an effective option at educating people on how to discipline themselves in their approaches towards making the system work for them and teaches them the magic of compounding cash overtime. Having some equity as part of your finances has shown to contribute to growing investments on a relatively short span of time. Most evidence points toward early success revolving around early preparation. The early on starts developing equity, the more likely they will achieve financial independence.

Expect the Best, but Prepare for The Worst

Taking a risk into consideration is not the most fun topic to anticipate, but it is part of the reality of everyday life. Be aware of the unpredictability of the future by managing and preparing an emergency fund. Health issues, sudden unemployment, and car accidents are all scenarios people don’t consider and suffer for as a result. Anticipate a future where every scenario is negative, and you will never be unprepared. Many failures occur because of sudden inconsistencies that aren’t accounted for. A reserve fund is a solution that keeps individuals protected from the worst kind of scenarios.

[Source]