Create Your Financial Independence

What does financial independence look like to you?

What is financial independence anyway?

Financial independence means that you can support yourself with funds generated from sources other than a job (or donations from others).

For many of us, this feels out of reach. Most people never get there. Not because they can’t, but because they don’t even try.

Many tell themselves that this could never happen to us, we don’t make enough money, we just aren’t one of the ‘lucky ones’, etc.

Whatever excuse we tell ourselves.

So the first step to achieving financial independence starts in your mind.

It starts with changing your beliefs.

You must start the journey to financial stability and independence understanding and believing that:

  1. You deserve to be financially independent.
  2. You CAN become financially independent.

Without these, you will consciously or unconsciously sabotage your efforts towards financial security.

Once you have these mindsets or are at least consciously working on establishing them into your psyche, then you can move on to the practical steps.

Briefly*, the simple practical steps to financial independence are:

First — You must know where you are beginning.

You can only get directions somewhere if you know where you are at.

The same is true of your finances. Sticking your head in the sand doesn’t help. The adage ‘ignorance is bliss’ is completely off when it comes to feeling peaceful about your money situation.

How do you figure out your starting point financially?

Step One: Make a personal net worth statement.

List all of your assets and their value on one side of a sheet.

List all of your liabilities (debts) on the other side.

Subtract your liabilities from your assets and the result is your net worth.

It’s not hard. It may be painful.

But you need to know where you are.

Step Two: Work on decreasing your liabilities. Get Out of Debt as soon as possible.

Many people talk about getting out of debt and there are many strategies.

See my article about debt here.

Put as much money as possible on debt repayment every month. The burden of debt is real. Never just pay the minimum payment required, as this ensures you will probably be in debt forever.

Only those to seek to get out of debt and then to actively avoid debt — especially consumer debt, can really find financial peace.

Step Three: Get your emergency fund in place.

Start with $1000, then work on getting 3–6 months ( I like 6 personally) of monthly expenses saved in a high-interest savings account.

This gives peace of mind that cannot be explained until it is experienced.

An emergency fund ensures that you can handle most of the unexpected costs that often come up, car expenses, house repairs, IE. an emergency.

Step Three: Start investing and maxing out your Tax-Deferred Accounts.

In Canada, these are your TFSA’s and RRSP’s. In the US, they will be your Roth IRA’s and 401K.

If your employer has a matching program with your 401K or RRSP, make sure you contribute enough to get the maximum match. THIS IS FREE MONEY!

  • Do not skip this step. You are guaranteed a much higher growth rate just from the employer match. You cannot get this anywhere else.

Step Four: Learn about Index Fund investing. Use low fee index funds as much as possible.

According to Investopedia:

“An index fund is a portfolio of stocks or bonds designed to mimic the composition and performance of a financial market index.

Index funds have lower expenses and fees than actively managed funds.

Index funds follow a passive investment strategy.

Index funds seek to match the risk and return of the market, on the theory that in the long-term, the market will outperform any single investment.” (see the full article here.)

Learn about investing. There are podcasts, books, YouTube videos, etc. teaching about index fund investing, money management, financial management and more.

Maybe find a financial advisor you can trust. A fiduciary is preferred. A fiduciary is an investment advisor that has been ethically bound by their association to always act in your best interest.

Get started with a balanced, properly allocated portfolio in the stock market. Allocation means the balance between stocks and bonds — this is personal, depends on age and risk tolerance.

Roboadvisors are an easy way to get started. Roboadvisors are providers of financial advice and investments with little human intervention. It’s not a scary as it sounds. Google “roboadvisor” and start learning.

Get started today.

There is no real market timing involved, it’s just time in the market. The more time in the market, the better.

Step Five: Decrease your spending.

This step is important. Get off the hamster wheel of “keeping-up-with-the -Jones” and the trap of consumerism. We are exposed to a vast amount of marketing that successfully convinces most of us that we need something.

Take the time to think through all of your purchases: Is this something I need or want, do I love it?, will I still love it in a year? Can I afford it without credit?

Step Six: Increase your earnings.

Every year ask for a raise. You may not get it, but you must ask. Research on great ways to ask and how to make yourself more valuable to your company.

Start a side hustle, a part-time job or company, something to bring in extra cash — and use that to pay down debts hardcore or stash away in your stock portfolio.

Maybe invest in real estate. No guarantees here and I personally don’t do this, but many do and if this is an interest of yours, learn about how to do this successfully.

Step Seven: Increase the GAP

As Paula Pant says in the Afford Anything podcast (highly recommended), you want to maximize the amount of money you can and do save (invest).

You do this by BOTH increasing your earnings and decreasing your spending.

Increasing the GAP between what you earn and spend and investing the difference is the way to financial freedom.

The Gap is simply: What you earn minus what you spend = The “Gap”

Invest that. (Yes, and did I tell you to pay off your debts? 😄).

Financial freedom is available to all who actively seek it. It is worth it.

Is it easy? Not always. But create healthy financial habits now and it will become easier.

It is simple. Follow the steps. Be clear and consistent with your goals and how you plan on getting to them.

Write your goals down. Visualize yourself retired with the freedom to live how you choose.

You deserve it.


*(I could write a book about the details of these steps and others I may have not mentioned. Many books have been written and there are certainly other paths to wealth not mentioned here)


  1. Creating your financial independence is a difficult task, but if you can achieve this, it’ll be fantastic for you. You’ll be able to live peacefully thereafter, and it will mean you won’t have to depend on anyone else.


  2. I am always seeking ways to make more income to no avail. If you budget and track your money for too long it gets so exhausting. I hope I am financially independent some day. I am making efforts to get there. Thank you for the post it is very encouraging


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