6 Ways On How To Be Financial Independence

In our experience, there are only 6 ways to gain financial independence.  Meaning, there are only 6 paths for people to provide for a comfortable retirement.  The acronym for the methods is LIPIBS.

L: is for Lucky – Win a (big) jackpot and then be wise with the winnings! (The hardest part about this is staying “wise” by getting good advice)

I: is for Inherit – Or,  simply said, pick the right parents! (assuming you could do that! But…how did they get “financially independent?”)

P: is for Professional – Such as an athlete or entertainer where people pay to watch you (this still requires “S” from below or else you might make it on the front page of the news…and not always in a good way)

I: is for Invent – Create something not previously developed or make a better one (and this may turn into “B”)

B: is for Business – Own a successful business (notice my emphasis on successful) (and either do “S” from below or sell it for a nice lump sum and be prudent with the proceeds)

Did any of those apply? If you don’t fall into the above 5 ways, you default into the 6th.

S: is for System – Develop a system to periodically invest consistently over an extended period of time. (emphasis on consistently) System could also include working for an employer that offers a pension (as they fund part of your system), just make sure it’s going to be enough and look at funding into your own system as well.

Maybe a few people fall into one of the first 5 letters, but by enlarge, the most “sure” way to gain financial independence is setting up a system.  Many businesses, athletes, inventors, inheritors, and lotto winners hit speed bumps that they never knew existing and wind up far from financial independence.  Very often, it’s due to a lack of long-term planning or overextending their standard of living to a point that couldn’t be sustained.

If you expect your systematic savings to be only over the course of a few years (such as a professional or an inventor), then it’s even more important to make sure that you set up the system as you very well might be in the highest earning years of your life.  In the event of an untimely (or unscheduled) exit from that income, it may be very hard to ever return to that level of income.  The sooner the system gets set up, the easier it is in the future.

Coutsy to Oc Wealth Coach