Your Money Really Matters: Financial Independence Day

Independence Day 2009 will be a time of national celebration. According to a recent Harris Poll, “The stars and stripes, Statue of Liberty and the national anthem are the three top symbols of the United States.” Freedom, democracy and financia

Independence Day 2009 will be a time of national celebration. According to a recent Harris Poll, “The stars and stripes, Statue of Liberty and the national anthem are the three top symbols of the United States.” Freedom, democracy and financial security are the key elements of the American dream. Most Americans dream of financial independence and being able to unleash the shackles of a lifelong job. However, only about 5 percent of the population will ever achieve true financial independence.

Financial Independence

Financial independence is having sufficient income for family financial needs and goals from a source or sources other than paid employment. It means not having to work a 9 to 5 job unless you choose to do so. It means that you have clearly identified your goals and have developed and funded a strategy to pursue them. Financial independence is different for every family since their circumstances and goals are different. There is no category that identifies a family as “financially independent” since it is an experience of freedom at the psychological level.

The Millionaire Next Door

In the book, "The Millionaire Next Door," the authors outline seven common factors of American households with a net worth of over $1 million. Typically they are business owners, only married once and are compulsive savers and investors. The seven common factors of the affluent are:

-Live well below their means

-Build wealth by efficiently allocating their time, energy and money

-Believe that financial independence is more important than high social status

-Did not inherit their wealth

-Their children are economically self-sufficient

-Proficient in targeting market opportunities

-Own a business

Pursuing financial independence is not easy and requires discipline, sacrifice and hard work. On the other hand, working a lifelong 9 to 5 job, being saddled with crippling debt and not achieving your financial goals is not an easy life either.

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