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Financial Independence: Myth or Reality?

Your Money Mindset may be the thing "blowing up" your financial freedoms.

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The term, “Financial Independence” is dangled in front of us in the media, on financial websites, touting the dream of living free from financial worry or stress. There is even a popular movement in the “FIRE” (Financial Independence Retire Early) community.

The premise of Financial Independence is that making extreme sacrifices during your working years to allow you to save up to 70% of your income will allow you to retire earlier than the traditional age range.

Proponents of this movement believe that people are responsible for their financial choices, actions and belief systems. Basically, this means that our ability to retire early is based in personal and moral fortitude.

I do believe in taking responsibility for our choices, and in experiencing the outcomes of those decisions. The rub is that most people have not fully grasped the enormity of the role that their core beliefs play in their ability to be financially successful.

Whether you want to join this FIRE movement, or have a different definition of “Financial Independence” it is crucial for you to understand your approach to money. Often referred to as our Money Personality, your approach to managing money can determine how you make financial decisions.

Rooted in our Money Mindset, your approach to spending, saving and attitudes about money can catapult you in to success, or leave you feeling stuck, unable to save more or spend less.

Our Money Mindset is formed from the moment you are born and is shored up during our formative years. Your attitude and approach to money is influenced by your parents, community, religious beliefs and the constant marketing we are subjected to. As adults, we take our Money Mindset for granted.

If you have the audacious goal of becoming financially independent, you must make sure you have the tools needed to do so: a solid income (most of the members of the FIRE movement are earning six figures), no revolving debt and are willing to be extremely frugal for years. 

I don’t believe in total Financial Freedom! After all, even if you have no debt, and you retire early, you will still have a responsibility to your money. You will need to know your spending rate, monitor your investment portfolio, and make decisions with your money for the rest of your life! 

Freedom and Independence mean two different things when it comes to your money. Getting clear on differentiating between the two can offer you a direction when setting your goals for your future and your finances!

Is your Money Mindset aligned with accomplishing this? You can take our Money Personality quiz to find out! 

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