Financial independence means having money to cover your living expenses without relying on a job, paycheck or other financial help.
It’s the point where your passive income, such as investments, savings, or other income streams, consistently meets or exceeds your regular expenses.
Key Aspects of Financial Independence:
- Freedom of Choice: you decide how to spend your time without being tied to a job purely for financial reasons.
- Control Over Life: you can pursue passions, hobbies, or ventures without the fear of financial constraints.
- Reduced Financial Stress: you don’t live paycheck-to-paycheck or worry about unexpected expenses disrupting your life.
Financial independence is often a goal tied to movements like FIRE (Financial Independence, Retire Early), where individuals aim to achieve this state at a younger age to enjoy more freedom and flexibility.
For some, it might mean early retirement, while for others, it’s simply about having the choice to work or not.