Essay about Financial Independence

888 Words Feb 26th, 2013 4 Pages
Ori Molad
Tamar Baskind
Word Count: 882
Paper 4
Achieving Financial Independence

As the Fourth of July should remind us all, independence is something worth fighting for. Independence means the ability to make your own decisions and live the way you choose to live. When it comes to financial independence, though, many people believe it is only a dream. There is no absolute definition for financial independence. The most common sense of the term is that someone has enough wealth to live as they wish for the rest of their life without having to work. This is a foggy definition, though - isn't picking a stock "work"? What about people who own a business and are not involved in day-to-day activities, but still step in for
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Last and not least, ownership of a business can certainly spin off significant amounts of cash flow, even if the owner is not directly involved in day-to-day management. For starters, a careful budget is important. To make the most of every penny it is vital to know where every penny goes, and it isn't possible to plug leaks without finding them first. There is plenty of budgeting advice out there, but one of the biggest keys is to build in an emergency fund, allow some fun discretionary spending and make saving an integral expense every bit as important as rent or food. Once a budget is in place, cutting costs and maximizing savings can take precedence. Almost everybody spends more than they need to and a little careful consideration can usually turn up avoidable (or reducible) expenses. Saving $50 a month is not going to make anybody a millionaire (unless they can hang on for their 1,667th birthday), but every extra dollar prudently invested can multiply the value of that extra $50 many times over. “We simply want the advantages of financial security and a higher standard of living.”(Akst pg.345) Financial independence is all but impossible without taking some risks. The key here is "smart" risk - investing $100,000 in a risky biotech hoping to get a 10-bagger is not a smart risk, it's gambling. But doing a lot of research and spending $100,000 on a rental property in an attractive neighborhood is not nearly as risky, nor is

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