The Surprisingly Fast Way to Become Financially Independent (5 Powerful Levers)

Many people dream about financial independence. A lot of us take steps towards it at different parts of our journey. Sooner or later we achieve degrees of it as long as we don't give up. Along the path I discovered a number of levers which make all the difference in avoiding mistakes and helping us become financially independent faster.

By adjusting even a single of these levers we will see tremendous improvement in the speed of our journey to financial freedom. But truly mind-blowing results can be achieved when we combine them together, as we'll see in a few moments.

1st Lever: Living Below Our Means to Become Financially Independent

Spending less than we earn is really powerful but can be hard to implement once we've gotten used to a certain lifestyle. We have two basic options:

• Reduce our spending
• Increase our income (without increasing our spending)

Most of us would prefer the second option, but let's consider reducing our spending first. This can be done by downsizing a bit. We can postpone the purchase of a new car for example, as long as the maintenance bills of the current one are less than a new car payment would be. Reducing Starbucks, Amazon, dining, streaming memberships, etc. can be another way to help our budget out.

The only area I would not skimp on here is health related expenses like food, doctor visits, and gym memberships (if we use them).

One thing I really recommend is committing to keep our spending mostly the same after the next promotion or when we switch to a better paying job. This virtue is called moderation and will lead to a growing amount of cash flow we can sow into our assets column for savings & investments.

If we think the next pay raise is too far off or not significant enough, we can also consider a side hustle. I utilized this myself for a while by creating a simple profile on upwork.com with a description of my skills and an hourly rate which provided a good value for both sides.

Once I had the first freelancing tasks & projects under my belt with a positive review, I increased my hourly rate gradually over the years until it was 4-5x of what I started with. Upwork and related sites will promote your profile at no extra charge, since it's a win/win/win for all parties involved.

2nd Lever: Using Low Interest to Pay Off or Earn High Interest

Maybe we have credit card debt with an interest rate > 10% or a car loan with significantly higher rate than our mortgage. Credit Card balances can oftentimes be transferred to a card with 0% interest for 12 months or we can consider a personal loan with lower interest to help us pay the balance off faster.

Refinancing our mortgage at a lower rate or getting a low interest home equity line of credit can help pay off car and other loans with higher interest rates. Please make sure not just to increase your debt here, but follow through on reducing all balances with high interest rates as soon as possible.

When deciding between a mortgage with 15 or 30 year loan term I would recommend not just looking at obtaining the best rate. If the 30-year rate is significantly below the average return of a reliable index fund like the S&P 500 and you have 10+ years until your planned retirement, it is usually better to choose the longer term to have more funds available for investing.

We just need to prioritize paying ourselves first (by investing in cash-flow generating assets) before increasing our spending & lifestyle.

3rd Lever: Mindset Shift - Don't Work for Money

Smart people let money work for them instead of spending valuable time working for money. Time is our most valuable asset. We can always earn more money, but we can never get back the time we spent.

I recommend studying how to do this, having conversations with ChatGPT about it, reading books, attending courses, doing whatever it takes. The time you spend here will be one of the best investments you can make for your life.

Once we have a new perspective, it becomes much easier to take action steps towards the direction we want to go.

4th Lever: Create Passive Income Strategically

This leads us to the importance of creating passive income. Letting money work for you will result in money coming into your bank account while we work and while we sleep. It allows us to move from a 9-5 job to 24x7 income that does not cost our time.

Wouldn't it feel great to only accept a job because we want to, not because we have to in order to pay our bills? This is possible with passive income. It's okay to start small. We can build and grow it gradually.

For creative examples on how to achieve this practically, I would like to invite you to read two great articles we published on this topic recently:

• Building Wealth on Autopilot: The Best Passive Income Ideas for 2024
• Mind-Blowing Passive Income Ideas Most People Don't Know in 2024

5th Lever: Give Your Best Insights Away

We know good things come to us when we do good to other people. One of the most strategic and somewhat counterintuitive things we can do in life is to give our best insights away for free. We can do this in personal conversations, social media, blogs, newsletters, or video.

The opportunities are endless in the age we live in. Giving our best insights away helps us to build an audience. People who connect with what we share will wait for the next piece we have to give to them.

As this audience grows with our consistent generosity in sharing what helped us, we're creating opportunities for a return. People will sometimes just do something good for us we don't expect, like recommending us for an open job position in the company they work for.

This also creates opportunities to create and publish a short course or mini e-book. Our audience will usually not mind parting with some of their money to get access to something valuable that helps them get to the next level they're trying to reach.

Affiliate marketing, paid sponsored posts, and higher ticket offers like coaching are other options we can consider.

Your Breakthrough Moment: Mind-Blowing Results from Combining All Levers

By combining all five we dramatically increase the speed to reach (a new level of) financial freedom exponentially, like factors in a formula of multiplication:

1 x 1 x 1 x 1 x 1 = 1

If we leave all levers in their standard setting we will just continue to move forward at the speed of 1. But watch what happens if we manage to increase these levers by just 50% each:

1.5 x 1.5 x 1.5 x 1.5 x 1.5 = 7.59x

Now we're suddenly moving at more than 7 times the speed! Isn't that amazing. How much would that help you achieve the goals and dreams you've already started to give up on?

Let's look at what is possible if we double our efforts in each of these areas:

2 x 2 x 2 x 2 x 2 = 32x

Unbelievable - we're now moving at 32 times the speed we started with. This is what's possible when we invest strategically in all of these areas and become financially independent. We can't wait to hear your story on how this impacted your life and what you achieved for yourself and your family as a result.