I've been searching about financial independence lately. At first, I thought that having more money is the only thing we need for financial independece, but I was wrong.

 

This is not just about money. This is about your end goal. Why do you want to retire early? Do you think that you deserved it?

 

If you really want to retire early here is a simple formula according from most of my research minus the bullsh*t:

 

1. Increase your Income

2. Lower your Expenses

3. Accumulate Assets

4. Avoid Liabilities

5. Build your Cashflow

 

These steps might be familiar to you if you are also reading some of Robert Kiyosaki's books such as "Rich Dad Poor Dad" and "Rich Dad Cashflow Quadrant"

 

These steps are very simple but it may not be easy for some people, specially most of us were trained by society to buy more crap that we don't need and we will keep on buying those crap even if we no longer have money.

 

By the way, you must also eliminate your debts first, if you have any. There are two great ways to do this but you can only choose one. One is the Debt Snowball Method and the other one is the Debt Avalanche Method. 

The Debt Snowball Method focuses on paying the lowest interest debt first and then snowballing to paying the highest interest debt.

The Debt Avalanche is the opposite of this. It suggest paying the highest interest debt first then followed by lower interest debts.

 

Psychologically, the debt snowball method is more effective but the avalanche method is more efficient mathematically. I recommend doing the avalanche method if you can so that you can save more money, although always consider psychological factors in your finance journey.

 

I will be posting more about this kind of topic because I cannot cover all of it in one post but I hoped that this can help you know that you can be financially free too.

 

If you are looking for resources I suggest you read Mr. Money Mustache blogs and MAD Scientist Financial Independence Podcast, both of these really helped me a lot.