How To Become Financially Independent

We all dream of being able to pay all our expenses without having to work at a job or depend on others. Perhaps you even know someone who is financially independent. You may think, “Good for them,” but have no expectation that you also could have this status. You can, however, set yourself on the path to economic security. This is true whether you currently work for yourself or someone else, and whether you already have investments or not.

Working At A Job

Working at a job can have some advantages, especially if you choose the company well and know your own market value. For example, if you choose a company that pays well and rewards performance with generous raises, your salary may grow at a rate that is significantly higher than the rate of inflation. If you know how much your skills are worth going into salary negotiations, you are more likely to ask for and receive what you’re worth. The increased salary can provide opportunities to invest in the stock market, real estate, or other investments that can create wealth.

Salary, however, is not the primary way to build wealth when working in a 9-to-5 job. If used strategically, employee stock options can make you a multimillionaire, even as you work in a $60,000 a year job. Financial independence through stock options begins with knowing which company’s options will earn you the most money and seeking a job there. The next step is to negotiate for as many options as possible in your compensation package. Finally, learn or seek advice on the best time to exercise those options.  If you make the right choice at each of these steps, you can easily become financially independent.

Getting a job at a startup company is one way to have career advancement and, potentially, excellent stock options. If this appeals to you, research the best startup jobs and apply for work with those companies that potentially will provide you with the best future.


Another way to become financially independent is to start your own company or invest in one being started by someone else. A successful startup can provide a significant retirement; however, it requires that you give up equity that you could invest elsewhere. For this reason, you will want to weigh the potential benefits of the startup against those of other investments. You can invest in startups in several ways: directly through a local company, through privately managed startup funds, or through crowdfunding platforms.

Successful startups are built around providing a solution to a common problem. If you are starting one yourself, consider what problem you will solve and how. Develop a solid business plan and a prototype of your product, if applicable. If you are investing, review the business plan, other documents, and prototype carefully before turning over your money.

Many startups succeed because of their technology; for example, these five Seattle startups. If you are starting your own company, you will want to hire or partner with a good startup CTO, unless you have these skills yourself. If you are investing, choose those firms that have an excellent C-level staff, especially the CEO and CTO.

Extra Income Streams

You can also build wealth by establishing income streams beyond your day job. One example is a side business. Side businesses can begin around a hobby; for example, sports, photography, gardening, or fashion. Think of problems within these industries that you could solve or needs that you could meet with your own unique skill set. For example, if you like photography, could you earn extra money photographing weddings on weekends? If you like gardening, could you do landscaping on the side?

Whatever type of side hustle you choose, develop a plan. As part of your plan, consider how much money you will need to earn to make this venture worthwhile. Decide who your potential customers are and how you will reach them.

One way to reach potential customers is through an attractive, well-written Web site. To enable folks to easily find your Web site, you’ll need to understand and implement SEO. SEO strategies include choosing appropriate keywords, writing solid meta title tags and descriptions, and building a backlink strategy. What are meta title tags? They are titles displayed on search engine results pages. What are meta descriptions? They are short summaries (no longer than 160 characters) of the page’s contents. What are backlinks?  They are links your Web page receives from others. A free SEO tool can help you evaluate your Website and make any necessary improvements.

Protect Your Wealth

It isn’t enough just to earn money through jobs, investments, startups, and hustles. You have to hang onto it. One way, of course, is to carefully budget so that you don’t overspend. Another way is to avoid unsafe investments. A third way is to diversify. Diversification means that you don’t depend too much on any one investment or idea for all your income. Diversification helps you because if one type of investment performs poorly, the odds are that another type will perform well. For example, a startup may perform poorly for the first few years, but, you will not be hurt financially if your stock market portfolio or your side hustle are performing well. You also want to insure assets such as real estate in case of theft, vandalism, or damage from fire or wind.


You don’t have to sit on the sidelines watching other people create wealth for themselves. You can become financially independent as well. If you take some steps now, you can retire soon to enjoy your passions, without having to worry about money.