If you’ve been reading my articles you now surely know that the path to wealth and freedom is a simple one – which is not to say it’s easy! 99% of it is being able to earn, save and invest.
Matt over at Distilled Dollar – one of the best personal finance sites around – has just published a guest post that I wrote, talking about how the single best thing you can do to become financially independent is to increase your savings rate. Here is an excerpt from the post:
We all have “light-bulb” moments along our path towards financial independence when everything suddenly clicks into place and we acquire a new level of understanding. From learning that money can actually allow us to retire decades early, to experiencing the first returns from our investments. For me, the biggest moment was realizing that it all comes down to the savings rate.
Simply put, having a high savings rate will mean you’ll be able to become financially independent pretty quickly. The beauty of this is how absolute it is; a 50% savings rate will make a minimum wage earner financially free as quickly as it will a multi-millionaire. This is exciting (I admit I may have a slightly alternative
definition of exciting!) for two reasons:
- Anyone, at any income level, can realistically become financially independent.
- Accelerating financial independence boils down to increasing this number – nothing else matters as much.
When you’re armed with the knowledge that all you have to do is increase that number by 1% at a time, the gargantuan task of becoming financially independent suddenly becomes a lot more manageable.
If you want to read the rest of the article (and I think you’ll enjoy it, as I’m particularly proud of it!), make sure you check out the full article over at Distilled Dollar.
Have a great weekend everyone!