Financial Independence

Topics: Investment, Personal finance, Bond Pages: 3 (902 words) Published: February 11, 2013
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 major decisions?  Here's a different definition - financial independence should mean the ability to live more or less as one wants to, within reasonable limits. It may not mean the absolute freedom to never work another day again, but it may mean the ability to quit a bad job, go back to school or start a new business without major sacrifice. Likewise, financial independence should mean the ability to deal with life's ups and downs without scrimping, sacrificing or going into debt. 

It is hard to fight for independence without allies. Financially speaking, that means assets that work for their owners and throw off cash. A savings account or CD is a really basic example, but a portfolio of dividend-paying stocks or a portfolio of bonds (or bond funds) can serve the same role. Without allies, bigger companies and corporations couldn’t have gotten nearly as far as they have today. This is why it’s important to work with other investors in order to have the financial capability to make bigger investments without sacrificing opportunities just because you didn’t have enough money.

Rental properties can throw off impressive amounts of cash flow not only paying for themselves, but throwing off cash above and beyond that. Writers,...
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