The Balance offers some interesting advice on “How to Become Financially Independent.” While most of the advice is straightforward and offers a take on wealth that you don’t often hear, the last bit of advice about investing more in your children who are the most productive might seem harsh some some. Overall, you need to consider how you invest your time and your money if you want to achieve true wealth.
Don’t confuse income with wealth. Since you can get more if you make more money, many of us think that making more money is the same as being wealthy. However, as the article points out, the way to gain wealth is to not spend as much as you make.
Time really is money. The article breaks it down this way: “How do you know when you are truly wealthy? When you have complete control over how you spend your day. No matter how much money you make, unless your days are spent doing the things the really make you happy — the things that you enjoy so much that you would pay to do them — and you have control over your time, you aren’t wealthy.”
Don’t just pay taxes, plan for them. Many people dread a certain date in April, putting off paying their taxes and sometimes even getting an extension. You may be not able to change jobs right away but the article points out that it is not easy to accumulate wealth when most of your income is taxable. Those who are able to get income from property, capital gains, tax-advantaged investment accounts
In addition to pointing out that the right investments can decrease the amount you pay in taxes, the balance also points out that “you should do everything you can, within reason, to fully fund your retirement plans, as well as to focus on how your seemingly small decisions help or hurt tax planning.”