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Financial independence takes hustle. It takes sacrifice. It takes thinking outside of the box and going against the norm.
Living well within your means is required. Growing your income is too.
In order to become financially independent, you must do both – keep your expenses to a minimum while maximizing your income. Doing each of these will increase your net worth.
The problem though comes with the amount of time it can take to grow your income. Getting a second job? Yep … takes time out of your day.
Building a side hustle? I bet you will be putting in a bunch of hours to get it earning income.
So how can you get ahead, since there are only so many hours in a day?
It is simple … the income you have leftover after expenses MUST be used to generate even more income.
Your income needs to compound into more and more and more income in order to really get ahead.
Put Your Money to Work for You
Guess what my absolute favorite thing in the world to buy is?
Nope … not a car or clothes or the latest electronic gadget.
My favorite things to buy are dividend stocks. I am addicted to buying them and do so at least once a month.
Provided you buy stocks from quality dividend paying companies, there is really not much to dislike.
You see … these dividend stocks immediately go to work for me and my family as soon as we buy them. They go to work earning more income.
Just last year (2015) these stocks earned our family an additional $1,475 in income. That is not enough to retire early on just yet … but it is a start.
And guess what we did with that extra income? Yup … we used it to buy more dividend stocks!
By reinvesting our dividends for over the past 8 years and adding new money to the market – we will come close to earning $2,000 in extra income this year (2016).
Repeat the Process
The path to financial independence is rather simple if you think about it.
Spend a lot less than you earn.
Continue to grow your income.
Invest the difference.
Repeat the process.
That is what we have been doing for years. It takes sacrifice. It takes planning. But it isn’t impossible and virtually anyone can do it.
Whether you are investing your income in dividend stocks, real estate, or your business – the key is to keep repeating the process.
Keep reinvesting your profits. Keep putting your money back to work for you.
That is what we have been doing with our dividend income as well as a portion of our regular income. It may seem slow at first … and it is.
But overtime, your income will grow through compounding interest.
It can be hard to get ahead with your personal finances. If you are looking to become financially independent … then you will need to do a couple things.
First, you need to make a choice to live well below your means. You need to cut back where it makes sense to save more of your income.
Next, you need to take the steps to increase your income. Hustle your butt off!
The amount of dollars you have leftover between your spending and income MUST be used to earn more income. Put that money to work for you earning more money.
Finally, you must repeat the process. Take your extra income that you are earning (ie. dividend income) and put it back to work for you. Keep this compounding going for as long as you need.
Becoming financially independent may take time. Sacrifice. Hard work. But it can be done and isn’t that difficult if you think about it.
Do you put your money back to work earning more income for you?