On the way to being financially independent, there comes a time when you have a pretty good idea of how to get there.
You’ve looked at your spending and found places to cut back. You have a plan for how much you can spend. You put away at least half of your income in savings and investments. You have even set up automatic payments so you don’t have to think about money every month.
All of this is great! But then what? Basically, all we can do now is wait…
This is the hardest part for a lot of people. It’s the biggest problem they’ll face on their way to becoming financially independent: they won’t be able to wait. It’s annoying, and it can make you start to doubt yourself.
If you hit this wall, you might make big changes or even give up on your goal all together. It can happen when you’re just starting out or when you’re just a few years away from being financially independent.
Having the right mindset is an important part of your journey to financial independence, and one of the most important parts of this is learning how to keep going when you hit a wall.
By taking these five steps, you can get over impatience and self-doubt, which will help you stay motivated on the path to financial independence.
1: Understand the compound interest magic.
If you feel stuck at the start of your journey, remember that compound interest works slowly at first and then quickly.
A bad sketch, but a great picture!
On this simple graph, the straight line shows how much money you get back over time if you save it, and the curved line shows how much money you get back if you invest it. Even if you start out with less, you can still earn more over time.
If you invest consistently for a long time, your interest will grow exponentially.
One important part of this plan is that you shouldn’t check your accounts every day. Don’t worry about how the market goes up and down. If you check your net worth too often, you’ll go crazy. Set your investments and leave them alone as much as you can.
In the long run, you will get a lot of money back if you invest regularly. Wait and have faith in the process.
2: Learn more and improve.
If you’re feeling down as you work to become financially independent, try learning something new and getting some new skills.
Learning more about personal finance can keep you going by giving you new ideas you can use to improve how much you save or how you invest. Read books or watch videos on YouTube that interest you about money matters.
Learn new things in all parts of your life. If you feel like nothing is changing in your life, it’s easy to feel the same way about your journey to financial freedom. If you’re bored at work, it might be time to look for something new. You could also try something you’ve always wanted to do as a side job or hobby.
Throw yourself into something you love, even if it costs money. This will get you out of your head and out of the rut you’re in.
3: Break down your goals and celebrate the little victories
Independence from money is a big goal. It can be very hard to reach your financial independence number. Especially when you first start, it may seem impossible.
A great way to stay focused on your big goal is to break it down into small, manageable steps and celebrate when you reach each one.
It’s important to remember how hard you worked to reach each goal and to celebrate that. Plan to do something fun when you max out your 401K or IRA, get a raise at work, or make a certain amount of money from a side hustle.
To celebrate, go out to dinner or buy a bottle of champagne. Reward yourself with something you like, even if it costs a little more than you had planned.
4: Make your goals the most important thing.
Make sure you see your goals every day so you can remember what you’re working for.
Find quotes that make you feel good. Keep your goals in mind by changing the background on your computer or phone or putting a picture on your desk that will remind you to keep working toward your big goal.
It could be a picture of your kids or your partner, with whom you want to spend more time, or a picture of a place you want to visit when you have enough money to do so.
Seeing your goals every day will help you stay motivated and remind you of what you’re looking forward to when you retire early.
5: Have fun on the way
Step one is to remember that the best part is getting there.
It’s easy to get stuck in the future when you’re trying to get your finances in order. You might feel like you’re counting down the hours until the end of the workday, the days until Friday, and the years until you can finally retire and do what you want each day.
You can’t live like this. Don’t think about being forty, fifty, or sixty years old if you are just starting out.
The best thing you can do for yourself is to remember that you have a lot to enjoy along the way. Your time is your most valuable resource.
Appreciate your life and the time you have. Be thankful for each day and experience.
To summarize: Follow these five steps to keep yourself going on your way to financial freedom:
- Know that compound interest works slowly at first, but quickly in the long run.
- Learn something new every day, whether it’s about money, your job, or life in general.
- Break your goal of being financially independent into smaller steps, and celebrate each one you reach.
- Keep your goals in mind so you know what you are working for.
- Have fun on the way. Don’t forget that it’s the best part!
At the end of the day, being financially independent is a pretty simple mathematical goal. It might take more work to change how you act and think about money. One of the hardest parts of changing your mind is staying motivated. However, if you follow these five steps, you’ll be able to stay on the right path.