Financial independence is a lifelong goal of many. You want to buy a home and pay it off, you want to own your car outright and you want to live debt free. You want to owe as few people as possible. And while it’s almost impossible to avoid paying any monthly expenses, you can make them as minimal as possible. There will always be utilities, groceries, gas, and insurance to pay for, but you don’t have to owe anyone anything else if you don’t want to. It’s called financial independence and it’s what you should strive for now – not later. Sure, you might consider not having any credit card debt a major achievement – and it is – but what about your house and your cars? You can pay them off in no time at all if you are careful, and we believe that you can gain financial independence in as little as five years if you really want to.
Let’s say that you have a $250,000 mortgage and $1000 per month in other expenses (gas, groceries and utilities and insurance). Let’s say your monthly take home pay is around $7000. That leaves you with $6000 per month to set aside, spend or pay off your debts. If you put just $5000 of that money into your mortgage each month and the other $1000 into savings, you’ll save $12,000 per year and you’ll pay off your mortgage in just over 4 years. That’s right; 50 months (give or take since we are not even going to pretend to account for your taxes and your interest rates. We are just focusing on a $250,000 mortgage prior to interest and things of that nature).
It might feel tight for now, but in just over four years when you have no mortgage and you have a savings account with more than $50,000 sitting in it, you’re going to be quite happy and very well off. You’ll be able to invest in other properties, save more for retirement and make your life a lot more welcoming and happy.
Of course, while we think you can pay off your finances very quickly, you might have a different financial situation. You might make less, owe more or a combination of both. But if you buckle down and spend nothing more than you absolutely have to, you will be able to acquire financial independence in no time.
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