Video:8 Steps to Financial Independence

SHARE ON                

Transcript:8 Steps to Financial Independence

Hello, I’m Wealth Mentor Linda P. Jones of LiveWealthyAndSmart.com, here today on behalf of About.com to share with you my 8 steps to financial independence.

Financial Independence Start With a Wealthy Mindset

The first step to financial independence is to have a wealthy mindset, and that involves 3 parts. The first part is to make the decision to become wealthy. The second part is to have gratitude for the things that you already have. And the third part is to have the positive expectation that you will receive the wealth that you desire.

Step two to financial independence is to save a nest egg. That means, pay yourself first, and take 10% of everything that you make and put it into a separate savings account. That way, before you’ve paid any of your other bills, you’ve paid yourself first, and you’re sure to save the money that you’ll need to eventually invest someday.

Find a Mentor Who Already Established Financial Independence

The third step to financial independence is to find a mentor. Finding a mentor entails finding someone who’s done exactly what it is you’re trying to accomplish. Whether that’s by watching television, reading magazines, reading books by people who have become wealthy, you need to follow people that have already done what it is you’re trying to accomplish. That way you’ll have guaranteed success.

The fourth step to financial independence is to invest in a money engine. A money engine is a vehicle that grows your wealth. Building wealth requires that you select the right investment. The mistake I see most people make is they invest in past investments that have done well but are not currently doing well. What you need to do instead is realize that wealth moves in cycles and select the investment trends that are doing well now and will continue to do well in the future to build your wealth.

Use a Wealth-Building Formula

The fifth step to financial independence is to compound at a high rate. There’s a wealth-building formula that I use. It’s the amount of money you have, times the time you have to compound, times the interest rate you can compound at, equals how much wealth you can build. So if you don’t have much time, and you don’t have much money, it’s very important that you have the highest rate to compound because that will determine how much wealth you’re going to build.

The sixth step to financial independence is to leverage wisely. Using other people’s money is an age-old way to build wealth. Even the founders of Google used money charged on credit cards to start their business and create their multi-billion-dollar wealth.

Protect Your Wealth While Being Generous to Achieve Financial Independence

The seventh step to financial independence is to protect your wealth. Many people understand that using leverage can be helpful to build wealth, but they don’t understand that once you have built your wealth, you need to pay off that debt in order to protect your wealth and keep what you’ve built.

The eighth step to financial independence is to give and create your legacy. Giving money to the needy will bring more money your way, and make you feel richer, and give your life more meaning. Thank you so much for watching. For more information, visit us online at About.com.