Your Money: Eight steps to walk the financial independence path – The Financial Express

To be sure, list down all your assets like bank accounts, investments, house and property, valuables, and your liabilities. The difference between what you owe from what you own is your net worth.

By Urvashi Varma

Financial independence refers to being in possession of sufficient money to sustain the current lifestyle for an indefinite longevity. The first step towards attaining financial independence starts with assessing ones net worth or current financial position.

To be sure, list down all your assets like bank accounts, investments, house and property, valuables, and your liabilities. The difference between what you owe from what you own is your net worth.

To achieve financial independence the net worth should always grow. A financial plan having lifetime goals or short-term goals will help achieve this. There are two basic principles: spend less and earn more. The greater the gap between earnings and spending the faster the net worth grows.

Financial independence is misrepresented with higher income. The more we save the easier is the path to financial independence.

Takeaways on financial independence:

The journey towards financial independence starts now because the best time to start saving and investing is always right now.

The writer is assistant professor, Finance, Amity Business School, Noida

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Your Money: Eight steps to walk the financial independence path - The Financial Express