When the architects of Independence embarked upon the lengthy process of transitioning Jamaica from a crown colony to a self-governing state, they first had to have an image in their minds of what that political freedom would look like and then craft a plan for how it would be procured. Likewise, achieving personal financial independence starts with having an image or a vision of what you would like to accomplish and a well-thought-out plan on how you will achieve it.

Among other things, the road to financial independence requires time, effort, and a strategic plan to lay a solid foundation for building wealth. Key wealth-building areas such as budgeting, debt repayment, saving, and investing all play a critical role in securing personal financial independence.

What is financial independence?

These days, there is much talk about financial independence, and achieving it is a goal for so many people. A survey at the beginning of the year done by Empower Financial Services showed that 67 per cent of Americans said that achieving the milestone of financial independence is important to them. While the data is not available for Jamaica, it is probably safe to say that this is applicable to most people around the world. If you are one of those people, before you can achieve financial independence, you must first understand what it is; after all, it helps to know what exactly you are going after when you say you want to become financially independent. What is the specific picture you want to paint for your life and what it will look like when you attain financial freedom?

Many of us think of financial independence as simply having enough money to retire, but in reality, financial independence is so much more and can mean different things to different people at various stages of life. However, in general, to say you are financially independent means having sufficient personal wealth to live without needing to work actively for basic necessities. It’s about having the freedom to make choices without being constrained by financial pressures. Achieving this state allows you to focus on what truly matters to you, whether it’s spending more time with family, pursuing passions, or contributing to causes you care about. Therefore, it’s much more than just leaving your job and stopping work. Think of financial independence as a goal that requires careful planning, transitioning, and making lifestyle changes that align with your personal goals and values such that you are able to accumulate enough resources to last the rest of your life.

The Challenges of Achieving Financial Independence

For all its allure, financial independence is a goal that eludes so many people. Some think that it sounds better on paper, but that, in reality, it is an unachievable goal before retirement. In fact, so many retirees are finding they are returning to the workplace, not because they want to but because they have to. The truth is that achieving financial independence is a process. In much the same way that the journey from Emancipation in 1838 to Independence in 1962 was a process, a long and arduous one, so too is achieving personal financial independence. Success is not overnight; it comes with careful planning, execution and commitment. Therefore, to become financially free, you must have good debt management, build a safety net of savings, and create enough passive income — through investing or business ownership — to pay for your current and expected future living expenses. However, this journey is often complicated by the pitfalls of life such as being in excessive debt, financial emergencies, poor impulse control, and an over-reliance on credit. Notwithstanding, other challenges like the increasingly high cost of living can keep you from reaching your financial objectives. So, how to get the train moving on the path to financial independence?

•Start by making a strategic plan. Financial independence requires a commitment to budgeting, saving, investing and steadfastly keeping debt in check. Know what your financial objectives are. Write them down and the timelines you expect to be able to meet them. This will inform you of the level of income you need to be generating from your savings, investments, and business interests for your time horizon.

•Assess your current income. Political independence from the British could not have been achieved by mere positive thinking. Becoming financially independent will not come that way either. Oftentimes, people do not activate a plan for wealth building because their current financial status is simply too bleak. If you want to eventually not have to work, the fact is you need to be earning well now. This might mean living below your means such that your current budget leaves room for savings and investment, paying for insurance, and of course paying off your debt.

•Stay educated and adaptable: Education is a powerful tool for economic advancement. The financial landscape is constantly evolving. Stay informed about economic trends, investment opportunities, and personal finance strategies. Be willing to adapt your plans as needed to stay aligned with your goals.

•Increase your income: Look for opportunities to boost your income, such as side hustles, freelancing, starting your own business, or pursuing further education to advance in your career. Additional income can accelerate your savings and investment potential.

•Improve financial literacy: Once you are on the track to increasing your financial value, you can improve your financial literacy, meaning you will be able to make critical decisions about the tools you will need to achieve your financial independence objectives. So, rather than simply saving, you can actively begin to build wealth by investing for the future. You can now seek out income-producing assets that have economic value and are needed to make your money work for you. These resources can provide current and future benefits through income generation and capital appreciation. These range from high-yielding certificates of deposit (CDs) to dividend-paying stocks and bonds, and, importantly, real estate, which can generate significant cash flow, and can even hedge against inflation.

Achieving financial independence is a journey that requires commitment, discipline, and resilience. By understanding your current position and taking proactive steps, you can navigate the road to financial freedom, just as Jamaica navigated its path to becoming an independent nation. Embrace the journey, make your money work for you, and look forward to a future where you have the freedom to live life on your terms. Seek the advice of a financial consultant and start investing. An NCB wealth advisor can help you customise a plan that can put you on the path to financial independence.