5 Steps to Financial Freedom

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Our most valuable asset, by far, is time. Money, though less important, gives us the freedom to spend our time the way we want and to give our lives meaning.

How can you achieve financial freedom? A new book, My Money Journey, edited by Jonathan Clements, founder of the financial website Humble Dollar, describes how 30 people are pursuing or

achieved financial freedom. I personally could relate to many of these journeys and offer my own advice for you to be financially free.

While the paths are different, every one includes two basic ingredients — living below your means and investing the savings well. So here are my thoughts on the specifics of each as well as

my advice on how you, too, can achieve the independence to do what you want with your life.

Many people think that being a great investor is the key to being wealthy. Yet the ability to save is the more important ingredient. You could be a better investor than Warren Buffet but, if

you can’t save, you’ll likely never reach financial independence.

I’ve found that some people inherently are frugal while others are spendthrifts. It’s actually very hard to change one’s behavior on either extreme. People can and do change, however, and

there are many stories of those starting later in life and then completing the journey. Five key steps are:​

1. Keep your fixed costs low. You can decide how much to spend on a vacation or how often to eat out. But other costs are fixed, such as rent or mortgage payments, property taxes, insurance

and utilities. The 1996 best-selling book The Millionaire Next Door revealed that the wealthy don’t typically live in the largest houses in the most prestigious neighborhoods.