Posted on Thursday September 26, 2019

Financial Independence: How to Start Working Less or Retire Earlier

Cajun music legend Zachary Richard sang, "Travailler c’est trop dur" ("Working is too hard"). The words may be his, but the sentiment is universal. Working less, living more and finding greater fulfilment: this is what people are increasingly seeking to achieve. But how do you continue paying our bills if you slow down to enjoy life more? Changing your consumer habits and your relationship with work and managing your money can help you make the leap to financial independence.

So what is financial independence?

Millennials strive for it, baby boomers are fascinated by it, and everyone dreams about it, but what exactly does financial independence mean? A clue: financial independence doesn’t mean being able to dine at fancy restaurants every night or having more money in your bank account than some small countries.

Financial independence simply means not having to work to support yourself. Working then becomes a deliberate choice based on your personal interests or aspirations rather than on need.

So, who can achieve this kind of prosperity?

Do you need a voice like Celine Dion to make that kind of money? Before you rush out to sign up for singing classes, you should know that financial freedom is within everyone’s reach and that there are logical steps you can follow to achieve it. You may think that this sounds like wishful thinking, but in fact it’s very doable if you plan effectively, invest the necessary time and make a few concessions.

Turning your life around and working for you instead of others

Like a donkey chasing the carrot or a hamster on its wheel, do you ever feel like you’re running after nothing? The labour power you expend every day to earn your pay belongs to you, and you can choose to use it differently. By rethinking your relationship with money so that it is serving you instead of the other way around, you can learn to take control over your finances.

Starting up a business: Power and financial freedom

Have you been toying for years with a business idea? Running your own company offers many advantages beyond simply the opportunity to be your own boss. When you’re in charge of your own project, you get to make all the decisions and define the financial and operating structures. In this way, you truly become the engineer of your own success.

The personal loan as a springboard

A personal loan can be the key to getting through the period of instability that inevitably comes with launching a business. By taking time to identify which type of loan is best for you, you can set yourself up for success when it comes to turning this temporary indebtedness into a rewarding investment.

Organizations to guide you along the way

Working for yourself can often be a very lonely experience. This is why organizations such as Opportunities NB and Futurpreneur Canada are there to assist new business owners with building a network of contacts and finding support. Mentoring, training and government aid are just some of the resources made available to you as you focus on turning your dream into reality.

Understanding money and how to manage it

Do you wish you could read your finances like a crystal ball? Knowing how to interpret financial information and understanding some basic economic principles are the starting point for your journey to prosperity. The New Brunswick Financial Education Network can assist you in improving your financial literacy to use as a foundation for a framework of solid, lifelong financial knowledge.

Setting money aside: A winning strategy

Achieving financial independence depends greatly on your strategy for protecting and growing your financial assets. Setting money aside is an investment that will help improve your long-term economic situation. By contributing every year to an RRSP, you are building up funds to ensure you can stay the course toward your financial goals.

A TFSA is another sound investment vehicle you can use to save money in a tax-sheltered environment. This makes it an essential component of any short or long-term investment strategy.

Consume less, live better

It’s simple math: the more money we spend, the less we have to set aside. In our consumer society where we see ads and logos everywhere, spending less can be a major challenge. Thinking smart about what you truly need and looking with a keener eye at the goods and services available to you are the stepping-stone to a world where you can watch your savings grow steadily.

Taking a hard look at vehicles

The only type of vehicle that it pays to own is the collector car! The cost of purchasing, operating, registering and insuring a vehicle—not to mention all the other costs that go along with vehicle ownership—eats up a major share of most Canadians’ budgets. The CAA offers a highly useful online driving costs calculator to help people better understand the ongoing cost of owning and operating a vehicle. And although giving up our cars might be too big a step for many of us, what if we left them at home more often?

Next in the spotlight: The shopping cart

Translating the lyrics of well-known song by Acadian artist Lisa LeBlanc, “We’ll eat Kraft Dinner, that’s all we need.” Although not necessarily prophetic, these words remind us that we don’t really have to eat filet mignon every day in order to be happy.

Your grocery bill accounts for a very high share of your daily expenditures, and it can get out of hand if you’re not paying attention. Dominique Favreau, a forty-something on the verge of achieving financial independence, explains in his blog Se payer en premier (“Paying Yourself First”) that planning meals in advance, shopping wisely, stocking up on non-perishables and buying unprocessed foods more often can significantly reduce the household grocery bill. And the good news is that we can eat a lot more than just Kraft Dinner!

The political world we live in offers us a high level of economic freedom so that we can all build financial lives that reflect our personal and professional aspirations. All you have to do is define your goals and then set yourself up for success in achieving them. Whether family, friends, activities, travel, more alone time, a luxury lifestyle or just being able to treat yourself now and then, use whatever motivates you to start taking steps toward your objectives today.