For many people, Financial Independence is a goal worth pursuing. You want to have enough money to support your lifestyle for good, without needing to work and earn any more money. But, for most, that’s no more than just a dream. So, can you achieve financial independence and how can you do it? Two main approaches to reach such independence are accumulating assets, (liquid and revenue-generating as savings, property, stocks, bonds, ownership of businesses, etc) and expense reduction to match your passive revenue streams. It’s a great start if you have an inheritance, highest paying job or you’ve picked the right investments.
But, we believe that creating a successful online business is one of the best ways to break free, especially if you start from scratch. Start thinking long term because it’s the way of accumulating wealth and achieving financial independence regardless of your income level.
The potential
In simple terms, by running your own online business you gain freedom from the earning restrictions of employment. You’re in control of your own destiny. Your opportunity to earn is only limited by the effort you put in.
So, what’s the secret? The simple answer is ‘it all depends!’ You’ve heard the stories of online start-ups going on to sell their businesses for millions. But, there are also plenty of failures. Just think back to the ‘dot.com revolution’ – boom and bust at its worst.
Related >>> Want to be an Online Entrepreneur? Prepare first.
Identify the right business opportunity
Unlimited opportunity to earn — that sounds great, but many other factors will influence your financial success. Get them right and you’ll be on the road to your destination of true independence.
You must start with the right business for the right market. What does the market really need? Have you got the solution that nobody else can match? And, has the market got sustainable long-term growth potential?
Long-term earnings like that form a solid base for reaching financial independence.
Manage business profitably
Your personal income must be generated from the profits of the business, so strong cost control is essential.
But, don’t forget part of your profits must be reinvested to achieve growth and the sustainable growing income you need for independence.
Choose the right form of funding
Unless you have big savings, you may need external funding to cover the start-up and ongoing operational and investment costs of your business. But, think long term because different types of funding will influence the degree of financial independence you can achieve.
Loan interest and capital have to be repaid out of earnings, reducing profits. And, different loan terms determine the time it takes to reach financial independence.
If you look for external funding, you may have to issue shares and pay dividends to shareholders — another cost to reduce your profits. Some investors may demand a large shareholding in return for the essential funds you need. Just watch Dragons’ Den or your local equivalent to see how and why investors generally aim for a bigger stake.
A larger external shareholding will dilute your ownership and level of financial independence because the shareholders call the shots.
Plan for the long-term
As your business grows, you will have important decisions to make about the level of profit you need to take to give yourself independence. Later, you might decide to sell the business to get the best return on your original investment.
Either way, you could reap the rewards you were aiming for.
So, in conclusion, financial independence is possible if you make the right decisions about the market opportunity, cost control, funding, and long-term strategy. Your success is then determined by the effort you put in.
Unless you have an inheritance, a very high salary, or you are loaded with cash and assets that bring you passive income, the only way to gain financial independence is to start a business.
The easiest business to start, with no doubt, is an Online Business, and our free guide can help you achieve that step-by-step. There is no need to educate yourself upfront since you will learn everything you need as you go.
