Three Steps to Achieve Financial Independence

Are you going to stay in your job continue saving your 401(k) hoping that everything will be alright? Or are you going to take the bull by the horns and do something about it?

If you were told that you had eight years to complete all of your financial goals in life, what would you do? Would you run and hide? Move back in with mom and dad? Or would you stand and fight?

Yesterday, June 5, 2018, my birthday nonetheless, the government announced that Medicare will become insolvent much earlier than anticipated. They announced that Medicare will go belly up by the year 2026. That is just 8 years from now! Eight!!

While the intricacies of Medicare should be left for a completely separate conversation, most people know that Medicare not only funds a substantial amount of expenses for retirees, It also covers a wide array of expenses for many American families. This is a HUGE problem. One that we all saw coming.

What’s worse is that eight years after 2026, in 2034, social security is slated to become insolvent. Unless, of course, the government makes another announcement and tells us that the cheese has moved again, and we will be less secure than we thought we were even just a year ago.

With this in mind, the question again, is, what are you going to do about it? Are you going to stay in your job continue saving your 401(k) hoping that everything will be alright? Or are you going to take the bull by the horns and do something about it?

For my family and I, we are planning and are doing something about it right now. While I cannot tell you specifically what your exact path may be, what I will tell you is this:

You Need a Financial Education…and Fast

Get educated. Seek financial education from the best sources. Build inner circles of financially successful people and learn from them. Read books, podcasts, go to trade events & learn from the experts. Something amazing should happen. You will gather crucial information to help grow your net worth & protect your family from the ensuing onslaught of insolvency and government abuse.

Build a Plan & Take Action

Our education system has done a poor job of teaching us that it’s OK to make mistakes. One of my favorite authors, Tim Shiner, says that he’s willing to step off a curb, but not step off a cliff. Take calculated risks and move forward. You either learn or win. And both outcomes are good in my book. However, I’d rather be winning. Last week I was listening to a podcast with Kevin O’Leary, one of the superstars on the popular hit show, Shark Tank. At one point in the podcast he said if he’s picking a winning business at least 51% of the time then he’s winning in his book. I think that’s interesting perspective.

Set a 3-month goal to take an actionable step to build your net worth. Invest more, reduce debt, start your business, something. This brings me to my last point.

Seek to Become an Accredited Investor

I’ve written and discussed about the accredited investor status at length. While the sun may not shine any brighter & the air won’t smell any cleaner, achieving accredited investor status means that you join an exclusive group of Americans. Less than 11% of the country hits this standard!! What is it?
An accredited investor is a person or entity that can deal with securities not registered with financial authorities. Basically, you’re considered a “big-boy” and can afford to make mistakes. You can satisfy the accreditation requirements through income, net worth, asset size, governance status or professional experience. For most individuals, accreditation can be met through the following:

  • Demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income. An individual must have earned income above the thresholds either alone or with a spouse over the last three years. The income test cannot be satisfied by showing one year of an individual’s income and the next two years of joint income with a spouse. The exception to this rule is when a person is married within the period of conducting a test.
  • A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse, excluding their primary residence.

Chances are, if you are seeking to become an accredited investor, both through income & net worth – then you should have sufficient income and assets to withstand losing crucial benefits like Medicare & social security. How should you approach this? Start by reading some of our other articles & give us a call today.

This article originally appeared on Davis Financial, LLC. Read original publication here.

About the Author

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Joseph A. Davis, EA, CDFA®BFA™


With over 16 years in the financial services industry, Joe knows his stuff. Cursed with the desire to be a serial entrepreneur - Joe is a real estate investor & managing partner for Davis Financial LLC, Utah Divorce Services and Davis Tax & Associates. He most recently became the director for Find a CPA Today. Joe is an Enrolled Agent, EA, & CDFA®, BFA™. He also holds FINRA licenses 7, 66 & 24. When Joe isn't trading, looking for new real estate investments or obsessing over his work - you can find him at home, playing with his children & probably mowing his lawn.

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