Reviving Financial Independence

All of us want to have financial independence and freedom now and then. Do you want to know the level of you financial independence? It is quite easy to find out. Just follow the instructions:

1. Define your average monthly expenses.
2. Define you accumulated savings and quick assets (things that you will be able to sell within 1 or 2 months)
3. Define additional receipts – money that is not earned with your regular work. This can be interest on deposits or copyright royalties, lease payments or return on investments. How much money will you be obtaining if you quit working and do nothing for a living?
4. Subtract your average monthly additional receipts from average monthly expenses. This will define your monthly money requirements if you quit working.
5. Now divide you total income on monthly money requirements. The result you receive is the level of your financial independence.

You may consider yourself totally independent if the result you received is 15-20 years. If the result keeps increasing it means that even being out of employment you receive more money than you spend. This indicates that the level of your savings grows.

If your financial independence equals to 2 or 3 months you are experiencing personal financial crisis. And this should set you thinking.

Google Yahoo Digg Technorati Delicious Slashdot