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8 Reasons You Won’t Achieve Financial Independence Before 70

Fact checked by John Boitnott

John Boitnott

John Boitnott graduated from UC Santa Barbara with a Masters Degree in Education. He worked for 14 years as a broadcast news writer for ABC, NBC, and CBS News where he covered finance, business and real estate. He covered financial news for SAP for four years. Boitnott is now working as a columnist for The Motley Fool where he covers personal financial and investing strategies.... Read More

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The concept of financial independence isn’t a far-fetched dream! Cultivating financial discipline right from your twenties or even thirties can put you on track with the FIRE (Financial Independence Retire Early) movement. However, most individuals fail to achieve financial independence before their retirement. Now, think that you are 70, and when you look back, you will repent of making expensive financial mistakes!

While financial independence isn’t a myth, few people actually achieve it. In this article, we have discussed 8 reasons preventing you from achieving financial independence not until you are late into your retirement.

Why wait till your 70s to achieve financial freedom? Strategizing your investments today can even fetch you this long-cherished financial freedom in your fifties or even your late forties.

What Does Financial Independence Mean?

The concept of financial independence implies that you don’t end up stressing yourself financially while making life decisions. On achieving financial independence, you remain financially resilient against whatever comes down your way. Being strategic with your savings and money-handling behavior can help you attain financial independence.

With financial independence comes the freedom to use your money however you like rather than being restrictive while spending. Most importantly, individuals achieving financial freedom early in their lives appreciate their mental peace.

When you have financial independence, you need not think twice before upgrading your kitchen countertop or throwing an additional party once in a while! You remain in complete control of your finances with this freedom to use your money at your discretion. 

8 Reasons Why You Can’t Achieve Financial Independence Before Your 70s

Financial freedom is the long-cherished fruit of your careful money-handling efforts. While most people crave financial independence before retirement, they often fall for common financial mistakes. This eventually delays their financial journey. Eventually, they must wait till their sixties or even seventies to achieve financial freedom.

If you associate yourself with any of these factors, you are not on track to achieve financial independence.

You Don’t Live on a Budget

Not having a plan on how to use your income happens to be one of the prime hurdles to achieving financial independence. Do you end up thinking about where your financial inflow went every month? Well, spending your money at will isn’t what financial independence is all about! Rather, you are on the way to a financial catastrophe!

The first step towards financial independence involves living on a budget. Failing to keep track of your expenses leads to consistent overspending. To keep your finances on track, create a budget and stick to it. The last thing to indulge in is to make impulse purchases.

Budgeting is the stepping stone when you are on the route to achieving your financial independence. The more you spend unaccounted for, the farther your financial goals will be! Consider using one of the popular budgeting apps to track your monthly expenses.

You Entertain Debts

Fast-tracking your way to financial independence involves getting rid of debts. Do you have student loans, credit card loans, or car loans where you shell out interest every month? Well, it’s time to prioritize your expenses and do away with debt from your life.

It might be seemingly easy to obtain loans if you maintain a decent credit score. However, why pay your hard-earned money as interest when you can put it aside in a savings account?

Have you considered how much you paid to banks as interest on different types of loans over the years? Considering the average personal loan rate to be 15% annually, you could have saved a sizable amount.

You should start by paying the highest interest-bearing debt first. For instance, credit card debts and personal loans bear the highest interest rates of around 15%-20%. Prioritize repaying these debts first. This is known as the debt avalanche process. Alternatively, you could also start by paying smaller loans first to build confidence.

Remember, among all your wealth-building tools, your income is the most potent. Unless you prioritize saving your income, your financial freedom may come much after you retire.

Try to clear off all types of loans early in your career. Before tackling this debt, save an emergency fund of at least $10,000 aside. This way, unforeseen situations won’t put you off the track of your financial independence journey.

You Aren’t Ambitious With Your Career

Let’s face it – you’d need a primary skill to make money. Consider the example of any rich person, and you’ll find they are an expert in their field of work – be it Dwyane Jhonson or Bill Gates. They all started with their primary skill and then ventured into other avenues as they saw growth. The key is to keep hustling.

Being too satisfied with your career may be why you couldn’t stay on a progressive track after your mid-30s. Often, your attitude towards a self-sufficient life turns out to be the culprit. Once you reach your 30s, try to look for exponential growth in your career. While you receive compliments from your co-workers and continue clearing your tax, it’s easy to get carried away. The lack of ambition in your career happens to be a key setback when you evaluate your progress toward financial independence.

From time to time, consider these questions as you stride ahead in your career.

  • Where do you want to see yourself professionally in the next 10 years?
  • What is the growth curve of your career?
  • Are you enjoying your professional life?
  • Do your professional incentives support your journey toward financial independence?

Retirement Saving Is an Afterthought

Do you often feel that retirement is a distant goal and you have plenty of time to think about saving for the golden years? Well, this thought itself can backfire for you! Start planning for your retirement today, maximizing your savings in the IRA and 401(k) savings. When you are young, it’s easy to put aside thoughts of saving for your retirement.

However, the ideal time to start stacking off funds for your golden days is during your 20s. When you first start earning, put aside at least 15% of your income for your future. Waiting for your 30s or 40s will simply deprive you of the power of compound interest.

Depending on your employment status, consider opening a traditional IRA or a Roth IRA. Both these accounts can be used to manage current and future taxes. For example, a traditional IRA allows deduction during the contributing years. The withdrawals are then taxed as income in the year you withdraw them. 

A Roth IRA is just the opposite. Under this plan, you can contribute after-tax dollars to grow over the years. The withdrawals are then considered tax-free. 

Both these retirement savings accounts are suitable for young people. Remember, you might probably be in a higher tax bracket by the time you retire. So, it’s much wiser to go with the Roth IRA plan. However, if you haven’t panned for enough income flow during retirement and feel you’d be in a lower tax bracket, go for a traditional IRA.

You Don’t Take Investments Seriously

Your financial literacy goes a long way in driving your investment choices. If you aren’t serious with your investments, you’re sabotaging your savings. First, financial experts advise being disciplined with your investments. Next, it’s crucial to diversify your investment portfolio. Try to develop a balanced financial portfolio and start investing as early as possible. Also, try to increase your investments by a specific percentage each year compared to the previous one.

Remember, the markets are dynamic and ever-changing. What is a good investment today might not be a few years down the line. Thus, it is essential to rebalance your portfolio. For example, if you observe a few years of inflation and slow market growth, you can lean towards safer investments such as mutual funds, real-estate and debt-based instruments. However, let’s say the conditions improve after two to three years. You can then look to invest more in stocks and commodities.

One of the effective ways to convert saving into a habit is to automate your investments through SIPs. Whether you save in a CD, high-yielding savings account, or any other annuity, make sure to cultivate discipline while you invest. A delay in starting your investment would reflect adversely on your journey toward financial independence.

You Are Afraid of Saving Money

Remember, just 42% of US citizens had around $1,000 in their savings account in 2022. The average savings account balance for Americans is just $4,500.

Stop perceiving your financial stature through the lens of society. The fear of ‘looking’ poor often sets people on spending sprees. Why not embrace a frugal lifestyle without indulging in an extravaganza? You can try and eat out twice a week rather than thrice. Being realistic on your mission to save money would take you closer to financial independence.

Remember, embracing a modest lifestyle doesn’t make you look poor. It’s all about prioritizing how you spend and where you shell out your money. It’s the snob effect that robs most individuals of their valuable savings. In the end, you will find yourself working late into your retirement when you could have comfortably retired at 56.

If you aren’t sure how to save money, here are a few tips to help you get started.

  • Bank on credit card rewards, free deals, and discount coupons while shopping for household items and groceries.
  • Plan your meals strategically by cooking them at home and thereby refrain from purchasing expensive dishes.
  • Likewise, brew your coffee yourself without visiting the parlor frequently.
  • Shop things second-hand as long as they are in usable condition.
  • Reduce energy bills by integrating solar appliances and other eco-friendly alternatives.
  • Download cashback and coupon apps to make the most of your savings.

As long as you live in a decent home, have healthy food, and put on respectable apparel, it’s fine to lead a humble lifestyle.

You Depend on A Single Source of Income

For people serious about achieving their financial independence, a primary job turns out to be insufficient. Try to supplement your income by tapping other income-generating avenues. There’s nothing wrong with walking in different shoes as you venture into business or work as a freelancer.

The best way to stream multiple sources of income is to have a side hustle or generate passive income. Investing in real estate is one of the tried and tested strategies to supplement your primary income. Here are some additional income-generating ideas that might be relevant to your profile.

  • Starting a gig
  • Providing online education
  • Affiliate marketing
  • Investing in dividend-paying stocks
  • Selling eBooks

With multiple income sources, you can stride ahead toward achieving your financial freedom with confidence.

You Didn’t Care To Have A Rainy-Day Fund

Well, you might already have an emergency fund in place. It’s easy to overlook the necessity of a rainy-day fund. The last thing you would want is to sabotage your savings if your house needs an urgent makeover or one of your appliances stops working. Besides having an emergency fund of $10,000, consider creating a rainy-day fund as your short-term goal.

What if you end up losing your job or are rendered disabled following an accident? It’s crucial to plan your rainy-day fund and use the amount diplomatically when needed.

Plan, Plan, And Plan!

From being methodical with your investments to being consistent in saving money, achieving financial independence calls for discipline. Unless you handle your funds like a pro, financial freedom may continue to be a myth for you!

If you are still in your twenties or thirties, you stand a decent chance of achieving financial independence before you retire! Plan your short-term goals by paying off your debts, and then create an emergency fund. Have adequate insurance coverage in place so that unforeseen incidents don’t mess up your mission toward financial independence. 


How Can I Be Financially Independent At 50?

Here are some effective ways to become financially independent at 50.

  • Take calculated risks while investing in the market.
  • Diversify your portfolio strategically.
  • Define your financial goals on different timeframes.
  • Have multiple income sources.
  • Invest in revenue-generating assets like real estate.

What Are The Seven Levels of Financial Freedom?

The seven levels of financial freedom are clarity, self-sufficiency, breathing room, stability, flexibility, financial independence, and abundant wealth. Start cultivating healthy financial habits early in your life to enjoy financial freedom.

How Do Rich People Build Wealth?

Financially successful people stick to their principles of wealth building. They are well-defined with their short, mid-term, and long-term goals. Besides, they are financially literate and can manage debt better than others. Prioritizing investments and savings and protecting their assets, they continue to enjoy a better value for their money.

 What Are Some Tips To Grow My Wealth Fast?

Firstly, try to excel in your career and embrace exponential growth. Next, start a business or have a few side hustles. Third, invest in revenue-generating assets like dividend-paying stocks and real estate. Clear off your debts and keep track of your expenses to make greater savings.

What Is The Ideal Age For Achieving Financial Freedom?

There’s no rigid norm defining the age to achieve financial freedom. Even people in their mid-thirties managed to save adequately for their lifetime. The faster you start saving and investing strategically for your future, the closer you move toward financial freedom. With the right approach, you need not wait until retirement to achieve financial independence.

Featured Image Credit: Karolina Grabowska; Pexels: Thank You!

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CEO at Due
John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

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