Financial independence and retiring early is a dream for many, but all too often it may seem like a mirage – something that is too good to be true. However, with the right mindset, planning, and approach, most people can achieve financial independence – earlier than they think.

There are three key things needed:

Positive Mindset

One of the most important things required to achieve financial independence is having the right mindset. A negative mindset can be a self-fulfilling prophecy. Think of phrases like I’ll never be able to afford that, I’m not good with money, money doesn’t grow on trees, money doesn’t buy you happiness, or I’ll never be able to retire early.

Let’s use two people to illustrate why this is important.

Chris, has a negative mindset about money, whereas Emma has an abundance mindset.

They both buy an investment property with the plan to renovate it and sell it for a profit. They buy two adjacent (and identical) houses and do identical renovations. The market cools. When they put them on the market, they both find out that after all those hours spent painting, coordinating tradies, and landscaping, they haven’t made anything.

Chris drops his head and mutters something along the lines of I’m not good with money and at this rate I’ll never be able to retire early. He sells it regardless as he wants to cut his losses. He doesn’t try property investment again.

Emma looks at what went wrong. The price they paid was ok (it was the prevailing market price). It was a great renovation without being wasteful. It was just the market turned against her. She does some research and finds out that if she rented it, she would cover all of her holding costs. Instead of selling she rents it out for the next 2 years and then sells it once the market increases. She ends up making more than she originally expected and now has money to buy another one.

The point here is that when people with a negative mindset make mistakes or things don’t go their way, they will revert back to these negative thoughts. This will reinforce their belief that they’re not good with money, or they’ll never be able to retire early. The end result is they will achieve what they believe in.

Save and invest

The second and third most important thing is to save and invest this money wisely. Saving doesn’t need to mean you live like a pauper. There is no point in having lots of money and no memories.

Investment is all about balancing risk with reward. That said, you also need to be able to sleep at night. Don’t put all your eggs in the one basket. Don’t let greed derail your plan.

We specialise in helping professionals put together a plan that will get them to financial independence sooner with less stress.

If you are interested in discussing this with an independent adviser, book a chat via the button below or call 0417 034 252 or email

About the Author
Phil Harvey is an independent financial adviser. In 2017 Phil set up his company Construct Wealth to help clients best manage their finances so they focus on what is important to them. He is a founding member of the Profession of Independent Financial Advisers and a tax financial adviser, registered with the Tax Practitioners Board.

General Advice Warning
This advice contains general information. It may not be suitable to you because it does not consider your personal circumstances. Phil Harvey and Construct Wealth are authorised representatives of Independent Financial Advisers Australia (AFSL 464629)

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