What is financial independence?
"Financial independence" is a term used to describe a person who does not have to actively participate in the rewarding work to cover costs. In general, such a person is a recipient of a passive income that can go through resources such as dividends, pension accounts or license fees. Financial independence is often the aim of retirement for many people, but some financial experts suggest that this goal is for many people slipped out of the achievable empire.
A person who is financially dependent must actively seek sources of income to pay off regular debts and expenses. A young graduate of a university without an investment portfolio or savings is likely to have to work to repay expenditures such as rent and public services, as well as credit card debt, student loans and automobile or home payments. The amount of money that one needs to actively generate to meet the expenses is the amount to which it is financially dependent. During lifelong work, cautious impact, or career that creates PAntive income, many people seek to reduce their financial addiction until they are exempt from the requirements of active earning monthly or annual sum
Most financial independence is due to passive income. The reception is reported to be passive when it is generated from sources that do not require active and continuing work. There are many different types of passive income that people use to work on financial independence. Rent from rented assets, interest on shares and bonds and dividends paid to the owners of enterprises may be a source of passive income.
Royalty and residues are another source of passive income that can be used to create financial independence. People are paid license fees when they have created a copyright -protected material to which the rights own. In order to use the material legally, people must be authorized by IGHT and royal rank. Actors, writers and entertainerswhen they receive remnants for repeated performance of their work; For example, re -launching the TV program often leads to a residual payment made by the show creators. Successful creative artists can sometimes achieve financial independence by relying on license fees and remnants of their past creations.
Sometimes financial independence can be achieved by reducing costs. People in retirement may have certain sources of passive income, such as pension accounts or social security benefits, but may not be enough to cover the cost of living costs. Some people manage financial independence by changing their lifestyle to suit their passive income and assets through cuts. Loss of expenditure can often be compensated by reduced stress of complete retirement.