Q:

How can you become independently wealthy?

A:

Quick Answer

The key to becoming independently wealthy is making smart investments that provide passive income, which is reliable income that doesn't need day-to-day management. These investments can take the form of stocks, real estate or business ownership.

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Full Answer

Making wise investments requires a great deal of research. People who hand over their money to companies expecting they will invest it wisely on their behalf sometimes find they lose everything. To become independently wealthy, people must take some time to learn how to invest, how to handle investments during times of economic disruption and when to let investments ride.

A vital element of becoming independently wealthy is finding money to invest in the first place. This can be done by cutting back on regular expenses so as to create a positive cash flow. The "extra" money generated by minimizing budgetary expenses is then available for passive investment. Any asset that produces income can be considered an investment; the best investments are those which the investor understands well.

As investments start to produce a stream of regular income, the pattern can be repeated, with further positive cash flow being channeled into increased investments. As this continues, eventually the passive income from the investments becomes enough to support the investor's regular budgetary expenses, making her independently wealthy.

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