How do you measure financial independence?

What does financial independence mean?

Everybody talks about being financially independent. Everyone seeks financial independence. Yet, how many definitions for financial independence are there? Probably about as many as there are people. Financial independence means different things to different people.

To some people it means having a good-paying job that allows them to support themselves. To others, financial independence means having enough money to enable them not to have to work. To others, it might means something in between.

Regardless, financial independence is something almost all of us strive for sooner or later. Independence is good. It means not having to answer to anyone but ourselves, and maybe a boss or two, but otherwise, financial independence is a worthy goal to strive for.

The foundation of financial independence for most of us is not just money, but money in the form of income. Most of us do not have an endless supply of money to draw from whenever we need it, so we must have some type of income to draw our funds from.

The simplest way to look measure financial independence is to have an amount of income that exceeds your needs. In other words, when your income coming in every month exceeds your expenses on a consistent basis you can consider yourself financially independent.