Financially Independent - Everything you want to know about getting there
Becoming Financially independent

How to Become Financially Independent

“I like working, why would I want to retire?”

“Financial Independence is a pipe-dream. You’ll never get there, so why try?”

“That’s only for the rich”

“If it was so easy, everyone would do it.”

Well, as it turns out, it’s not impossible to become financially independent.

In this article, I will show you exactly what the difference is between the Financially Independent (or financially free) and everyone else who is slaving away at their job. I will show how we achieve FI and how you can start your journey

…but first, I want you to watch this video. I can’t claim to have created it, but I love it so much because it truly captures the meaning of the phrase.

…and it all starts by having the right mindset. In this article, I’m going to show you:

  • Exactly what you need to do in order to take the first step toward financial independence.
  • The 6 steps you need to take in order to create those streams of passive income.
  • How to start your journey to becoming completely financially independent, regardless of your current salary or financial situation.

But first, I want to share with you a personal story…

BONUS: Get the free guide to the exact system I used to create a 6-figure passive income.

How I Accidentally Discovered Financial Independence and Retired in Only 4 Years

I wanted to be a professor. Yes, a Professor… My goal was to have a good job with great benefits and be well off. So, I was working toward that goal by attending a Ph.D. program at Clark University.

I also wanted to buy a home near my school. In that area, there are only small multifamily properties, so I ended up buying a triplex (known as a triple-decker up in Massachusetts). Since my goal was to be a “normal” person I figured I’d keep it for 3-4 years then sell it.

Then, one evening I heard a knock at the door. It was kind of late at night and it was a rough neighborhood so people didn’t really go out at night. Turns out it was one of my tenants there to pay the rent.

There are very few singular events in any person’s life that can truly be called “life-altering.” You might call it an epiphany or a paradigm shift. Whatever you call it, an entire life can be broken down into “before” and “after.”

As I collected the rent and sat down on my couch, the wheels in my head began to grind. Though the rent was a measly $500 or so, I realized it was the easiest money I had ever earned in my entire life.

I don’t remember what was on TV that night, but I do remember that by the time I went to bed I realized that life is so much better when money comes knocking at my door rather than me having to go earn it. I knew at that moment I would do real estate for the rest of my life.

It wasn’t long until I left the Ph.D. program and was in real estate full time.

Financial Independence is About Passive Income and Your Expenses

Financial independence is achieved once your passive income has exceeded your monthly expenses. That day I discovered passive income, but it took me years to figure out the concept of financial freedom. Earning money in real estate came easily to me, but I also liked to spend money and have nice things. Take a look at this graphic:

I was the person on the top – I had discovered passive income, but as I grew my income my expenses also grew. Honestly, I didn’t understand that financial freedom was only achieved when you control both sides of the equation.

What I needed to become was the person in option #2, where I grew my income, but also adjusted my lifestyle to achieve freedom.

Eventually, the concept of financial independence grew on me – I made some major life changes to get my expenses in check and since then I have been completely free financially. Since the end of 2015, I’ve been free from the need to work, free from stress, and free to do what I love. I was only 30 years old.

Just like Pablo in the video, I worked hard to create that passive income and to this day I have no regrets about leaving the Ph.D. program and the great salary and benefits that would go with it.

I took a lot of detours along the way and having a clear picture would have been helpful. In hindsight, I’m able to see the path I took, how I got here, and what I could have done differently. Here is the path I took:

The 6 Steps To Financial Independence

  1. Educate yourself. Education is key. You need to relearn a lifetime of bad advice.
  2. Make a plan. You are exponentially more likely to succeed with a written plan.
  3. Get your finances in order. You need to get your ‘financial house’ in order before you can be successful at investing.
  4. Build your first passive income stream. You need to create your first stream of passive income to snowball into more passive income.
  5. Buy your first investment property. Real estate is the most tried and true way to achieve financial independence. The hardest part is actually getting your first property.
  6. Grow your investments. Grow thoughtfully in a planned and diversified fashion to get to FI the fastest.

You’ll notice that “investing” is actually step 4. That’s because the preparation is the most important step of your journey to financial independence. You can’t build a house on a poor foundation and you probably won’t achieve financial independence without planning properly.

Step 1 to Being Financially Independent – Educate Yourself

It doesn’t take a graduate degree to achieve financial freedom. It doesn’t even take a bachelor’s degree. Honestly, anybody can do it.

Don’t be confused though, a formal education isn’t a prerequisite to becoming financially independent, but knowledge is a requirement. So, you must dedicate a huge amount of time to learning and growing.

Shortly after I discovered real estate as a vehicle to create passive income (and ultimately allowing me to become financially independent), I was deployed to Afghanistan – I was completely removed from life and society here and dumped on a mountain for almost a year. It turned out to be a great thing because I spent that whole year learning about real estate, investing, and a lot more.

That year helped create the foundation I needed to come back and get right into investing.

The problem with working is many people feel have the time to learn. When they do find the time, they are too tired to pick up a book and read. Let me just be blunt, find the time. Nobody can push you toward freedom except yourself, so you need to be motivated.

Some of my favorite resources are (some of the following links may be affiliate links, meaning I get a very small commission if you buy them):

Also, I’ve written over 100 pages on this website the help give the fundamental knowledge you need to get started.

Step 2: Make a “Financial Independence” Plan

It’s pretty well established that those with a written plan are far more likely to succeed than those without one.

The key to any successful plan is to think backward. It seems counter-intuitive, but it’s a well-established planning technique.

Essentially, you need to list your goal, then define the mandatory items you need to accomplish to hit that goal, then start filling in the blanks.

Planning for Financial Independence

You can learn more about business plan writing in this article on how to write your first business plan,

Your plan will help you avoid some of the biggest pitfalls when getting started. In my experience, people will either be too narrowly focused or have no focus at all.

Having Too Little Focus and Doing Too Much

This is a pretty broad category and it can mean a lot of things. I like to say that you can be successful in any area of real estate, just not in every area of real estate. Meaning, you can be mediocre at a lot of things or be an expert at a few things.

Basically, everything you do has a learning curve. If you do everything you’ll spend all your time learning and never reach an expert level. You may be the worlds greatest house flipper, but if you try to develop your own land it’s like starting all over again. So, don’t try to do everything, just get good at one or two things.

Also, you need to learn how to delegate tasks. This will help you focus on your one or two areas that you are an expert and allow someone else to help in other areas.

Look at this simple example: Imagine you are the greatest typist in the world and also a highly paid lawyer. You may start your practice both in court and doing your own paperwork.

You figure nobody can do your paperwork better than you can – you are the greatest at it. After all, if you want something done right, you need to do it yourself, right?

“You can be successful in any area of real estate, just not in every area of real estate.” – Eric Bowlin

So every day you spend 4 hours doing paperwork and 4 hours consulting or in court. You make a good salary as those 4 hours of consulting are worth perhaps $300/hour. So, every day you earn $1,200. Not bad!

But, you are spending 4 hours a day doing work that you could pay someone $15 per hour to do. In essence, you are sacrificing an additional $1,200 in income in order to save $60.

Don’t Settle for Less

A person who falls into the previous category can’t be faulted for being motivated. They are trying to save money, make more money, and get everything done. This section is for someone in the exact opposite situation – someone who is satisfied too easily and settles for less.

In the video, Bruno was satisfied with his cattle, home, and lifestyle. He worked very hard for what he had and he was satisfied with it.

You may be satisfied with a few hundred dollars a month to substitute your income. Perhaps one or two properties is all you really aspire to. But, I would challenge you to forget about that and focus on the goal of financial independence.

If your goal is to retire, then why are you settling for working? Pablo made a plan and stuck to that plan in order to achieve his dream of financial independence.

Like Pablo, you need a plan too.

Invest in Good Business Plan Writing Software

It’s true that anybody can write a plan in any word processor. But, if you haven’t written tons of business plans before then it can be overwhelming. I’ve written many business plans and I still find it useful to use software that helps guide me.

I personally use LivePlan. It collects information from around the country and allows you to compare your plan to the performance of similar companies in your niche. Also, you can track your progress over time against your competition.

Go check it out – I think you’ll love LivePlan too.

Find a software that you love and can work with, I just absolutely love how interactive it is. I even wrote a review of LivePlan.

Step 3: Before You Can Achieve Financial Independence You Need to GET YOUR FINANCES IN ORDER

I get a lot of emails from readers, and most people have great dreams and love to tell me about how they want to quit their job, build those passive income streams, and achieve the financially independent lifestyle.

When I start digging deeper, I inevitably find out they have massive car payments, credit card bills, student debt…

Debt is not inherently bad… It just means that you need to earn more passive income before becoming free financially. What is bad is when these debt payments override your ability to save and invest.

That’s why it’s so important to get your budget in check, get your debts paid off, and start saving/investing!

Look at it this way – who do you think can retire faster? The doctor with a million dollar house, 3 cars, and still paying off that 200k med-school bill or the laborer with no debt?

That laborer may only need a few thousand dollars in passive income per month, which is super easy to get. That doctor may need ten or twenty thousand per month to replace his income and pay all those bills.

The point is, it’s not about your income, but it’s about your mindset.

So, if you change your mindset, you can change your finances immediately and permanently.

Step 4: Build Your First Passive Income Stream

You’ll notice that this is step 4 and not step 1 to be financially independent because I believe that investing is like building a house – you need a strong foundation first. The first 3 steps are that foundation.

You don’t need one single source of income that fully replaces your income. In fact, most wealthy people have 5 or 6 different passive income streams. So, focus on building ONE, regardless if it’s just a few hundred dollars a month.

Growing your first stream of passive income can be difficult, just like Pablo, you may have to wait to get the reward.

There are probably hundreds of ways to start building those streams of income. Here are a few ideas:

  • Stocks & bonds
  • Limited partner in a business
  • Royalties on book sales
  • Advertising or affiliate sales on a website
  • Creating an e-course
  • Rental income
  • Referral income
  • …and so much more!

Oh yeah, don’t focus exclusively on passive income at first. Sometimes active sources of income can lead to future passive income streams. For example, a lot of TV personalities and talking-heads get book deals which help them to achieve passive income.

A more realistic example is to be a general partner in a business. After it’s up and running, you may be able to hire an executive to manage it so you can take a back seat and enjoy the income from it.

Just remember to focus your efforts toward something with an obvious path toward additional passive income.

Step 5: Buy Your First Investment Property

A lot of the examples above are hard to achieve, but pretty much everyone can purchase rental property – either as a general partner (owner) or limited partner (investor).

So, regardless if you pursue your own deals or partner with someone else, you should be building a portfolio of stable and reliable income producing properties.

You can start with single-family flips or small multifamily (2-5 units), but often it’s overwhelming for new investors. Instead, just focus on doing ANY kind of investing to get your feet wet.

I often recommend starting more passively as a private lender, partner in a syndication, or even a small group partner on flips or rentals.

Step 6: Expand and Grow

The key to lasting financial independence is not to have a one-hit wonder. There are a lot of examples of athletes or rockstars that make millions upon millions but never invest and spend most of their money.

So, grow your investments in a thoughtful and diversified fashion. This will protect you from a changing economy, market fluctuations, and allow you to stay financially free, regardless of what’s going on.

Like I said before, you need to have several sources of income. Just like stocks and bonds are often inversly related, you should invest in different streams of income that can rise and fall independently of eachother.

The day I had the epiphany of financial independence

I talked about it already, how I never planned to become financially independent until it came knocking at my door, literally. (Check out my entire personal story).

I realized that we all need money but investing is the only way to earn money without having to do any work. I realized that this is the fundamental difference between the financially independent and those who work.

While workers live off of their labor, the financially free live off of income generated passively. The passive income frees up their time to allow them to pursue more financially rewarding endeavors or to spend that time with family, or whatever they find fulfilling.

I realized that there is a fundamental difference in mindset between the financially free and those who are not. I call it having a “rich mindset.”

1. The Financially Independent Understand Assets and Liabilities

I was lucky, I never bought a house. The first big purchase people usually make is a car (do you think you should finance the car?), after that it’s a house. Fortunately, I bought an investment property. I was lucky enough to avoid the trap because your home is your biggest liability.

You hear most people say that your home is your biggest asset. Well, they are wrong.

Yes, I’m saying EVERY….SINGLE…PERSON who has ever given you this information is wrong. I don’t care who said it or what book they wrote. It’s wrong.

“Your home is your biggest liability.” – Eric Bowlin

Most people buy things they think are investments, then get stuck paying for those investments for years. Just read that sentence again. You will be stuck paying for those investments for years….

…But an investment should pay you.

You see, your home might have some appreciation over time, but generally, the costs far outweigh the increase in value. Plus, to ever get that equity you will have to A) Sell your home or B) Get further into debt with another mortgage. Either option isn’t good.

An Investment is something that pays you. There may be some costs to own that investment, but if it pays you more than you pay in expenses, it is an investment.

The financially independent people realize that your home is a very large liability!

2. The Financially Independent Live Within Their Means

So you have a good budget, you have no credit card debt, a nice savings account to cover 6 months of expenses, and your monthly expenses are less than your income. You even are saving a bit into that 401K provided by your job. You clearly live well within your means, right?…

…sort of.

It’s a good start but it isn’t enough.

The Financially Independent Have Expenses That are Less than Their PASSIVE Income

While you are living within your salary, the financially free live within their passive income. Even if they choose to work and have an income, they don’t consider that income toward their budget. Instead, that income is used to invest more and boost their passive income.

As passive income increases, their living standard can increase.

The unfortunate reality is that Financial Independence is not fun to achieve. It may require massive sacrifice in the short run.

So, it may be difficult at first when your friends are driving amazing cars and going on expensive vacations, but, over time your investments will grow and exceed your expenses.

Then, as your passive income grows even more, you’ll have more free time to invest in even better things.

And soon, you’ll have more money and time than any of your friends.

Being frugal at first and having the right mindset will lead to a Financially Independent Lifestyle

Eventually, though, your lifestyle will be far greater than it ever could have been if you work and spend like an average person.

3. The Financially Independent Don’t “Diversify”

“A diversified portfolio of stocks and bonds outperforms…” blah blah blah.

Throw that garbage out the window too.

I’m not saying to spend all of your money in one investment, as that’s kind of stupid. What I am saying is that the general wisdom of having a balanced portfolio consisting of tech stocks, healthcare stocks, manufacturing stocks, and some other stocks is pretty far from being diversified.

They are all stocks and they all tend to move together.

Stocks rise and fall together; dividends rise and fall based on stocks. Your entire investment portfolio is actually all in the same basket.

Financially Independent People Diversify Income Streams

Stocks provide income through dividends and then when they are sold you gain appreciation. Dividends are just one stream of income and it’s a great way to start on the path toward becoming financially independent. But, focusing on just this is not good…

There are a number of income streams you should be focused on:

  • Dividends
  • Stock Appreciation
  • Rental Income
  • Referral Income
  • Property Appreciation
  • Passive Business Income
  • Affiliate Income
  • Debt paydown (using other peoples money)
  • Tax benefits from depreciation
  • Royalties
  • And a LOT more…

Inside each category, you can further diversify your income streams. Just like you can own multiple dividend producing stocks, you can also own residential, commercial, or industrial real estate. You can also have ownership in multiple businesses, and receive referral fees for multiple different types of services.

Are you ready to start down the path toward Financial Independence?

Unlearning what you’ve been taught about finance.

We are all taught to work and to save a little bit throughout life until retirement. We buy nicer things, a bigger house, expensive vacations. Just like Bruno and the villagers laughed at Pablo with his crazy ideas, I hear all the time that it’s “impossible” to create passive income.

You can see the focus is on earning money and spending money with the hope that some day you can retire. But ‘some day’ is really far away, and for some people, it never comes.

I didn’t want to wait until I was in my 60’s; I wanted to have a free financial life now and I don’t care what other people think and I didn’t want to rely on a job, a boss, or some corporation.

Even recently people have told me that it’s impossible to do what I’ve done… It’s funny to me because I started when I was barely earning more than minimum wage and now control millions worth of real estate.

I assure you, it is possible and achievable for just about anyone that is motivated.


Recently I was having a conversation with a group of people. One person is about to graduate college and others asked him what he wants to do.

He went into a long explanation of the job he wants to get, the direction of his career, and how he hopes to get promoted into higher positions.

He is a smart guy and driven, I believe 100% he will achieve any goal he has.

After his explanation, I looked at him and summarized – “So your goal is to work?”

…and he seems to be doing a great job achieving those goals! Like the video above, he wanted to be a Bruno.

You see, my goal is to not have to work. We have fundamentally different goals and it is really hard to achieve something when you’re not focused on it. My goals are more like Pablo.

If I wanted to achieve my goals, I needed to find a new way to fund my lifestyle. I needed to take the focus away from working and put it toward not working.

We all need money to live, but there is no rule that says you have to trade your labor for money. You can put in your time now, like planting a seed and reap the rewards for years to come.

This is called investing. Understanding this basic principle is the fundamental difference between the financially independent and those who work. While we live off of our income, they live off of their investments.

Are you ready to take the first step?

Get the free guide now