Mindmap

How to Achieve Financial Independence (Roadmap)
	0) Read this first
		Not financial advice (education only)
		Build an emergency fund (3–12 months)
		Pay off high-interest debt first
		Avoid leverage you don’t understand
	1) Define “financial independence”
		Goal: passive income covers expenses
		Rule of thumb: expenses ÷ withdrawal rate
		Common targets: 3–4% withdrawal rate
		Milestones: first $10k → $100k → $1M → FI
	2) Increase income + raise savings rate
		Primary lever: skills and career progression
		Secondary lever: side income (if sustainable)
		Control fixed costs (housing, car, subscriptions)
		Savings rate: 20–50% (higher = faster)
	3) Core investing principles
		Time in market > timing the market
		Low cost: fees + taxes + turnover matter
		Diversify broadly (avoid single-stock concentration)
		Automate contributions (set-and-forget)
	4) Build a long-term index portfolio
		US total market or S&P 500 core
		Global diversification (ex-US exposure)
		Bond allocation for stability (optional)
		Rebalance on a schedule (6–12 months)
	5) Use tax-advantaged accounts (US-focused)
		401(k): capture employer match first
		Traditional vs Roth: tax now vs tax later
		IRA / Roth IRA: additional tax shelter
		HSA (if eligible): triple tax advantage
		Taxable brokerage: long-term holding for lower taxes
	6) Risk management
		Asset allocation matches risk tolerance
		Position sizing: avoid catastrophic drawdowns
		Behavioral discipline: don’t panic sell
		Sequence-of-returns risk near retirement
	7) Real estate (optional path)
		Separate “home” from “investment” math
		Focus on cash flow and true expenses
		Maintain reserves (vacancy, repairs, capex)
		Leverage rules: fixed-rate, conservative LTV
	8) Withdrawal and “exit plan”
		Choose a conservative withdrawal rate
		Income sources: dividends, interest, rent, selling shares
		Build a cash/bond buffer for downturns
		Tax planning in drawdown years
	9) Action checklist (start now)
		Week 1: budget + emergency fund + debt plan
		Month 1: set up accounts and auto-invest
		Quarter 1: finalize allocation + rebalancing rule
		Yearly: optimize income, taxes, and risk