It’s oh-so-easy to look at shiny, quickly rewarding options for your money as a ticket to financial independence. A big hit on the stock market, a hockey-sticking cryptocurrency, an app that can put you on the path to easy street. But truly building financial independence is a life-long process, says Paula Pant, the host of the Afford Anything podcast. 

Think of your finances like a tree. While the leaves and fruit are grabby and exciting, they aren’t where the tree’s strength lies; that’s in the roots. So, too, do healthy finances begin from a core base: figuring out what you value most, what you truly want to afford. 

From there, you can make the long-term plans to see that come to fruition. With a stable, value-driven approach and some discipline, a world of freedom can open before you. You may not be able to buy everything, but you can buy anything.

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PAULA PANT: Every choice that you make comes with a trade-off. Money is an invitation to critical thinking. You can afford anything, but not everything. So if there's something that you value, whether it's travel, food, or a house, you can have that thing. You just can't have an endless series of ands. You might not be able to have that thing and something else and something else and something else. And that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention - any limited resource. And life is the ultimate limited resource. So when you practice being better at managing your money, you practice being better at managing your life. 

My name is Paula Pant. I am the host of the "Afford Anything Podcast." 

I want to help you reach financial independence by making smarter decisions with your money. The mistake that I see a lot of people make when they start asking questions about how to manage their money is that oftentimes people will ask a question about a product or a tactic. So for example, they might say, "Should I use this app, or should I invest in cryptocurrency?" First-principles thinking is stripping away everything and really getting to the root of something. So if you think about a tree, the tactics and the products are like the leaves of a tree. That's the most visible surface so, of course, it's what people might ask about first. But first, let's start with the roots of that tree. The roots of that tree are your values. It's that question of what matters most. And then from those roots stem that trunk of the tree, which is your philosophy of life, the type of life that you want to lead. And from that philosophy, then your objective or your goals: How does that philosophy of living translate into specific goals? That's really that tree trunk. From there, you go out into the branches of the tree, and they represent the strategy. Now that you know your philosophy of living, you know your goals, now you can come up with strategies for how to obtain those goals. And then once you have that strategy in place, then those leaves are the tactics and the products. So if you're starting with the question about tactic or product, you've got a leaf in your hand, but you don't have that root system built yet. 

When personal finance is framed in the context of delayed gratification so that you can have more money when you're 75 years old, it's really hard to get excited about that. But when we reframe that as financial independence and how taking better care of your money leads to this flourishing of freedom, of opportunity, of choice, that becomes much more enticing. FI is the point at which your potential passive income - money that comes to you when you're sleeping, typically through investments - is enough to cover your basic bills. And the reason that matters is because then endless options open up for you. You have the freedom to do whatever you want - whether that's to stay in your current profession, make a midlife career change, become a full-time parent, or travel the world. Whatever choice you want to make, you're able to make that without having to sweat about how you're gonna keep the lights on, how you're gonna keep the fridge stocked. The pursuit of FI is for everyone, but the first steps that you are going to take will differ depending on where you are in your journey. 

There are really only three steps to achieving financial independence: Grow the gap, invest the gap, repeat. Grow the gap means to grow the gap between what you earn and what you spend. And there are only two ways to increase that gap: earn more or spend less or both. If you don't make very much, like me when I was in my first job out of college making $21,000 a year, at that stage of life, your goal is to increase your income. If you're already making big dollars but you have a spending problem, the low-hanging fruit is to curb that spending problem and to address the root psychological issues that are leading to that spending problem. Step two is to then invest that gap. My personal feeling is that everyone should aim to save and invest at least 20% of their income. And when I say save and invest, that includes making additional payments towards the debt above and beyond the minimum required, retirement savings, investments in an investment account. It includes building up your emergency fund. Start with the goal of saving 20%, and if you're nowhere close to that, increase your savings rate by 1% and do that every month or two. It will take a few years, but you will over time get to that 20% mark. And then step three is repeat. This is a lifetime practice. This is not a quick hit or something that's going to happen overnight. Money management happens for life. There has never been a point in history when the world has not been volatile. A hundred years ago, there was also a pandemic going on, and there was a first World War. A decade later, the Great Depression. After that was World War II. After that, event after event after event that affected the entire globe. I came to FI because I was scared and anxious about the volatility in my life and the world. My response to that was to become obsessed with saving as much as I could because it allowed me to not be so scared of the future. It felt psychologically comforting to have these savings. 

Change is the nature of the world, the nature of time. And so, if you're looking out at the big global factors that are happening in the world today and you're feeling fear, embrace it and use that fear as motivation, as fuel to make wise decisions about how you spend your money, your time, your effort. That's how you build a life that's more intentional. And there's a lot of joy in that.