Dec 2, 2024
Many dream of financial freedom but feel trapped in their 9-to-5 grind. The good news? It’s possible to build wealth and secure your future — even on a modest income.
British entrepreneur and personal finance expert Mark Tilbury, with more than 12 million followers across YouTube, Instagram and TikTok, recently shared his five-step roadmap to financial independence.
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Tilbury’s approach isn’t about overnight success; it’s about discipline, effort and time. Here’s how it can transform your financial life.
Define your ‘freedom figure’
The journey starts with setting a clear financial goal — your “freedom figure.” This is the amount you’d need to live comfortably without relying on a traditional job. It serves as both motivation and a guide.
To calculate it, estimate your annual expenses for housing, food, transportation, healthcare and other essentials. Multiply that total by 25 — this assumes you can safely withdraw 4% of your investments yearly without depleting your savings. For example, if your annual expenses are $50,000, your freedom figure would be $1.25 million.
The number might seem daunting, but remember: it’s a target, not a requirement. Gradual, consistent effort and smart decisions can help you reach and even exceed it.
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Optimize your spending
Once you have your goal, the next step is to optimize spending and find ways to save without sacrificing your quality of life. Tilbury suggests a few practical strategies:
Car hacking: When you’re shopping for a new car, buy one used instead of new to avoid steep depreciation. Consider carpooling or driving less to save on gas and maintenance. Though used car prices rose in October, the gap in prices between new and used has reportedly never been this big.
Brand hacking: Swap pricey name-brand products for generic alternatives with comparable quality.
House hacking: Rent out a room or basement in your home to offset mortgage costs and build equity faster.
Tax hacking: Maximize deductions and credits to lower your tax bill, freeing up more cash for investments.
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Deal hacking: Consider adopting a negotiator’s mindset. You may not be able to change the price on everything, but many purchases — vehicles, retail goods, even the internet bill — can be negotiated if you’re willing to engage the seller. Asking for discounts can lead to surprising savings.
Build your credit
A good credit score is essential for accessing favorable interest rates on loans, mortgages, and credit cards. Building and maintaining a strong credit score can save you thousands of dollars over time.
Tips for building your credit include obtaining a credit card and using it responsibly by keeping your balance low and paying it off in full each month. This will help you establish a positive payment history.
Check your credit report regularly for errors and address any issues promptly. You can get a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year at AnnualCreditReport.com.
Make all your payments on time, including credit cards, loans, and utility bills. Late payments can negatively impact your credit score. Paying down outstanding debts — such as credit card balances or student loans — will improve your debt-to-income ratio, an important factor in your credit score.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Diversify your income
Relying solely on a single paycheck is risky. Diversifying your income streams can accelerate your path to financial independence. Tilbury recommends starting a side hustle, like freelancing or selling a product based on your skills or passions. Multiple income sources reduce financial vulnerability and help you save or invest more aggressively.
Make your money work for you
Tilbury’s final step is to put your money to work. Investing is key to growing wealth over time and achieving financial freedom. Look for opportunities where you can invest your hard-earned money into assets that offer passive income streams like:
Dividend-paying stocks: These provide regular income while allowing your investment to grow.
Rental properties: Real estate can generate consistent cash flow and build long-term equity. And you don’t even have to be a landlord.
Peer-to-peer lending: Platforms that facilitate loans between individuals can offer attractive returns.
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
