Seven Ways To Get Financially Independent In 2017: Part 6

Welcome to part six of seven ways to get financially independent. A series of tactics you can use to achieve financial independence as soon as possible. Remember it’s not about getting rich, it’s about getting free.

If you haven’t read them already hop over and read the previous articles.

Introduction to the series – Here.

Part One: Moving to a new country – Here

Part Two: Starting a side hustle – Here

Part Three: Alternatives to your car – Here

Part Four: Saving money on food – Here

Part Five: Invest in yourself – Here

Living with the enemy

Take a second to think about your current living situation, do you own or rent? Do you have a dining room, a spare bedroom or two. Do you have a home office, a games room or a man cave. Have you got a home gym or a cinema room?

Looking at the above list of rooms and ask yourself do I have one of these rooms, have I spent or do I still spend money paying for this additional space.

Financially independent

My whole house would fit in this hallway!

Do you have a home gym but still spend $50 a month on a gym membership?
Do you have multiple spare bedrooms that only get used once or twice a year?

Is your house the enemy you live with every day that’s halting your charge to becoming financially independent?

Pareto’s Law

Pareto’s law, now commonly called the 80-20 rule states that 80% of effects come from 20% of causes. But how is this relevant to your accommodation?
Let’s look at some simple sums.

Let’s assume you work 9 hours per day and that your commute is 1 hour each way. That gives us 11 hours out of 24 spent out of the house.

Now let’s assume you sleep for 8 hours per day.

We now have 19 hours of the day spent in bed or out of the house or 79% of our total time.

It’s possible and highly probable that less than 20% of our time is spent in all other areas of our house.

How many rooms do you really need?

What rooms do you have in your accommodation? How many do you really need?

Probably Needed

Bedroom – Great for sleeping!

Bathroom – Necessary for most people.

Kitchen – Needed to help save money on food.

Living room – Let’s not spend all our time in bed.

Less Useful

A dining room – How often do you actually sit up the dining table and have a meal.

Spare bedroom – Rarely used.

Office – But you don’t work from home.

Home Theatre – But you always go to the movies.

Home Gym – But you hate exercise!

Seven-Ways-to-Become-Financially-Independent

Downsizing To Become Financially Independent

Here are 5 tips you can follow to speed up the journey to financial freedom.

1: Downsize your house

This may seem a little drastic but you could sell your house and invest the money.  You could downsize and pay out less on your mortgage or rent on a monthly basis.

Spending $100 a month less over 30 years is a significant amount of money. Investing that money on a monthly basis or in a lump sum could significantly speed up your path to financial freedom.

$100 dollars per month reduction in rent.
30 years
5% growth
Total $83,225.86

Lump sum from selling your home.
$20000
30 years
5% growth
Total: $89,354.89

2: Get a permanent lodger

Two bedrooms in your house or apartment then why not consider a permanent lodger. Whilst it may take some time and effort to find the right person having additional income every month should soon ease your qualms.

Take it to the extreme for 6 months and consider renting out your bedroom also. Rely on friends and family to let you sofa surf over the next 6 months.

There are people out there that started doing this and eventually managed to buy additional properties to rent out.

3: Utilise the space.

There are a number of other ways to utilise the space you have to bring in additional money on a monthly basis.

Similar to the above, why not put your spare bedroom on Airbnb. It may take a while to get people to stay at the beginning, so offer very cheap or free stays in exchange for good feedback.

Airbnb

If you live in large cities parking is often at a premium, why not rent out any external land you have on a fixed term contract.

4: Advertising

Utilise your external wall space to advertise for local companies. Often when a company has erected a new fence or installed new windows they will leave an advertising hoarding up for a few weeks to drum up business. Why not approach these people and ask to advertise their business on a semi permanent basis.

5: Turn your house into a film set.

Granted you’re more likely to get takers if you live in California than if you live in a small suburb in the UK, however small budget films and TV programmes are being made all the time. Could your dining room be just what they are looking for? Maybe your house will be featured in the next Downton Abbey or Breaking Bad.

Make A Change

There you have 5 great ways to better utilise your house to become financially independent as soon as possible. Which one could help YOU achieve the dream of becoming financially independent? The important part is you take steps to help you make a change.

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2 Comments

2 Comments

  1. Miss Mazuma says:

    Owning my home is the leading factor I attribute to my savings rate being so high. Housing costs in Chicago can be quite ridiculous depending on location and time of year…obviously renting in the summer will have a higher price tag than in the winter when everyone is wondering what the heck they are doing living in the frozen tundra of Chicago! In purchasing my condo, I knew that even if I moved out and never rented it I could still afford to keep it for years to come…which unfortunately is what is happening at this very moment while I wait to get to the top of rental list. Anywho, I bought an affordable studio in an ok part of town with a great walking score and close to all forms of public transportation. Granted, a studio isn’t fit for everyone’s needs (those with kids for example) but it suits mine. When I am able to rent my unit, the cash will go directly towards saving to purchase another. Buy/rent only what you need and you will have more money to save/invest with. Great tip!

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