How to Invest Money for Financial Independence

Discover the simple, proven path to growing your money the FI way — and buying back your time.

Whether you’re just starting or optimizing your strategy, this guide breaks down how to invest with confidence, clarity, and long-term results.

✔️ Low-cost strategies ✔️ Long-term thinking ✔️ FI-focused

Why Saving (or Stashing It Under the Mattress) Isn’t Enough

If you're saving consistently — great start. But here's the truth: saving alone won’t get you to FI. You need your money to work for you, not just sit there.

🥕 The Carrot: Put Your Money to Work

Every dollar saved is a little worker. You can leave them idle in a savings account, or deploy them into investments that grow and compound. The FI community uses this strategy to build passive income and eventually exit the 9-to-5.

🔨 The Stick: Inflation Eats Lazy Dollars

Inflation quietly erodes your purchasing power. That dollar sitting under your mattress? It buys less each year. If your money isn’t growing, it’s shrinking.

Wherever You’re Starting From

Many people spend everything they earn — and not always by choice. For some, high costs and low wages make saving nearly impossible. For others, it’s the cultural script we’ve all absorbed: “You only live once — so spend it all now.”

If you’re feeling stuck in a low-income situation, here’s something powerful to hold onto: Someone else has probably been there — maybe worse — and found a way forward. They may not live next door, but their story, strategy, and path might be just a forum thread, podcast episode, or blog post away.

This is where the FI community really shines: crowdsourcing best practices for job retraining, skill stacking, career switching, salary negotiation, or even geoarbitrage. These aren’t buzzwords — they’re real tools people use to break out of difficult situations.

While this guide focuses on investing, remember that income growth is part of the larger FI toolkit. If investing is how we grow wealth, increasing income is how we get the fuel to invest in the first place.

Define Your “Why”

In Your Money or Your Life, Vicki Robin asks a powerful question: “Are you making a living — or making a dying?”

For many of us, the answer is uncomfortable. We’ve built lives we can barely tolerate, counting the minutes until Friday, then spending money we didn’t need to spend just to feel better — and keeping ourselves stuck in the process.

FI gives you a way out. It starts with defining your “why” — the reason you're choosing this path in the first place. Not to deprive yourself, but to reset the system so your life aligns with your values.

That doesn’t always mean quitting work forever. For many in the FI community, the goal is freedom of choice — to walk away from the job you hate, take a sabbatical, work on something meaningful, or just have the option to say “no.”

Many of us picked careers in our early 20s — before we really understood what work, fulfillment, or freedom could mean. Now, with experience and insight, you can choose again.

As Warren Buffett famously said, he “tap dances to work” — not because he has to, but because he loves what he does. FI gives you the freedom to find your own version of that.

This journey isn’t about quitting forever — in fact, it’s not necessarily about quitting at all. It’s not about escaping something — it’s about choosing something better. FI gives you the freedom to pursue work, projects, or purpose on your own terms. Once you define your why, the rest of the plan starts to fall into place.

Define Your FI Number and Timeline

Once you’re clear on your values and your vision for freedom, you can start translating that into a plan. One of the most helpful tools is your FI number — a rough estimate of how much money you need to become financially independent.

A common rule of thumb in the FI community is:

FI Number = 25 × Your Annual Expenses

But remember: FI isn’t binary. It’s not all-or-nothing. You don’t have to grind full-speed for 20 years and then stop working forever. There are flexible paths that unlock options much sooner:

  • CoastFI — You’ve saved enough that future growth alone can carry you to FI
  • BaristaFI — You work part-time to cover expenses while your investments grow
  • LeanFI — You reach FI faster by living simply and intentionally

These “mini-wins” give you the power to pause, pivot, or rest along the way — not just at the finish line.

From there, start mapping your timeline: How long might it take? What sacrifices are worth it? What kind of life do you want during the journey — and on the other side?