The SVB Bank Collapse and What It Means For You

The SVB Bank Collapse and What It Means For You


The SVB Bank Collapse and What It Means For You


On Friday March 10, the world woke up to headlines that Silicon Valley Bank (SVB) had “failed.” Bank failures, though rare, are nothing new and the story roughly plays out the same each time. Runs start with higher-than-anticipated demands for cash that turn into a contagion as depositors become fearful they won’t be able to get their money out and withdraw it, even though they don’t need it right then. The speed at which the SVB collapse happened showed us what a run looks like in an age when information travels almost instantaneously and money can be requested from anywhere via a simple request from a phone.

The Federal Deposit Insurance Corporation (FDIC) was established expressly to prevent the fear that drives bank runs. If depositors are guaranteed they will get their money back, there is no need for panic and small dislocations don’t turn into full-blown explosions with wide-reaching collateral damage. The challenge for SVB and Signature Bank, which was also shut down by government regulators over the weekend, was that the vast majority (up to 97%) of depositors had exceeded limits for FDIC coverage.

SVB was also particularly susceptible due to its concentrated depositor base of startups and small technology companies. In the pandemic, many of them became flush with cash and parked it at SVB. SVB, seeking yield and safety, invested it in longer-dated Treasury bond and other government backed securities. As higher interest rates hit the tech sector and startups particularly hard, companies began withdrawing cash at a faster rate. At the same time, the value of SVB’s longer-dated bonds fell. This pattern had been going on for multiple months until last week when SVB announced the sale of securities at a loss to cover withdrawals. That announcement triggered broad concern and the fear that SVB would not be able to cover the full amount of their deposits. Whether that would have ultimately been true or not remains unclear.

To avoid further panic and contagion risk across the banking system, the FDIC stepped in and took over the bank on Friday, following up with a guarantee to cover all deposits at SVB and Signature Bank, even those above the standard insurance limit. Given the commitment to cover deposits for these two banks, it seems likely they would do so for others. They also extended very attractive loan arrangements that can be used by any bank. Many believe these actions should be more than enough to provide stability.

While the government has stepped in to cover depositors, this intervention is far different than what happened in 2008 when the government also bailed out bond and equity shareholders. With the government takeover, the equity of SVB is worthless as is that of Signature Bank. Thankfully, the ETFs we recommend in our core portfolio had immaterial exposure to these stocks (< 0.1%).  

However, our core portfolio overweighs U.S. small-cap value ETFs that have exposure to many other regional bank stocks which have been hit hard by association. Fear-driven market pullbacks are never fully logical, so one never knows what will happen in the next few days and weeks, but there are good reasons to believe that SVB and Signature Bank were outliers in many respects and that other small and medium-sized banks are in a stronger position.

It is very common in fear-driven market declines for small-cap stocks to suffer greater losses and then rise more quickly during a recovery than the broader market. The COVID crash in March of 2020 was the most recent example of this phenomenon. We believe one reason small-cap value stocks have historically delivered returns higher than the broad market is their greater volatility in times of stress. To be in a position to capture the potentially higher returns and diversification benefit of investing in these stocks, we must stay the course.

Anytime there is stress in the financial markets, it is an opportunity to assess whether we are taking undue risk. Investing is never risk free, but our goal is always to maximize our return for a given amount of risk. There are already some good reminders coming out of the current situation:

  1. Make sure the cash you hold at any given bank is below the FDIC insurance limit. There are plenty of good options to help you do this even for cash balances in the millions. If you, someone you know, or the business you work for is in this situation, please reach out to us and we can help direct you to solid options based on the specific needs.


  2. Reassess any concentrations you may have in your wealth. One of the major reasons SVB was susceptible to a bank run was the concentration of its depositor base and the high exposure in its investments to a single risk – rising interest rates. The likelihood of any given company going bankrupt is small, but the consequences can be catastrophic if a significant portion of your wealth and livelihood are tied to a single entity. The power of diversification across all aspects of your current and future wealth should not be underestimated as an effective means of protection.

Financial market stress and the associated volatility can be unnerving. We strive to provide peace of mind by designing our portfolios to keep clients on track to reach their goals through a variety of market conditions.





Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

I’ve Been Laid Off — What Now?

I’ve Been Laid Off — What Now?


News headlines everywhere are talking about widespread layoffs, particularly in the technology industry. Thousands of people have lost their jobs with still many more losses predicted in Q1 of 2023. With so many heavy hitters right here in the Pacific Northwest—Microsoft, Google, and Amazon, just to name a few—it’s likely these tech world layoffs affect you or someone you know.  Many of our own clients have expressed concern over their own job security, understandably anxious and full of questions.


Of course, the primary concern when facing a layoff is finding a new job, but that can take time. Here are a few things to think about as you adjust to your new normal. Perhaps most importantly, DON’T PANIC!


Here are the things that should be first on your list:

  • Give us a call! Your Wealth Advisor is here to help put your financial picture into perspective and to assist with planning to protect your investments. We can help you wade through the pros and cons of everything in this article—decisions regarding your 401(k), insurance, benefits, cash flow, taxes, retirement concerns, and more.
  • Start networking! Reach out to alumni groups, job boards, professional organizations, former colleagues, recruiters, etc.
  • Understand your rights under state law.
  • Review company documents and your severance agreement. There may be some terms of the layoff you can negotiate, like extending healthcare or retaining some company perks.
  • Apply for unemployment benefits.
  • Once you know the details of your severance agreement and unemployment benefits, plan out how to fill the income gap. See below for the pros and cons with some of the different options available.
  • Look at your options for any vested and unvested stock options or RSUs.
  • Review healthcare options. Should you sign up for Cobra, get coverage via a Marketplace plan, or join your spouse’s coverage? A layoff is a triggering event, so these options are all available to you, but there are pros and cons to each that depend on your situation.
  • Review your expenses and cut back if needed.
  • Consider your 401(k) options.



What are your options for filling the income gap?


Spending down your assets – Sarah Kordon, CFP®, CRPS®, Wealth Advisor

Ideally, you have an emergency savings account specifically appointed for a situation like this. If so, this should be the first asset you begin to use to supplement your income. Keep in mind that you will want to rebuild your emergency savings account after you are settled in a new job, so don’t spend frivolously. Revisit your monthly budget and look for ways to cut costs so you can stretch these savings for a longer period and rebuild them quickly when your new income stream picks up.

Spending down assets may also affect your larger financial goals, so before you dip into your savings and investments too heavily, be sure to consider the ramifications. Hopefully shorter-term goals, such as buying a new home or taking a grand vacation, can simply be postponed. Longer-term goals, such as retirement at a certain age, can also be adjusted if needed, but hopefully your emergency cushion is large enough to keep that from being necessary.

If you need to take distributions from investments, we can help you evaluate the tax consequences and understand the impact of such actions on your goals, which may make some tough decisions a little easier and provide you peace of mind.


Taking a 401(k) loan or withdrawal – Sierra Butler, CFP®, CSRIC™

When you’ve stopped getting a paycheck, using some of your 401(k) assets through a loan or withdrawal might seem like an attractive choice, but here are some reasons why it should be your last resort.

Most 401(k) plans do not allow new loans after an employee has left the company. If you already have a 401(k) loan, the plan may demand an immediate repayment or a shorter repayment plan. The loan must be repaid before rolling over the balance into a new 401(k) or IRA, which would prevent you from consolidating your accounts and potentially taking advantage of superior investments in a different account.

If you instead take a withdrawal from your 401(k), or if the loan is not repaid, it will be treated as a taxable withdrawal and is subject to ordinary income tax. Additionally, you will incur an early withdrawal penalty of 10% if you are younger than age 55.

One of the biggest risks of a 401(k) loan or withdrawal is missing out on market gains should the investments do well after you take the withdrawal. I caution folks from viewing their retirement accounts as piggy banks for current spending as it can be a quick way to deplete their retirement nest egg.


Should I take on gig or contract work? – Frank McLaughlin, CFP®, CSRIC

This question depends entirely on your financial situation and tradeoff preferences. Assess these by asking yourself questions like:

  • Have I saved up enough cash to weather this period between jobs?
  • Am I able to cut back on certain expenses to allow me to search for a new job without taking on a gig? Is cutting back on expenses worth it, or do I prioritize maintaining a certain lifestyle?

Note: Don’t forget to consider new potential expenses, such as healthcare costs.

  • Do I have another source of income, such as a working spouse who could temporarily pick up the additional burden for a while? Would my significant other be okay with that arrangement?

If you find yourself answering no to more than one of the assessment questions above, taking on a side gig or contract work may be a great option to explore.



Could there be a silver lining?


Consider retiring early, staying home with the kids, or taking a sabbatical – Lowell Parker, CFP®

After a layoff, the most common course of action is to work toward finding a new job. But that isn’t the only path available to you. Burnout is real! Maybe this is your sign to take a break if you can afford to. Can you take this opportunity to retire early or stay home with the kids for a few years? Or perhaps take advantage of the temporary break from work and go on that long trip you’ve been dreaming about, or use the time off to work on a home remodel?

The obvious and large warning for any of these options is that your financial plan must support it. Do you know what these choices would mean for your future lifestyle? This is a major decision to make, and there are many factors to consider. What retirement lifestyle are you dreaming of? Are the assets you have saved enough if you won’t continue to have an income stream from a job? It’s important to revisit your financial plan and make sure you have saved enough to make work optional, whether temporarily or permanently, throughout a variety of potential future market scenarios. If this is something you’re considering, reach out to your Wealth Advisor to see if you can make it happen.


Make it work to your advantage at tax time – Chris Waclawik, AFC®, CFP®

After you’ve reviewed your income sources following a layoff and you have an estimate of the tax impact of using these sources for income, you may be able to create a plan to take advantage of the situation.

The “good” news is that a layoff, especially one that happens early in the year, can potentially place you in a lower tax bracket for the year, which opens up some planning opportunities. Here are a few to consider:

First, your health insurance choice may come with tax perks. When being laid off, many employees have the choice of COBRA, to extend current health insurance, or health insurance through the Marketplace. Purchasing coverage through the Marketplace can have subsidies (provided through your tax return) that can reduce the cost of coverage by over $1,000 per month depending on age, income, and the number of family members to cover.

Second, it may be possible to realize long-term capital gains at a 0% rate. This is a great opportunity to diversify out of a concentrated position without incurring a huge tax burden.

Third, finding yourself temporarily in a lower tax bracket can be a good opportunity for Roth conversions. By intentionally moving some investments from an IRA to a Roth account, you may be able to reduce taxes over your lifetime.

While I think everyone agrees layoffs aren’t fun to experience, at least we may be able to take advantage of them to reduce our tax burden for that year and potentially well into the future.


If you are experiencing a layoff yourself, remember: Your first step should be to contact your Wealth Advisor. If you’re not already working with one, schedule a meeting today. We can take some of the stress of these decisions off your plate and help you find the silver lining.





Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Should You Have a Budget?

Should You Have a Budget?

Budgeting: Determine an approach that makes sense to you


Budgeting. You may have embraced the concept, or more likely, avoided it altogether, which is very common. Sometimes we feel obligated to complete a budget, but more often than not, we find it hard to implement and even tougher to maintain. So, should you budget? Is it worth your time to create one? What if you don’t complete one? How does having a budget help? This article will outline the benefits of creating a budget as well as provide a foundation to get started.

As wild as life can be at times, a financial budget can bring clarity to a household and help alleviate anxiety around spending. Quite frankly, that is exactly the point. Without a budget, spending can bring a level of stress that may overshadow the excitement of a given purchase. Having a budget in place allows you to know where your dollars are going and can provide the ultimate relief in terms of achieving guilt- free spending. This applies to those saving for retirement and those who have already shifted into retirement. Below are a couple types of common budgeting approaches. Keep in mind that no one size fits all, but there are options.

Types of Budgets:


Zero-based budget

Track specific income and expenses to understand exactly where all your hard-earned money is going. This is the most difficult budgeting style to start, but it will bring the most transparency to your finances. This method takes a lot of maintenance and is more suited for those who enjoy the process. Engineers and accounting professionals, I am talking to you. Microsoft Office offers several Budget Templates that can help jump-start the process.

General steps:

  • Gather data from bank accounts, credit card statements, investment accounts, etc.
  • Organize the data into categories, typically fixed versus variable inflows & outflows
  • Utilize software like Excel to accurately map out household cash flow
Reverse Budget

Start with savings amounts and/or debt payments and then proceed to allocate what is left over to general expenses. This is the easiest to start and focuses on prioritizing savings targets. The downside to this approach is that it can leave you shorthanded when it comes time for very real expenses like groceries or utilities.

Merriman’s own Geoff Curran wrote a great article a couple years ago that highlights this method in greater detail: Reverse Budgeting

50/30/20 budget

This method takes an alternative approach and categorizes spending into three main categories: Needs (50%) / Wants (30%) / Savings (20%). The percentage per category may change given the individual creating the budget, but the focus remains the same – categorizing what is essential versus what is deemed “extra”.

General steps:

  • “Needs” may consist of rent/mortgage payments, utilities, groceries, etc.
  • “Wants” generally include items like travel, entertainment, restaurant spending, etc.
  • “Savings” targets carving out money for near-term purchases and, most importantly, retirement savings.


There is no one correct method to use, and that is the part most people struggle with. A crucial element of budgeting is very similar to maintaining a sound financial plan: choose a method that works for your situation, one that can be maintained over the long run. If you have budgeting questions or want to explore the methods mentioned in this article, please reach out to Merriman. We would like to help you find an approach that works for you.



Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

How to Improve Your Credit Score

How to Improve Your Credit Score




Bad credit can haunt you for years. It can make it difficult to get a loan, rent an apartment, or even get a job. If you’re struggling with bad credit, it’s not the end—there is hope. Here are some useful pointers on how to give your credit score a much needed boost. Follow these steps to see a noticeable improvement in no time.


What Is a Credit Score?

A credit score is a critical indicator of one’s financial health and stability. This numeric value is determined based on several factors, including payment history, credit utilization, length of credit history, types of credit used, and recent inquiries on the report.


Because this single number encapsulates so much information about one’s financial behavior and habits, it is essential to monitor a credit score closely. You must take all necessary steps to maintain or improve it. A good credit score can be your ticket to financing significant purchases, such as a home or car. In contrast, a poor score can leave you in the hands of bad credit auto finance companies or other high-interest lenders.


Credit scores go from a low of 300 to a high of 850. Generally, a score above 650 is considered good, while anything below that is fair or poor. Therefore, it is of utmost importance to understand what goes into a credit score so that you can work to improve yours over time. Fortunately, consumers can take steps to improve their credit scores, regardless of where they fall on the credit spectrum.


Pointers to Help Boost Your Credit Score

Looking at your credit score right now may leave you feeling down in the dumps, but don’t despair. You can do plenty of things to improve your credit score over time. The following pointers will help get you on the right track:


1) Pay Your Bills on Time, Every Time

A good credit score is crucial for many reasons. That’s why it’s important to make sure you pay your bills on time, every time.


Unfortunately, things have a way of turning up to scuttle any timely payment plan. If that happens to you, don’t panic. There are steps you can take to minimize the damage to your score.


First, try to arrange a payment plan with your creditor. This shows them that you’re willing to work with them to resolve the situation. Second, cover the minimum payment if you cannot make a full payment. This shows creditors that you’re still trying to meet your obligations even if you can’t pay everything you owe right away.


Finally, keep track of your payments and ensure you don’t miss another one. Even one late payment can significantly impact your credit score, so it’s critical to stay on top of things. By following these steps, you can help ensure that your score stays strong, regardless of life’s challenges.


2) Don’t Apply for Too Many Accounts at Once

It can be tempting to open up many credit cards when you’re first starting. After all, one of the first steps to building good credit is to have a robust credit file. But while it’s essential to have a few lines of credit, you want to be careful about applying for too many at once.


Whenever you submit a new credit application, your credit score takes a minor hit. And if you’re constantly applying for new lines of credit, that can add up to a significant drop in your score. Additionally, you increase your identity theft risk every time you open a new account. So while it’s important to build your credit file, you want to be thoughtful about which accounts you open and how often you submit applications.


3) Regularly Check Your Credit Report

You must always stay on top of your credit report. Whether you’re applying for a mortgage, a car loan, or a new credit card, your credit score will be one of the factors that lenders look at when considering your application. That’s why it’s so important to review your credit report regularly.


By doing so, you can catch any errors or discrepancies and address them before they have a chance to impact your credit score. You can also identify any negative information that may be dragging down your score and take steps to improve your credit standing. Reviewing your credit report is one of the best ways to keep track of your financial health, so do it regularly.


4) Pay Your Bills Every Two Weeks

There are many strategies for improving your credit score quickly and effectively. One helpful method is to pay your bills every two weeks instead of once a month. This pacing enables you to make smaller payments more frequently, which can help reduce the effect of interest over time.


In addition, making frequent and consistent payments helps demonstrate that you are a dependable borrower in the eyes of lenders. Because this can be a powerful tool for increasing your credit score, it is well worth considering if you have the financial means. If you can set aside just a small amount each paycheck or biweekly period, it could make all the difference for your future borrowing prospects.


5) Don’t Close Unused Credit Card Accounts

Some people say it’s good to close any unused credit card accounts. After all, why keep them open if you’re not using them? However, closing these accounts can do more harm than good. One of the factors that creditors look at when considering a loan is your credit history. The longer your history, the better.


So, by closing down those old credit card accounts, you’re shortening your history and making it look like you’re not as reliable. It’s better to keep those old accounts open and pay the annual fee if there is one. That way, you can maintain a strong credit history and improve your chances of getting approved for future loans.



The Bottom Line

Building good credit takes time and effort. But by following these simple tips, you can improve your credit score and make it easier to get the things you want out of life. So don’t wait—start working on your credit today.




Written Exclusively for by Amy Marshall.

Amy Marshall is an automotive expert who loves to write about anything car-related.




Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Merriman. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.


A Guide to Average Home Maintenance Costs

A Guide to Average Home Maintenance Costs


Purchasing a new home involves a great deal of money, especially if you remain in the same house for years. To keep your home systems and appliances functioning smoothly, you also need to spend money on maintenance. This blog will help you understand the average home maintenance costs and how you can reduce them significantly.


What Is the Average Home Maintenance Cost?

According to a survey by the National Association of Home Builders in 2019, the typical cost of minor repairs and regular maintenance is $950 per year. This amount is based on the average single-family house and is subject to change based on several factors. For instance, the cost does not include expensive repairs and maintenance of items like the roof, swimming pool, HVAC, and other significant home features. Additional factors that can swing the cost of maintenance include the location of your house, the area of your house (in square feet), and the size of your family.


How Much Should You Budget for Home Maintenance?

A general rule of thumb states that you should keep 1% of your house value as a fund for general maintenance. For instance, if your house costs $500,000, then you should be prepared to pay up to $5,000 for maintenance. However, recent trends indicate that a growing number of homeowners are keeping aside up to 4% of their house value in their maintenance fund.

Another method, the square footage rule, states that you should keep $1 per square foot of your house for maintenance. Thus, for a 3000-square-foot property, you can expect $3,000 for maintenance. However, this method does not factor in the age, location, or the condition of your house.


What Are the Activities Included in Maintenance Costs

At times, people get confused between repair costs and maintenance costs. Maintenance of your house includes activities to keep your house clean and maintained. It also includes activities that allow seamless functioning of your appliances and home systems. Wondering what these are? Here’s a list of few of them:


  1. Cleaning the home deck or patio
  2. Lawn services
  3. Sidewalk and driveway maintenance
  4. Cleaning the gutters and vents
  5. Servicing your HVAC
  6. Maintaining faucets and sinks
  7. Maintaining the central heating system
  8. Lubricating garage door springs
  9. Pest control and inspection
  10. Regular maintenance of kitchen appliances


These maintenance activities are not very costly and can be managed using maintenance savings. However, the house itself might need repairs. Repair costs for fixing roofs, HVAC, structural defects, water heater, and the like can quickly add up. The excess of your maintenance funds can be used for these emergency fixes.

You can also assess the repair costs and set aside some money for such unexpected expenses. Alternatively, you could purchase a home warranty plan that covers these repairs and replacements of home systems and appliances. Check out the best home warranty companies offering reliable services. Your home deserves the best!




When you buy a house, don’t just consider the down payment, taxes, and renovation costs. Also include the annual maintenance costs. These are recurring charges you need to pay along with your house. There is no definitive range or rule that can exactly anticipate how much you might have to spend, so do what you can to be as prepared as possible.



Written exclusively for by Sophie Williams.
Sophie Williams is a professional content marketer. She leverages analytical skills from a STEM degree to give an edge to her passion for writing. She is always thinking about how to produce engaging content for her readers. She enjoys finding ways to minimize her living costs and help other struggling homeowners with the same. She also loves writing long rants on books and movies.


Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. All opinions expressed in this article constitute the judgment of the author(s) as of the date of this article and are subject to change with notice. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

How We Understand Financial Freedom, and How We Actually Should

How We Understand Financial Freedom, and How We Actually Should


Financial freedom is especially important for young people, particularly students. They frequently overspend on online courses, products, clothing, and even essay review services like Best Writers Online.

As a result, they feel a sense of financial deficiency. To avoid this problem in the future, it is critical to learn how to properly manage one’s budget.


What Exactly Do You Mean by Financial Freedom?

What prevents most people from following their dreams? Money, only money! This represents a specific stage of life. Some may object, saying, “But money does not make you happy!”

And it is true. The primary mission of money is to provide people with safety and freedom. Also, it provides us with the opportunity to live our lives the way we wish. Indeed, it is difficult to argue the point that it is easier to be happy with money than with an empty wallet.

Financial freedom allows you to kill two birds with one stone: have enough resources for living and be happy at any stage of your life.


What Is Financial Freedom?

Financial freedom is defined as a state in which a person’s income received without active participation (passive income) significantly exceeds his expenses for maintaining the desired lifestyle.


Why Is Financial Freedom Important?

Being financially free means that you have the freedom to:

  • Choose your lifestyle;
  • Buy the things you want regardless of your regular salary;
  • Spend money on entertainment;
  • Invest in projects and the property estate sector;
  • Avoid credit loans;
  • Have access to free money whenever you need it.

Both children and adults must learn the fundamentals of financial freedom—the sooner, the better. Adults can take a long time to learn something new, putting off all their business until later.

The most effective option, of course, is to teach students, who are more intellectually flexible than adults and who have a greater understanding of why this is important than schoolchildren.

Students usually spend most of their time writing essays or scientific papers. However, financial literacy is a much more valuable issue that they will face once they become self-sufficient. As a result, it can be wise to delegate written work to the professionals of an essay review service such as Writing Judge in order to have more time to focus on learning the basics of financial freedom.


How Do You Achieve Financial Freedom?

How many of us have wished to be financially independent but concluded that it was out of our reach? We frequently blame our circumstances, other people, or even our bad luck.

However, with proper planning, anything is possible. Here are some pointers to get you started:

#1 – Time Is More Important Than Money

A person who has achieved financial independence begins to see boring meetings and routine work in a new light. He understands that his time has a higher value, and it is better to spend it on important activities. Things that must be done but are of no interest can always be delegated to someone else.

#2 – Always Have Sources of Additional Income

To be financially independent, you must find a passive source of income. Do not refer to an additional source of income as a part-time job; it could simply be another job.

In most cases, one can do it for free or for a small amount of money at first until he improves his skills in a specific field. Over time, this source of passive income can be even more profitable than the main job.

#3 – Make It Possible for Your Money to Grow

The traditional methods of saving money under a pillow or in a home safe are already out of date. Inflation quickly depletes these savings.

Financial crises often leave you wondering whether you should invest. There are various ways to generate passive income from assets, including stocks, alternative investments, and real estate. Simply select what is best for you.

There have never been better strategies to develop equity in the past. The miracle of compound interest will dramatically improve your savings. It may appear complicated, but everything is straightforward: if you constantly contribute, you will receive a proportion of the growing amount each year.

Open a brokerage or an individual investment account and learn how to invest on your own. There are numerous competent materials and courses available on the Internet that can be mastered for free. Create a managed portfolio and replenish it once a month. Or determine if it’s time to hire a financial advisor for guidance.

#4 – Be Deliberate in Your Actions

A person seeking financial freedom does not believe in lotteries and does not invest large sums simply because “everyone does it.” Follow your instincts rather than trends and popular opinion.

#5 – Income Should Be Carefully Spread Out

Invest in various areas to avoid losing everything to the next “black swan.” Even if some assets depreciate, the rest will serve as insurance.

#6 – Read Books on Finance

Read books about financial freedom and ways to achieve it—not to impress others but to expand your knowledge. One devotes a significant amount of time to earning money.

Understanding how money works make sense if you want to dispose of it competently. The wise man researches customer reviews before purchasing household appliances. The same thing applies to money. Learn from the best in this field.

#7 – Plan Ahead of Time for Potential Crises

The world has experienced financial turmoil over the last few decades, including the financial crisis of 2008 and the pandemic-induced recession. It is worthwhile to keep an eye out for signs of impending crises to strengthen your investments’ financial situation. This will also aid in the proper management of available funds.

#8 – Do Not Spend Money on Things That Are Not Necessary at the Time

Goods on sale, incomprehensible investments, and other unnecessary categories of expenses do not contribute to financial freedom. Give up impulsive spending.

#9 – Use Your Money to Help Others

Not everyone is a philanthropist. A small donation, on the other hand, is accessible to nearly everyone. When we help the rest of the world, we benefit ourselves. And this alters our relationship with money.

#10 – Manage Your Monthly Budget

The best way to ensure that all bills are paid and savings are replenished is to create and stick to a monthly budget. This is a common routine that aids in the achievement of financial objectives while discouraging unplanned spending.

It is not difficult to live a simple life. Many wealthy people developed the habit of living within their means before becoming wealthy. To do so, you must analyze costs on a regular basis and find reasonable ways to save without sacrificing your quality of life. For example, when you go shopping, don’t go to the city center where prices are higher; instead, head to a remote quarter where the cost of the same goods is much lower.

#11 – Automate All Your Payments

On payday, distribute funds depending on monthly needs. If you pay a loan, send payment as soon as you receive it. The same is true for savings: it is preferable to set aside a specific amount at the beginning of the month and then spend the remainder.

This also applies to utility bills, mobile communications, and the Internet. All essential payments can be set up in your bank application so you do not even have to send them manually. There will be no incentive to put something off until later.

#12 – Invest in Your Health

Invest in your health by seeing doctors, particularly dentists, on a regular basis. Many difficulties can be avoided by simply altering one’s way of living.

Outdoor walks, healthy eating, and exercise therapy help to prevent several common ailments, such as hypertension, gastritis, diabetes, and obesity. Remember that poor health can compel you to retire earlier than expected and earn a smaller monthly income.



Control revenue and spending, investigate investment opportunities, and begin accumulating money as soon as possible. Financial freedom is more than just a certain level of wealth. This is an opportunity to live debt-free, think strategically, and understand how to manage finances for the benefit of your family and others.




Written exclusively for by Lafond Wanda
Lafond Wanda is a professional content writer, copywriter, content strategist, and communications consultant. She started young with her writing career from being a high school writer to a university editor, and now she is a writer in professional writing platforms— her years of expertise have honed her skills to create compelling and results-driven content every single time.



Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and it is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.