Today, I want to talk about how you can reach financial independence in three simple steps. OK, so this is assuming that you're running a practice. If you're not, you have to add another step (which is quit your job and start a practice).

Step 1 – choose financial independence. Pretty simple. Make this the game you’re playing with your money. Pick a number that would mean you wouldn’t have to work again. On our asset ladder we say $3M in net assets means financial independence, and $5M equals financial freedom. You can pick either of these, or your own number.

Cool – that was easy. We’re a third of the way there.

Step 1.5 – separate your personal finances from your practice finances. I’m sneaking this one in as a bonus step because a. its not strictly necessary, and b. because surely, surely, you’ve already done this. If not, get yourself a separate bank account, a separate credit card and decent bookkeeper. Then start paying yourself a salary from your practice.

Step 2 – get to blue belt. I said simple, not necessarily easy.

Step 2.5 – Build up 3 months of operating expenses in your practice bank account. OK, so this is starting to look like five steps and not three. But again, this is a bit of a bonus one and not strictly necessary. So if you pay yourself $10k a month to live on and you have another $5k a month that your practice spends on other stuff, build up to $45k in the practice bank account. It just makes everything better knowing that whether or not you make a sale this week, or that invoice gets paid on time, everyone will be fine.

Step 3 – invest $10k - $20k a month into appreciating assets outside your practice. Continue for a decade.

And that’s it.

(Please insert your favourite disclaimer here, something about me not being a financial advisor, this not being financial advice, me not knowing your personal circumstances, yada yada yada.)