We need to be financially independent because we cannot rely on the government to help us or save us.

We are in the midst of a housing recession and a “credit crunch.”  Millions of people are facing foreclosure, and millions of others cannot obtain financing due to lenders’ tightening their restrictions for mortgages.  The price of gasoline is through the roof.  The value of the U.S. dollar is falling.  Consumer prices overall are increasing.

Everyone is turning to the government for help.  Although it seems possible that the government can stimulate the economy or bail out ailing homeowners (whether it’s through tax rebates, handing billions of dollars to lenders, or freezing interest rates, etc.), the government (like individuals and corporations) has financial limits.  It is not a god-like entity; rather, it is very mortal.  For example, it cannot print more money because inflation will skyrocket.  It also cannot continue to borrow money from foreign countries (like China) because our deficit will become insurmountable.  Moreover, it cannot regulate against the ebb and flow of market forces.  

These circumstances impose limits on what the government can do.  Thus, we, as individuals, cannot always rely on it when we need assistance.  Today, it appears, many people give in to this mentality–that the government is this paternalistic entity that will bail us out of economic turmoil or financial hardship.  However, they do not realize that, because of the limits described above, the government cannot swoop in and save us every time.  

A close look at these limits should uncover an urgency within all of us: We need to prepare ourselves financially.  We need to become more self-sufficient and create additional streams of income and cash flow.  When, for example, the price of gasoline spikes to $4 or $5 per gallon, some individuals will have to allocate HALF of their paychecks to gasoline.  That scenario is alarming, and I dare not think about where those individuals would get the money to pay for essential items like food and housing.   

If, however, we could liberate ourselves from paychecks, salaries, and social security payments, etc., we would feel indifference towards the rising price of gasoline.  If we could develop our creativity and ideas and start businesses, or invest prudently in cash-producing assets (like real estate), or harness the power of the Internet to create passive income, we would eliminate our heavy reliance on jobs.  Most importantly, we would eliminate our reliance on a strong economy and on a paternalistic government.  Instead, we would be contributing to the economy and helping to shape it so that it helps others. 

I know that this line of thinking will not impact many people.  But I do believe that there are a lot of individuals out there like me who recognize that we cannot expect the government always to help us.  Rather, we must help ourselves.  We certainly have the ability and the drive to achieve financial independence.  If there ever was a time to focus on that goal, it is now.      

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