Question:
I have now managed to pay off all my debt except my house and my car. I have got rid of the student loan, the credit cards and the clothing accounts. I desperately want to be financially independent in the next five years. Do you have any suggestions?

Answer:
Getting rid of short-term debt is certainly a good start.

You did not give me your age or how much money you have saved. The bad news is that it takes the average salaried person a good 25 years of saving in order to become financially independent.

So what is financial independence? It means that the money you have saved yields enough growth to enable you to live without working or using the capital invested. Put another way, if you were 60 years old today, earning a salary of R8000 per month, you would need to have saved about R1.5-million with no debts. This would give you about 20 years of income, provided that you were very conservative and passing on the Moet.

So realistically, five years is a tall order. However, to get on the path to financial fitness, you now need to tackle both the car loan and the house. Pay off the car and then use the money you save on those payments to pay off your bond quicker. By doing this you can shave 10 years off your bond.

When you are completely debt free the world opens up. You can save large chunks of your income and still live a great life.