From Financial Independence to Independent Wealth: What’s the Difference?

Article Summary

• Financial independence and independent wealth are two different types of financial situations. 
• Financial independence refers to a lifestyle where all of your daily expenses are covered by passive income, such as real estate or investments. 
• Independent wealth refers to a lifestyle where work is no longer needed and financial planning focuses more on long-term wealth preservation.

Financial Independence to Independent Wealth: What Is The Difference?

It should come as no surprise that financial comfort exists on a spectrum. There are so many variables that factor into the various states of financial stability, and the concept of financial comfort itself is a subjective one that truly depends on the individual. There is, however, a difference between financial independence and independent wealth.

No one would argue that either position is one that offers a certain level of comfort and financial achievement, but the mechanics of each differ slightly. As far as similarities go, financial planning is usually a component of both. Creating a financial plan, for women inheriting wealth or women building wealth, is a path many take. 

It helps to better understand the type of financial position you are in.

Developing A Financial Action Plan

Long-term financial planning is a path many women choose to take, particularly if they are managing wealth, inheriting wealth or building wealth. The specifics of those plans differ based on each individual financial landscape.

Financial independence, for example, refers to individuals who are able to live comfortably off their passive income. In essence, their daily living expenses are covered. Examples of passive income include real estate holdings, investments or other business ventures that appreciate and offer returns. Ultimately, financially independent women enjoy a financially flexible lifestyle. That often equates to a lifestyle where work is optional. 

For women who are independently wealthy, work does not factor into the equation at all. At this advanced state of financial stability, wealth management for women focuses more on long-term wealth preservation by exploring estate planning, tax efficiency and legacy planning.

Your Financial Planning Checklist

Life has a way of moving fast, and that pace sometimes makes it difficult to give attention to things that deserve it. However, there are ways to know if it might be time to explore wealth management. It is also helpful to remember that wealth management does not have to be done alone. Many women find they feel more confident about their financial stability with financial plans that establish financial goals in line with their lifestyle goals. 

Many women choose to seek wealth management guidance if:

• They are consistently saving and investing.
• Their income has significantly grown.
• They received or expect to receive an inheritance.
• They are building a business or managing multiple income streams.
• They would like to retire early or create a work-optional lifestyle.
• They are wondering how to protect the wealth they have built.

At Svvy®, a service built by women for women, we understand what females are looking for. We have found that many women prefer to work with female-vetted financial advisors who understand their goals and values. We also understand that women building or managing wealth appreciate when a financial advisor communicates in a way that makes them feel confident. 

Many women also feel more comfortable when they work with an experienced financial advisor who is able to offer them support through all of the life transitions they will encounter, from career changes to inheritance to retirement. To facilitate that connection, we have developed a financial advisor matching quiz to help women find a professional who aligns well with them.  

To connect with a financial expert who is ready to help you manage your wealth, get matched with a Svvy® expert today.

Disclosure:This content is provided for general educational purposes only and does not constitute individualized investment, legal, or tax advice. Svvy® acts solely as a solicitor and connects and matches individuals with independent third-party financial professionals through a quiz-based matching process on the Svvy® Network. Matching is based on information provided through Svvy’s platform and does not constitute any advice. Any advice, recommendations, and services are provided only by the independent professional you choose to engage.