The 6 Steps to Financial Independence

Did you know better financial circumstances are just steps away? By understanding the following six steps to financial independence and their corresponding tips, and putting them into action, you give yourself a money makeover.

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Step 6

Debt Management

Eliminating debt, or just getting it under control, can transform your finances. Less debt means greater financial strength, so you can start saving toward an emergency fund or other financial goals.

If debt management is one of your problem areas, and you’re in the U.S., then you’re not alone. On average, U.S. households carry revolving credit card balances of $9,333.* These are balances that carry from one month to the next. Up north, more than half of Canadians (58%) pay their credit card balance, if full each month, avoiding credit card debt and interest payments.**

The good news? There’s a way to clear up the financial blemishes that debt creates and have a better financial outlook. For simple tips and strategies, read on.

* Average Credit Card Debt in America: March 2020, ValuePenguin, March 2020 
** Focus: Household Borrowing in Canada, Canadian Bankers Association, December 11, 2019

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Helpful Tips – Step 1: Debt Management

Adding $10 Pays Off: Give up a small luxury

Try it at least once a month and put the money you would have spent toward your credit card debt. This small sacrifice can make a big difference in the long run.

For example:

Suppose you owe $1,500 on a credit card with an interest rate of 18%.

If you make a minimum payment of $37 per month, you would pay off your debt in 63 months. But if you pay $47, you will pay it off in 44 months and save $272 in interest.

Source: Credit Card Debt Calculator,

WFG consists of:

In the United States, World Financial Group Insurance Agency, Inc., World Financial Group Insurance Agency of Hawaii, Inc., World Financial Group Insurance Agency of Massachusetts, Inc., World Financial Insurance Agency, Inc. and/or WFG Insurance Agency of Puerto Rico, Inc., which offer insurance products.

Headquarters: 11315 Johns Creek Parkway, Johns Creek, GA 30097-1517. Phone: 770.453.9300
In Canada, World Financial Group Insurance Agency of Canada Inc., which offers life insurance and segregated funds.
Headquarters: 5000 Yonge Street, Suite 800, Toronto, ON M2N 7E9. Phone: 416.225.2121

Meet The Rule of 72: It's a formula that shows how interest can work for you...Or against you

This concept can show how your money can double in savings. It can also demonstrate the approximate amount of time it takes for your debt to double at a constant rate of return compounded over time.

This simple example shows how it works:

Mary owes $10,000 on a loan, and the interest rate she’s charged is 6% per year compounded annually. If she doesn’t make any payments, at this interest rate it would take twelve years for the amount she owes to double.

The Rule of 72:


Rule of Thumb:

Pay down debt quickly. And, make sure extra payments are applied to the principal.

Divide 72 by an annual interest rate to calculate approximately how many years it takes for money to double (assuming the interest is compounded annually). Keep in mind that this is just a mathematical concept. Interest rates will fluctuate over time, so the period in which money can double cannot be determined with certainty. Additionally, this hypothetical example does not reflect any taxes, expenses, or fees associated with any specific product. If these costs were reflected the amounts shown would be lower and the time to double would be longer.

Rollout Debt Roll-Up: Want to pay down debt more quickly?

Then debt roll-up, also known as the snowball method, may be the strategy for you.

Getting started is easy – Simply:
  • Commit to stop borrowing
  • List all your debts in order of amount, from those with the lowest to the highest balance, or by interest rate, from highest to lowest
  • Pay more than the minimum payment each month on Debt 1, while paying the minimum payment on the other debts
  • Once you've paid Debt 1’s balance, add the amount you were making on each Debt 1 payment to each of Debt 2’s minimum monthly payments, while continuing to make the minimum payments on your additional debts
  • Repeat the process until all your debts have been paid

You’ll get on a roll and pay off your debts faster. After one is fully paid off, you’ll have the momentum and cash flow to tackle the rest. If you focus on paying off balances with the highest interest, you will pay off your debts with a lower total amount of interest paid.

Would you like to discuss this concept with a financial services professional? Reach out to your licensed WFG agent today.

Get a Handle On Debt

When basic debt management strategies are not enough, consider debt consolidation

Then debt roll-up, also known as the snowball method, may be the strategy for you.

Getting started is easy – Simply:

Debt consolidation is a form of debt refinancing in which you take out one loan to pay off many other loans, especially high-interest consumer debt.

Debt consolidation can make managing your debts easier because it eliminates the number of creditors to pay each month. It also enables you to obtain an overall lower interest rate on your debt, so you can start working on other financial goals sooner.

Here are two ways people consolidate their debts:

Would you like to discuss this concept with a financial services professional? Reach out to your licensed WFG agent today.

1. Enter a debt consolidation program: Many nonprofit companies provide this service. They reach out to your creditors and arrange for you to make one payment to the debt consolidation organization, which is then used to pay your creditors. As part of their service, you get credit counseling that can help you manage your finances.

2. Debt consolidation loans: If you have a decent credit score and/or collateral such as a home, you may be able to get a debt consolidation loan. Your lender will either use the funds you’ve borrowed to pay your debts to each creditor, or deposit the funds into your bank account, so that you can then pay off the debts with the loan proceeds.  

Are you ready to take a big step in reducing debt?
Consider all your options, including debt consolidation.


Emergency Fund

When your debt is under control, you can free up money for an emergency fund. This cash reserve can be a lifesaver if you were to have an unexpected financial setback like a job loss or major car repair.

Unfortunately, Canadians or Americans are not taking this important step to financial independence. In a recent survey, nearly three in 10 (28%) Of American respondents indicated that they do not have an emergency fund.* A study north of the border found that 49% of Canadians are not saving for an emergency.**

Make sure you’re not putting your financial fitness at risk. An emergency fund can be the financial tool you need to protect your lifestyle and stay on track to reach your short- and long-term financial goals. The following tips may help you build and replenish one.

* A growing percentage of American have no emergency savings whatsoever, Bankrate, July 1, 2019 
** Almost half of Canadians have no emergency funds, Which Mortgage, January 9, 2019 

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Helpful Tips – Step 2: Emergency Fund

Build an Emergency Fund: When facing an unexpected financial challenge...

Don’t let your back up be credit cards or payday loans. Build your cash reserves today.

Here's a simple way to start your emergency fund, or add to the one you already have:

Choose a different amount to save each week depending on your cash flow. In 52 weeks – or 1 year – you will have saved $1,000. Here's what your amount/week could look like:


Be sure to keep this money in a savings account or anywhere else you can access it easily.

Once you reach $1,000, keep going. With three to six months of expenses in an emergency fund, you should be able to handle a car repair, medical expense or sudden job loss.

Customize Your Emergency Fund: Design an Emergency Fund That’s Right For You

Financial experts believe people should have at least three to six months in savings to cover expenses just in case of an emergency. Since everyone’s situation is different, it’s important to look at your own particular circumstances to decide how much you need.

Here are some questions to help you determine the target dollar amount for your emergency fund:

How much do I need to cover essential expenses?

Tally up the things you cannot do without or must always pay for to maintain your financial foundation:

  • Housing: Rent or mortgage payments
  • Utilities
  • Debt
  • Food
  • Insurance: health, auto, home, life
  • Personal care expenses
  • Ongoing medical expenses, such as prescription medicine
  • Transportation

Do I need to save more? If you have a fluctuating income or if it typically takes you a long time to find a job, consider having more than three to six months’ worth of emergency expenses. Additionally, during a recession, find ways to add to your emergency fund to give yourself extra security. However, try not to go overboard by putting excessive cash toward emergency savings, because that money could be put to work on your other financial goals.

Do You Need More Help to Build Your Emergency Fund?

Here a few useful resources:

United States – The Congressionally chartered Federal Financial Literacy and Education Commission offers tips to help you jumpstart your savings.

Canada – The Financial Consumer Agency of Canada offers a calculator that can help you build an emergency fund.

It’s helpful to consult a financial services professional as you develop your emergency fund strategy. Reach out to a licensed WFG agent today.

Emergency Funds Need Proper Care and Protection: How to maintain your emergency fund

An emergency fund should be properly cared for and maintained at all times, because it can be the lifeline you need during a financial challenge. Here are some tips to help your Emergency Fund thrive.

Grow It: Decide how much you need to save, based on your expenses, then start growing it systematically. A lot of people use automatic deposits into their bank account, which can be scheduled to stop after a certain number of deposits. No matter where you decide to grow it – a savings account or under your mattress -- make sure it’s easy to access and won’t decline in value.

Prune It: Check your emergency savings periodically to make sure you’re not putting aside too much. Any excess cash may be put to better use in a short-term savings fund for financial goals you’d like to reach within two or three years.

Replenish It: Every time you withdraw money from your emergency fund, make it a priority to replace it as soon as you can.

A financial professional can help you with emergency fund strategies tailored to your situation. Contact a licensed WFG associate today.

Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money. 
– Federal Reserve
Source:, May 2018

Cash Flow

Change your cash flow and change your life! To start this powerful transformation, it helps to understand how it works.

Knowing how much cash you have on hand after you’ve met your monthly financial obligations is a good indicator of your financial strength. Negative cash flow may indicate that you’re spending more than you’re earning. Positive cash flow means you’re spending less than you earn and you have cash left over that can be used to pay down debt faster or put toward your goals and dreams.

It’s key to remember that when cash flow is strong and positive, you can use your money to your advantage. Here are some tips to get you there.

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Helpful Tips – Step 3: Cash Flow

Rock Your Finances With a Budget: do Heroes have budgets?

You better believe it! Many people have gone from zero to hero with their finances simply by creating a budget and sticking to it. If you’re having money challenges, it’s time you take note of the power of a budget.

A budget can help you:
  • Understand your financial situation
  • Cut back on expenses and kick unhealthy financial habits
  • Control your spending
  • Build financial fitness

Make a budget part of your financial strategy. This worksheet can help you get started.*

* This hyperlink will forward you to a third party website. Transamerica does not control, guarantee, endorse, or approve the information, products, services, or any content maintained by third parties. Transamerica expressly disclaims any responsibility for the content, accuracy, and quality of the products and services advertised on the third party site. The third party content should not be interpreted as legal, tax, or investment advice.

Join The Gig Economy: What's the gig economy?

It’s the growing online, on-demand economy where organizations and independent workers engage in short-term work arrangements for services such as ride sharing, accommodation sharing, dog walking, baby-sitting and more. The word “gig” refers to the transient nature of the job itself.

It’s estimated that 36% of U.S. workers take part in the gig economy and 33% of companies extensively use gig workers. In Canada, more than 40% of the country’s millennials have participated in the gig economy over the past five years.*  Want to know more?

Here are just a few gig examples to consider:
  • Start a part-time business in the financial services industry teaching people about how money works
  • Turn your passion into profit by selling the things you make as a hobby
  • Leverage your professional expertise by taking freelance/consulting projects or tutoring
  • Engage in the gig economy by walking dogs, babysitting or driving for a ridesharing company
  • Rent out a spare room, your car, your clothes or other resources you have
Here are a few reasons people join the gig economy:
  • To have an additional income stream
  • To be their own boss

If the gig economy is for you, get online and find a good place to market your services. Possible search terms: gigging platform, ride sharing, accommodation sharing or freelancing.

* Sources: Gig Economy: Definition, Statistics and Trends [2020 Update], Zety, January 9, 2020. 40% of Canada’s Millennials are part of the gig economy’: Study Finds, BNN Bloomberg, November 26, 2019.

The Financial Services Industry Needs You: Serve a Growing Need

The need for financial services professionals is growing as more baby-boomer advisors retire each year.* If this trend continues and no one replaces them, there will be fewer financial services professionals to provide guidance and services to middle-income families.

The Financial Services Industry's Opportunity For You

This industry is wide open, and you don’t need a business or finance degree to become successful here. People from all majors, occupations and backgrounds are high achievers in this industry. Some traits that can help you succeed as a financial services professional are:

People Skills: Being able to network and connect with people helps you build a client base

A desire to learn: You have to be able to understand financial concepts, industry regulations, financial products and how to appropriately serve clients

Coach-ability: As you grow your knowledge and skills, it helps to accept the guidance and mentoring from more experienced financial services professionals

A willingness to follow proven strategies : There are established methods for serving clients – you’ll advance fast if you use them rather than creating your own

An Entrepreneurial Mindset: Many people who want to own and grow a business find success in this industry

If you have one or more of these traits, why not consider becoming a financial services business owner? Talk to a WFG agent to learn more.

* As Financial Advisor Shortage Looms, Colleges look to Fill the Talent Gap, CNBC, May 21, 2019.

Attention Veterans–Serve Your Community as an Entrepreneur: Consider becoming a veteran entrepreneur

Thousands of veterans in the United States and Canada have become business owners as a way to support their families, gain the flexibility they need to transition into civilian life, and continue to do good for their communities.

Their military experiences have given them the key skills an entrepreneur needs, including:
  • Leadership skills
  • Problem-solving skills
  • Team work
  • Discipline
Industries like the financial services industry are ready-made for veteran entrepreneurs.

The financial services industry – and your country -- is in need of entrepreneurs who are willing to tackle a huge problem: The millions of middle income families whose futures are not financially secure.

Financial services businesses that excel in helping these families are often led by hard-working, purpose-driven entrepreneurs, who are capable of leading a collaborative and productive team. These leaders have many attributes that veterans have in spades.  

It’s Time to Capitalize on Your Excellent Training

Traits that helped you effectively protect your country can be an asset to you, your family and community if you decide to serve as a financial services entrepreneur. And an excellent place to start your business is with WFG.

Breaking into this industry may seem challenging, but it’s not. Your WFG agent can help you get started.


Proper Protection

Strong cash flow, an emergency fund and managing your debt are just the beginning of financial independence. Proper protection can bring it even more in reach.

Life insurance makes it easier for your family to move on if something were to happen to you.

The challenge is determining what type is best for you and how much you need. The following tips can help you understand how life insurance works, to help you have a productive discussion about your options with your life insurance agent.

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Helpful Tips – Step 4: Proper Protection

Protect The Ones Your Love: Life insurance is an important component of a sound financial strategy

If you have too little, your family may not be able to have a reasonable standard of living if you were to pass away unexpectedly. If you have too much, you could be sacrificing something you need right now. Right-size your coverage and use the cash you save to reduce debt, build an emergency fund or prepare for a better future.

The DIME Method* is a way to determine how much life insurance you need:

Talk to a licensed WFG insurance agent, who can help you determine how much life insurance you need.

* The DIME Method is only one approach used to determine a client's insurable need. An insurable need of more than 10 times the client's current income may not be accepted by the broker-dealer unless special exceptions apply.

** Anticipated college or university costs

Get It Right: When it comes to life insurance...

A basic rule of thumb is to have enough to provide approximately 10 times your annual family income. For example, if your current household income is $50,000, you may want to consider having $500,000 in life insurance protection.

But that simple calculation doesn’t capture other variables that can affect your life insurance needs.

Here’s another approach:

1. Think about your family’s future and assign a dollar amount to each of these items:

  • Your long-term and/or short-term debt: ________
  • Your long-term goals (for example, projected costs for your children’s education): ________
  • The insured’s annual income times the number of years it will be needed: ________
  • The amount you want to set aside for funeral costs and/or emergency funds: ________

2. Add up the numbers above

3. Now, think about your existing assets, such as savings or real estate, and subtract them from those costs

The number you get provides a better starting point to determine your actual life insurance needs.

Your next step: Meet with a licensed life insurance agent for a thorough evaluation of your needs and guidance on which type of insurance is appropriate for you.

Trending Now–Life Insurance: Hey millennials!

You’re young and healthy. You should strongly consider purchasing life insurance, and here’s why:

People who are young, healthy and have a good family health history are likely to receive some of the lowest rates on life insurance. And it’s best to get it when you’re young because that is when you are most insurable. So why not purchase it now?

Life insurance can help you to:
  • Provide financial support for loved ones who may depend on you now
  • Create a strong financial foundation for your future
  • Protect the family you may have in the future

Talk to an insurance professional to learn more about the value of life insurance.

Term or Perm? Find Your Fit: Before you buy life insurance...

Your lifestyle and financial situation will determine what kind of life insurance you need. Do you need Term or Permanent? There is a difference.

Term life insurance provides coverage for a specific period, such as 10 or 20 years – or more. It can be renewed when the term is over, usually at a higher rate. However, it does not build a cash value.

Permanent life insurance offers lifelong financial protection as long as the policy’s premium is paid up until the death of the insured. It also builds cash value that’s funded by a portion of the premiums the policyholder pays. The policyholder can access this cash value, if needed, but any outstanding loans are subtracted from the death benefit when it is paid.

There are several types of permanent life insurance:
  • Indexed Universal Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance

They differ in whether the premiums are level or variable and how the cash value accumulates.

Talk to a financial professional today and find out what type of life insurance is best for you.


Build Wealth

By building wealth you gain the power to work toward your long- and short-term financial goals.

You don’t have to wait until you’ve completed steps one through four to get started. Putting aside a little cash toward your future goals makes sense even as you work on managing debt, building an emergency fund, strengthening cash flow and protecting the ones you love. By doing so, you give this money – even if it’s just a few dollars –  more time to grow and, as you conquer your financial challenges, you’ll free up even more cash for wealth-building.

Here are some things to consider and discuss with your licensed financial professional.

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Helpful Tips – Step 5: Build Wealth

The Wealth Formula: Easier than E=MC2

It's a straightforward way to understand the impact inflation and taxes can have on your savings as you prepare for your financial future.

The Wealth Formula:
It illustrates how:
  • Interest rates can go up or down
  • The value of the money you save today may be worth less tomorrow
  • Taxes can reduce your overall savings

Even though the formula is simple, making it work for you can be complicated. Seek the guidance of a financial professional who can help make sure you're on track to reach your goals.

* Neither World Financial Group nor its agents may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal professionals regarding their particular situation and the concepts presented herein.

** This is a concept/goal developed by WFG for illustrative purposes only. The term 'wealth' is subjective and must be defined on an individual basis.

Use Time Like a Boss: If you’re in your twenties...

Are you too young to start saving for retirement? Not at all. In fact, now’s the best time.

Here's Why:

Let’s say you’re 25 and your retirement goal is to have $1 million saved by the time you’re 65. If you start saving $655.30 per month, you’ll reach your goal in 40 years. But if you wait until you’re 45, you’ll have to save $2,432.89 per month, which is a lot of money when you may have a family and a mortgage. If you only had 10 years to save, your monthly savings amount would need to be $6,439.88. With only 5 years, contributions would need to be $14,704.57 per month. That’s assuming that the money saved in all four of these scenarios are based on a monthly compounded rate of return in a hypothetical 5 percent tax-deferred account.

In this hypothetical example, a 5 percent compounded rate of return is assumed on hypothetical monthly investments over different time periods. The example is for illustrative purposes only and does not represent any specific investment. It is unlikely that any one rate of return will be sustained over time. This example does not reflect any taxes, or fees and charges associated with any investment. If they had been applied, the period of time to reach a $1 million retirement goal would be longer. Also, keep in mind, that income taxes are due on any gains when withdrawn.
46 percent of Americans don't know how much they have saved for  retirement, according to a new report.*
The key to a secure retirement is creating a strategy with a financial professional as soon as possible and then reviewing it each year.
* Source:, June 2019, "Here’s how much Americans have saved for retirement"

Preserve Wealth

Once you’ve built enough wealth to sustain yourself through your golden years, it’s time to think about your legacy. Having a financial plan in place can help you ensure your legacy reaches your intended heirs.

It’s best to make those preparations as soon as possible, because the future is unpredictable.

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Helpful Tips – Step 6: Preserve Wealth

Keep Calm: Focus on a wealth preservation strategy

Not even close. Only 49% of Canadian adults and just 32% of U.S. adults currently have estate preservation documents such as a will or living trust.* These numbers are alarming because they mean that many families run the risk of having their estates settled in court. That’s not a good prospect, especially for families with children under 18.

Make estate preservation part of your strategy and be sure to have a will.

So how do you get your papers in order?

Work with a qualified lawyer to put an estate plan in place that:

  • Ensures your legacy reaches your intended heirs
  • Helps to manage estate and/or other taxes
  • Sets up medical and financial powers of attorney, so that someone can take care of you should you become incapacitated

When you get started with your financial professional, you may be surprised how quick and affordable it can be to check off the important step of putting your will or living trust in place.

* 2020 Estate Planning and Wills Study,, January 2020. Half of Canadians Don’t Have a Will: Report, Advisor’s Edge.

Note: Neither World Financial Group nor its agents may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal professionals regarding their particular situation and the concepts presented herein.
WFG consists of:

In the United States, World Financial Group Insurance Agency, Inc., World Financial Group Insurance Agency of Hawaii, Inc., World Financial Group Insurance Agency of Massachusetts, Inc., World Financial Insurance Agency, Inc. and/or WFG Insurance Agency of Puerto Rico, Inc., which offer insurance products.Headquarters: 11315 Johns Creek Parkway, Johns Creek, GA 30097-1517. Phone: 770.453.9300

In Canada, World Financial Group Insurance Agency of Canada Inc., which offers life insurance and segregated funds.

Headquarters: 5000 Yonge Street, Suite 800, Toronto, ON M2N 7E9. Phone: 416.225.2121