Definition
Financial Independence
Having enough income or savings to cover your expenses without needing to work.
This term appears in The Budget Ledger's practical finance glossary.
Financial independence is the point where your investments and savings can cover your living costs, so working becomes a choice rather than a necessity. It is the long-term destination behind a high savings rate.
It is reached by widening the gap between income and spending for years and investing the difference, letting compound interest do the heavy lifting over time.