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Written by: Corey Janoff 

Fourth of July is this week and I can’t think of a better topic to write about than financial independence!  Everyone wants to achieve financial independence, whether you are making large strides or taking baby steps.  Not everyone has a plan to get there, but everyone would like to be in a position where working for a paycheck is optional.  When it comes to getting on track for financial independence, there are two types of people: 

  1. The people who are on a mission from day one to become financially independent.  They make a priority at the beginning of their career to live well below their means and set aside a significant portion of their paycheck for their future (sometimes over half of their take-home pay!).   

  1. Everyone else. 

Unless you catch the bug early, it is likely you fall into the “everyone else” category.  You would like to become financially independent one day, however bills and living expenses get in the way of aggressively saving for your future.  Making drastic changes is out of the question.  So, without completely overhauling your life, how can you baby step your way to financial independence? 

Small changes repeated consistently over time can lead to big results.  For example, if you gain two pounds in a year, it is not noticeable.  If you continue to gain 2 pounds ever year, 20 years from now you will be 40 pounds heavier 😳.  

It works the other way two.  If you are overweight and you shed two pounds a year, 20 years from now you will be 40 pounds lighter.  Back to your high school weight just in time for your 40-year reunion!  

Now, apply this to your finances and you can see how small baby steps in the right direction can lead to big results over time.  

Come Up With a Game Plan 

When we spoke with Dr. Aaron Lewis this spring on our Financial Clarity for Doctors podcast about navigating a Covid-19 market, he kept getting back to the same message that it all starts with having a plan.   

French writer, Antoine de Saint-Exupery had a great quote: “A goal without a plan is just a wish.”  Might as well be looking for shooting stars to wish upon. 

If you have a plan of action outlined, you will have some general direction for how to get to where you want to go.  Also, it will give you confidence that you can actually get there!  If you have smaller checkpoints along the way, you can use those to gauge your progress.   

I like to start big and work backwards.  Set a target, set a date and work from there.  Let’s say you conclude you need $4 million to be financially independent.  (Related: How Much Money Does a Doctor Need to Retire?).   

If you are 30 years old and you want to have $4M saved up by the time you are 60, that is fantastic.  Working backwards, maybe we aim for $2M by age 50, $1M by age 40, $400k by age 35.  If you invest $70k/year and assume it can grow a little, that should get you to your $400k goal by age 35.   

Breaking it down even further, max out your 401k ($19,500), max out your and your spouse’s Backdoor Roth IRA’s ($6,000 each), and invest another $3,200/month into a taxable brokerage account.   

Whatever your circumstances and goals are, developing a plan to get to your end goal will help keep you focused and on track.   

Given the theme of this post is baby stepping your way to financial independence, small steps repeated over time can lead to big results.  Below are some of those baby steps you can take. 

IRA accounts

Save More Tomorrow 

Economist Richard Thaler helped pioneer the concept of save more tomorrow.  It was originally implemented in larger workplace retirement plans where people were automatically enrolled in the company retirement plan at a set contribution rate (usually between 3-6% of their salary).  Every year, their contribution rate would automatically increase by 1-2% until they hit the maximum contribution limit.  They found that employee retirement savings increased drastically by making these minor escalations automatic. 

If you are not already maxing out your retirement plan at work, which is $19,500/year for those of you with a 401k or 403b account (plus $6,500 if age 50+), increase the amount you are contributing.  If you don’t feel like ripping the Band-Aid off and going all the way up to the max, increase your contribution by 1-2% of your paycheck.  Set a reminder to do that again every 6 months or every year.  Every time you get a pay raise, make a point to increase your retirement contribution by a small percentage.  

If you are already maxing out your retirement plan(s) at work and IRA accounts each year, set up an automatic deposit to a brokerage account and make a point to gradually increase that periodically at regular intervals.   

Every little bit will add up over time.  If you invest $20,000/year for the next 25 years, assuming an average rate of return of 6% (not guaranteed of course), you would have $1.16M 25 years from now.   

If you increase the amount saved by 1,000/year, you would have $1.69M at the end of 25 years under the same assumptions above. 

If you increase the amount saved by $2,000/year, you would have $2.22M at the end of the 25 years, or almost double the amount you would have if you didn’t increase your savings rate by a small amount each year.  

Most of you reading this can sneeze $2,000/year, so why not make a point to add that to your investments and baby step your way to financial independence? 


Snowball Debt 

When you pay off a debt, take the monthly payment you just freed up and direct that towards another debt to get rid of it faster.  For example, if you have a $400/month car loan and you pay that off next month, rather than buying a new car and taking out a new $400/month car loan, keep driving the car.  Take the extra $400/month you now have and apply it to your student loans.  If your current student loan payment is $1,000/month and you start paying $400/month on it, you will have the student loan paid off about 40% faster! How big is that!? 

Once the student loan is paid off, take the $1,400/month that you now have freed up and start applying it to your mortgage.  You’ll have your mortgage paid off in no time and be debt free! 

You could also choose to apply the freed up monthly payment towards your long-term investments above.  Either way, the point is to use that money productively.  We discussed this more in depth in our Debt vs. Invest podcast episode.   

If you choose to increase lifestyle expenses with the monthly payment that is freed up after a debt is paid off, you won’t be accelerating your path towards financial independence.  So let’s make sure you continue to use that money productively towards your financial goals to continue accelerating at your target.  

financial clarity


4. Earn Extra Income 

Many of you have the opportunity to earn extra income.  That could mean picking up extra shifts at work, moonlighting, or even picking up a side gig (Related: 8 Side Hustles for Doctors).  The key is to use this extra money productively and put it towards your financial goals, whatever those goals may be. 

If your objective is financial independence, paying off debt and saving for your future are the two obvious choices.  You may also be saving up money for an investment that can create some passive income, such as a rental property (which is essentially the same thing as saving for your future, or paying off debt if you have a mortgage on that rental property).  College savings could be another goal of yours.   

Doesn’t matter, finding ways to increase your income can speed up your financial independence track.   

5.  Practice Being Content 

The late great poet, Christopher Wallace, better known as The Notorious B.I.G once collaborated to write a song titled Mo Money Mo Problems.  You’ve probably heard it.  While it’s great to shoot for the stars and strive for greatness, why not be content with what you have?  

If you lived in the developed world and earn over $75,000/year, odds are, more money and more stuff is not going to make you happier.  Sure, it can help you achieve your dreams, but maybe you should ask yourself why you have those lofty dreams in the first place.   

I don’t mean to get all philosophical on you here, but we should all take step off the hamster wheel of life for a moment and ask ourselves, what really makes us happy?  How do we structure our lives so we can have/do/experience more of that? 

Being content with what you have (or less than you have) can really speed up your path to financial independence.  You don’t have to be a total minimalist, but I’m sure we can all trim some fat somewhere.   

financial clarity for doctors


 6. Stop Comparing Yourself to Others 

I once wrote a blog post titled, Comparisons are a Roadblock to Financial Freedom. No matter how many riches you have, there is someone else out there who has more. 

I encourage you all to start listening to Laurie Santos’s podcast, The Happiness Lab. In the second episode of season 1 called The Unhappy Millionaire, they discuss how the ultra-wealthy have the same mental & emotional problems that the rest of us have when it comes to money!  Most of us feel that if we just had a little more money, that could solve all our problems.  Once you earn over about $75,000/year, happiness doesn’t increase. 

Think of your social circles.  Most of the people you interact with regularly are likely in a similar socioeconomic class as yourself.  The working class hang out with other working class folks.  Billionaires hang out with other billionaires.   

Some of you may feel iyou could earn an extra $20,000/year, you could afford a mortgage payment on a larger house and having an extra room for the kids to play in would make life a lot easier.  Your friend who makes a little more than you has that playroom for the kids to trash and it seems great for their family. 

The 12-year Macallan is pretty good.  But have you ever tried the 25-year?  The cab from Two-Buck Chuck was tasty in college, but once you try the cabs from Caymus Vineyards, you realize how much nicer it would be to drink that regularly instead.    

If you own an 8-seat private jet, but your friend has a 12-seater, you see how nice it is to have that extra space.  You may have a condo on the 5th floor of a building in mid-down Manhattan.  But if you could earn more money and afford the penthouse overlooking Central Park, that morning coffee would taste so much better! 

It never ends.  No matter how much you have, you can always imagine how much nicer it would be to have more, bigger, nicer things.  When you see others you know who appear to enjoy those things (at least in their Instagram photos they seem happy) you will want those things too! 

It’s really hard, but rather than comparing yourself to others and thinking, “If only my life was more like that…” say to yourself, “Oh that’s nice – good for them” and move on. 

How Will You Baby Step Your Way to Financial Independence 

Remember, little actions repeated consistently over time can lead to big results.  It may feel like an insurmountable task, but to move a mountain you have to start with one rock at a time.  The hardest part is starting.  Once you get going, you’ll be impressed with the progress you are making.   

Good luck! 


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Any examples are hypothetical and for illustrative purposes only. Investments involve the risk of loss, including total loss of principal.  Consult with your financial advisor before developing a financial strategy or before making any investment decisions.  


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