Major roadblocks to achieving financial independence

The road to achieving financial independence can be intimidating for the uninitiated. However, once on this path, once can realistically hope to achieve at least partial financial independence at some point in life.

Right approach is important for achieving financial independence. At the same time one needs to be cognizant about the factors that can prevent you from pursuing the goal of financial independence (and early retirement, if F.I.R.E. is in you scheme of things!)

What are the major stumbling blocks towards achieving financial independence?

Low base to begin with

Let’s get realistic. You need a good basic income to begin with, so that you are left with money for investing. So if you are looking to become financially independent in India with a monthly income of Rs. 25,000 in Mumbai, India or a monthly income of $4000 in New York, USA, then it may be a tough ask and even after cutting corners, you may not be able to.

High cost of living

Want to stay in a posh apartment in a posh locality? Want a swanky car – not anything less than Honda City or SUV? Want the latest iPhone brand every time? Love attending all the major concerts? Love your vacations and weekend parties? Love “shop till you drop” visit to malls?

Everything comes at a cost. While it is good to enjoy things you like, you also need to be cognizant about the fact that they may eat into your savings and prove to be a roadblock towards financial independence. So, prioritize where you want to spend money and where not. And the equivalence between splurging money and enjoying or being happy may not always be true!

Lifestyle inflation

If you are looking to upgrade your lifestyle with every increase in salary, designation or any position in life, you may be falling prey to lifestyle inflation. And lifestyle inflation can derail your financial plan.


Anything in excess can be bad. More so with addiction. Addictions like alcohol, smoking, gambling etc. are expensive and come not just at a financial cost – they can potentially ruin health,family life and peace of mind.

Get rich quickly schemes

It is not uncommon to see people fall prey to get rich quick schemes in pursuit of wealth or financial independence, and this is not just limited to ponzi schemes.

As a rule of thumb, I treat anyone offering or being confident of more than 12% annualized returns with suspicion. If expected returns are high, as many people are often promised in equities, real estate or even crypto currencies one needs to be aware of why is it expected to be so and not just go by the glossy brouchres or sales pitch. They may or may not be true, but one needs to make an informed decision.

Several people also lose money in derivative trading (few may have taken a loan for that – it is not too uncommon during a bull market) – because the potential for loss is as high as potential for gains, and unless someone has skin in the game it is likely to be a loss making proposition. So, there is loss and then there is the debt repayment, probably at a high interest rate. For every gainer, there are many more losers.

So, beware of such scheme and do your own research before jumping into it, if at all!

Taking unnecessary debt

Barring home loan (for your residence) most of the debts are bad. More so if they are things like consumer debt, personal loan or credit card outstanding over a prolonged period of time. Firstly, it may be an indication that you may be living beyond your means, and secondly there may be substantial ground to cover even before you start aspiring for financial independence.

No insurance

What happens if you are on course to financial independence and a health emergency comes up, which requires you to get hospitalized for a week? Your health insurance should be able to take care of a good chunk of it. But if you don’t have a health insurance, then …

Lack of adequate health insurance or life insurance can set you back in your pursuit of financial independence. You need to have a good risk mitigation plan if you need to be financially independent.


Avoiding the roadblocks are important to achieve financial independence. But just avoiding them is not enough. You need to stay on course with right approach. But being aware of what to avoid may be a good starting point.


3 thoughts on “Major roadblocks to achieving financial independence

  1. Hi
    Many people give up on financial independence because they dont have long term vision for it. They look at their savings account, get discouraged when they see not so much money inside it to invest and then give up and spend the rest because of the mentality of “Who cares? I am already poor, so most likely I would die poor too.”

    What most people dont know is that the younger you start, the less capital you need for investing due to compounding effect. Also, the younger you start, the more you can afford to make mistakes in investing than when you are old and have family commitments to manage. Maybe using visualisation to picture the day you dont have to work (or work so hard for your money) can provide encouragement to these group of uninitiated people. Then again, baby steps make a milestone (or many milestones to come)…

    1. Thanks for visiting my blog and sharing your thoughts.

      I agree with your point – A good start and visualization of what the future can hold if they strive for financial independence can help in getting started. Also, people with modest sources (not great income, but not too low also) can strive for partial financial independence to begin with- wherein your investments can cover your basic expenses, but you need some top up to feel financially secure.

  2. Hi N
    I personally dont have great income (like investment banker or lawyer or doctor) but I still managed to save a portion of my earnings to slowly invest over time. I properly started to invest when I was 23 (that was in 2013) and have slowly acquired financial assets ever since. It is possible to start out investing without a great income, you just need time. Hence the importance of starting early…

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