The Path to Financial Independence: Buying Back Your Time

In the financial industry, we see it every day.

In the financial industry, we see a lot of people trapped on a high-speed treadmill sprinting harder every year just to stay in the same place as mortgages climb and grocery bills skyrocket. Somehow, despite earning more than ever, it still feels hard to get ahead.

And eventually, almost everyone asks the same question — not about shares or interest rates, but about life:

“When can I stop working because I have to, and start working because I want to?”

That question sits at the heart of Financial Independence (FI).

In Australia in 2026, with cost-of-living pressures and housing front and centre, FI isn’t about becoming a millionaire or never working again. It’s about building a work-optional life.

So… what actually is Financial Independence?

Put simply, you’re financially independent when the income from your assets can cover your living expenses without relying on a pay cheque.

You might hear this talked about as the FIRE movement (Financial Independence, Retire Early). But the “retire” part often trips people up. FI doesn’t mean sitting on a beach doing nothing (unless you want to). It just means choice.

There are a few different flavours:

• Lean FI: A simple, no-frills lifestyle.

• Coast FI: Doing the heavy saving early, then just earning enough to cover day-to-day costs while investments compound in the background.

• Fat FI: More freedom, more travel, more comfort — with a higher price tag.

No version is “right” or “wrong”. The best one is the one that fits your life.

The Roadmap: 5 Real-World Steps to Financial Independence

FI doesn’t happen by accident. It’s the result of a clear strategy, built around Australia’s tax system, super rules, and property obsession.

Let’s break it down.

1. Find Your FI Number (Your Personal Finish Line)

Before you invest another dollar, you need to know what you’re aiming for.

Your FI number is simply the amount of invested money needed to support your lifestyle long-term.

A common guide is the Rule of 25:

Annual living expenses × 25

So if your household spends about $60,000 a year, your rough target is $1.5 million in investable assets.

Why 25? It’s based on the idea that you can withdraw around 4% per year from a well-diversified portfolio without running out of money.

Here’s the interesting part:

• Spend less → your FI number drops

• Invest more → you get there faster

FI isn’t just about earning more; it’s about being clear on what’s enough.

2. Deal with the “Bad” Debt First

Think of bad debt like dragging a parachute behind you. You can still move forward… just much slower.

In Australia, we tend to separate debt into two buckets:

• Bad debt: Credit cards, personal loans, car finance, Buy Now Pay Later

• Better-managed debt: Investment loans that may be tax-deductible

High-interest, non-deductible debt eats into cashflow and limits how much you can invest. Paying it down is often the fastest, lowest-risk “return” you’ll ever get.

What about HECS/HELP? It’s usually lower priority than credit cards, but it still reduces take-home pay and borrowing power — something that needs to be factored into your broader plan.

3. Use Superannuation (But Don’t Rely on It Alone)

Australia’s super system is one of the most powerful wealth-building tools anywhere, mainly because of how lightly it’s taxed.

Salary sacrificing into super can mean paying 15% tax instead of your marginal rate (which might be double that or more). Over time, that difference compounds massively.

The catch? You generally can’t touch super until around age 60.

So super is brilliant for funding the later part of your FI journey, but it won’t help much if you want to slow down at 45 or 50.

That’s where the next step comes in.

4. Build a “Bridge” Portfolio (Your Freedom Before 60)

Your bridge portfolio is what funds life before super becomes available.

This usually includes:

• Low-cost ETFs for diversified exposure to Australian and global markets

• Investment property, often using equity and leverage to accelerate growth

• The right ownership structures, so tax doesn’t undo all your hard work

The goal here is simple:

Cover your living costs from your own investments until super takes over.

When done well, this is what turns “retirement age” into a flexible choice — not a fixed date.

5. Watch Out for Lifestyle Creep

This one quietly derails more FI plans than bad investments ever do.

As income rises, it’s tempting to upgrade everything bigger house, a nicer car, and more convenience spending. None of these are “bad”… but they push the finish line further away.

Financial Independence lives in the gap between what you earn and what you spend.

You don’t need to live like a monk. You just need to be intentional, spending freely on what matters, and cutting back on what doesn’t.

The Bottom Line

Financial Independence isn’t just a mindset shift; it’s a technical exercise. It involves:

• Super rules

• Tax structures

• Investment selection

• Debt strategy

• Timing things properly

That’s why at PlanWise, we work closely with financial advisers to build and implement these FI strategies especially the tricky “bridge” portfolios that sit outside super. By getting the structure right from the start, advisers can keep their clients on the fastest, most tax-efficient path to a truly work-optional life. life.