Achieving financial independence is possible through a combination of frugality, smart investing, and strategic planning. By cutting expenses and investing in low-cost index funds, individuals can build a solid investment portfolio that allows them to retire early and enjoy financial freedom.

One effective approach to achieving financial independence is adopting a Scarcity Mind-set, which involves being mindful of spending and focusing on saving money. This mindset can help individuals identify areas where they can cut expenses and increase their savings rate. For example, by reducing spending on non-essential items, individuals can allocate more funds towards their investment portfolio.

Investing in low-cost index funds is another key component of achieving financial independence. By following Modern Portfolio Theory, individuals can design and maintain a well-diversified investment portfolio that balances risk and return. This involves selecting an appropriate equity allocation, choosing which indexes to track, and picking investment funds that track those indexes. As investments fluctuate in value, individuals can rebalance their portfolio to maintain their target allocation.

The Pay-over-Tuition (POT) score is a useful metric for evaluating the financial impact of pursuing a passion project or side hustle. By calculating the POT score, individuals can determine how much additional income they need to generate in order to achieve financial independence. This can help guide decisions about pursuing passion projects or side hustles that align with their financial goals.

Geographic arbitrage is another strategy for accelerating the path to financial independence. By relocating to a lower-cost area, individuals can significantly reduce their living expenses and increase their savings rate. This can help them reach their financial independence target more quickly and enjoy the benefits of early retirement.

In summary, achieving financial independence requires a combination of frugality, smart investing, and strategic planning. By adopting a Scarcity Mind-set, investing in low-cost index funds, calculating the POT score, and considering geographic arbitrage, individuals can build a solid investment portfolio that allows them to retire early and enjoy financial freedom.