Your friend recently got a pay raise and plans on putting more money into his savings account. You know that he does not have any investments and advise him to open a 401k instead. He doesn't understand why he should do so. What do you tell him?

Financial independence is when a person is able to live off their life without worrying about paychecks to paychecks and when their stable income is more than their salary. Then a person does not need to rely on their job completely to meet expenses.

This means, that the investment a person has made can pay off and support their lifestyle even if they do not have a salary.

This is why it is important to start saving as soon as one starts to earn so as to work towards financial freedom.

Martebi Martebi · Answer 2 · 2022-01-07T12:26:00+01:00

There are different kinds of savings. I will tell him that a 401k is a retirement savings and investing plan that gives employees a tax break on any amount of money they contribute and that Saving money that is geared towards financial independence is imperative.

The best plan for one to do is to make sure one put aside money in savings. This can be savings as a part of one's regular monthly budget.

Financial independence is important for any body so that one should not be worried over unforeseen issues or paychecks to paychecks issues. The act of investment for a person is known to be able to help pay off and support ones lifestyle.

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