It takes a lot of work to reach financial independence.

Only a small segment of households will reach traditional retirement comfortably. Even fewer will be able to claim true financial freedom before reaching their 60s.

Many habits, skills, and characteristics come into play when someone becomes motivated enough to reach for financial independence early — things like discipline, sacrifice, planning, and ordinary old math skills.

There is, however, one skill that stands out above all, mainly due to its widespread use, and recurring application.

The skill I'm referring to is the ability to Negotiate effectively.

Why is Negotiating Important

People have been negotiating for as long as they've been able to communicate. It's a life skill that's crucial to succeeding in both business and in your personal life. Concerning financial independence, it's simply indispensable.

At its core, financial independence is all about earning money and saving it. What you do with those savings can alter the timeline, so investing the money wisely plays a critical role as well.

At every step of the process, whether it's earning, saving or investing, negotiation skills come into play. In fact, most of the time, you may not even be conscious of the fact you're doing it!


Any time you have an exchange with someone, the odds are high you're negotiating. Here are some examples of what I mean…

Examples of how Negotiating leads to Financial Independence

Salary – The most obvious area to flex your negotiating skills is salary and income. Half of the job candidates don't even bother trying to negotiate their offer. This leaves tons of money on the table throughout an individual's career.

Bills – There are many bills you can negotiate lower. A great example is your cable bill. Another example is your electricity rate. The key is to take a proactive approach with your bills and find ways to cut them down.

Loans – Whether it's your mortgage payments, student loan payments, or credit card payments, there are plenty of opportunities to lower your exposure. Many companies are willing to work with you; you need to ask and persist.

Travel – Negotiating opportunities abound during travel. It could simply be the cab fare, a souvenir, or even a special experience. Other cultures are used to negotiating, and you need to get out of your comfort zone.

Repairs – It's rare for me to not ask for a discount when it comes to repairs. This could be home repairs, car repairs, or anything else of a similar nature. Over the years, this has put quite a bit of money in my pocket. This was especially true during the time we remodeled our house.

Practically All Things – Just about everything you can buy is negotiable. Anytime you settle for the list price, also known as the first offer, you're leaving money in someone else's pocket.

Time – How you spend your time is absolutely negotiable. Whether it's work responsibilities, family responsibilities, or other demands on your time, negotiating back your time is key to uncovering opportunities.

Improve your Negotiating Skills

I still remember the first course I took on negotiating. This was early in my career, and my company sponsored a course designed by one of the fathers of negotiating Dr. Chester Karrass. I thoroughly enjoyed it, and have read many books since.

Here's a classic that everyone should read by Dr. Chester Karrass himself. The Negotiating Game.

negotiating game

If you happen to have the opportunity to take one of the Karrass negotiation seminars, I would recommend it. They use many practice exercises between participants that are useful in helping apply the principles.

I took other courses on negotiating during my MBA and had a lot of fun with them.

If you've never taken a formal course on this subject, or read a book, you should do it immediately. It could buy you a few more freedom years.

Readers, do you agree that the ability to negotiate is critical in reaching financial independence? Have you ever taken a formal course on negotiating or read a book on the subject? Share your thoughts and comments!