Financial independence begins when people use their money to build investments that can sustain their desired lifestyle without relying entirely on a salary, Managing Director of EDC Investments Limited, Paul Mante, has said.

Speaking on the Konnected Minds podcast, Mante explained that earning a good salary or obtaining a high level of education does not automatically translate into sound financial management.

He said people must learn to plan their finances, save consistently and invest to generate income beyond their regular employment.

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“When I talk about financial independence, I’m talking about getting to that stage in life where, with or without salary, you can sustain your desired lifestyle,” he explained.

According to him, the traditional expectation of completing school, securing a good job and working until retirement must be accompanied by a better understanding of how money works.

He stressed that financial knowledge is essential for people across all professions, regardless of their qualifications or income levels.

“You may be an engineer, you may be a pilot, you may be a pastor, you may be a doctor,” he said, emphasising the need for everyone to understand money management.

Mante described saving as the starting point of financial independence but cautioned that keeping money aside without investing it may not preserve its purchasing power over time.

Using GH¢20,000 as an example, he explained that money kept without earning returns could remain GH¢20,000 after 10 years but buy fewer goods and services because of rising prices.

“Savings is the beginning. But beyond savings, you want to invest. The money must work for you to generate returns,” he said.

How investments can support your lifestyle

To illustrate the concept, Mante cited the example of a person who requires GH¢10,000 a month, or GH¢120,000 annually, to maintain their desired lifestyle.

He explained that an investment of GH¢1 million earning an annual return of 18% would generate GH¢180,000 a year, equivalent to GH¢15,000 a month, before taxes and fees.

Such returns, if achieved consistently, could provide enough income to cover the person's estimated monthly expenses and create some financial flexibility.

He noted, however, that financial independence is about more than accumulating money. It also gives people greater freedom to decide how to spend their time and what work to pursue.

For Mante, achieving this goal requires a shift in mindset from spending available income to building assets that can generate future returns.

“The journey towards financial independence begins the day you stop asking, ‘What can I buy?’ and start asking, ‘What can I build?’” he said.

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He added that coming from a wealthy family is not a requirement for building wealth, highlighting financial literacy as an important foundation for long-term financial security.

“Whenever money comes into your hands, there are two destinations. It will either disappear through consumption, or it becomes a seed that you plant for the future,” he said.

DR/MA

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