So you just graduated. Ready to retire yet?

It sounds funny, but financial independence is a legitimate goal for many — no matter their age. Movements like FIRE — financial independence, retire early — have people aged 30 and younger thinking about retirement sooner rather than later. And even those with a long-term view understand that a 401(k) is a good idea.

The only question is how to achieve financial independence. Let’s look at some of the most common approaches first.

Strategies for achieving financial independence

  • Financial independence, retire early: The FIRE movement advocates saving most of your money, often more than 50% of your take-home pay. The idea is that as long as you have enough net worth to generate a 4% annual return that pays for your expenses, you’re financially independent. To achieve these stunning savings rates, many FIRE proponents will endure short-term sacrifices — such as taking on roommates — to make the math work in their favor.
  • The long-term approach: Most conventional advice recommends a more moderate approach, such as putting 10% to 15% of your take-home pay toward retirement. If you’re in no rush to retire early or achieve financial independence, a lifetime of working — some 40 years or so — will yield a large retirement nest egg.
  • The front-loaded approach: Financial independence is, at its core, an issue of mathematics. If you can make large initial investments in your 20s, the long-term accumulation of compound interest can get you closer to financial independence even if you set aside minimal savings in your 40s and 50s.
  • The cash flow approach: Because financial independence is just a math problem, some people approach it in simple terms: If you have assets generating enough money to cover your expenses now, then you are instantly financially independent. To do this, some people create low-maintenance cash-flow businesses, such as owning real estate.

How to take the first steps toward financial independence

Even with the possibility of financial independence ahead of you, there are challenges, too. Consider that as many as 45% of Americans have no retirement savings at all.

  • Pay off debt as soon as possible. A study at the University of Rhode Island cited debt as one of the primary factors influencing a young person’s ability to achieve financial independence. If you have debt, aim to pay it off soon and head toward financial independence.
  • Automate your investing. Once you get a job, take advantage of any 401(k) matching plans, or set up your bank account to automatically deposit money in a Roth IRA every month. Even if you start with small amounts, the act of automating investments is a great way to get started. Contact either your bank or your IRA provider to find out how to automate in unusual situations, such as if you have a job with an irregular income.
  • Lower your cost of living. Manipulating your cost of living is one of the hallmarks of the FIRE movement. Some people switch from dining out regularly to learning how to cook from whole, bulk ingredients. Others abandon their expensive cellphone plans in favor of bottom-dollar options. Some even relocate to areas with lower costs of living, especially in South America and Asia.
  • Invest in your career. You don’t have to live like most FIRE enthusiasts to achieve financial independence, especially if you earn enough to invest. But investing in your career is also important. Learn how to network, write a strong resume and appeal to recruiters. These skills will help you earn more income in the long run.
  • Don’t time the market. In 2013, Charles Schwab conducted a study showing that investing constantly — say, every month — was nearly as good as having perfect market timing. Don’t hold back your investment funds because you think you know where the market is going next. Get the money working for you as soon as possible.

The goal for most people is to achieve financial independence at some stage. Without that, retirement isn’t possible. Some are able to do it faster than others.

The most important part? Get started early. Once you realize that your very first foray into the working world is also your first step toward financial independence, you’ll see the importance of investing in yourself, setting aside enough money and automating your investments.