The Basics of Financial Independence

This list is actually in order starting with the most important item first:

1. Set aside 6-12 months of expenses in a savings account as a rainy day fund.
2. Pay off any debts you have. Start with the highest interest debts and work down until all is paid off.
3. Maximize your savings rate. I recommend starting with spending less since there you have the most control but finding ways (side gigs, promotions, etc) to earn more is just as important. Another angle on this is getting the most out of your employer via pension/401K contributions, tuition reimbursements for education/training that will improve your earning potential, corporate discounts on existing bills (cellphone plans, childcare, etc).
4. Invest in a low-cost (as low as humanly possible, aim for < 0.20%), tax-efficient (bonds in tax advantaged accounts such as IRAs/HSAs/401Ks), diversified (Total Bond, Total US, Total Int'l OR a Target Date fund to save all the stress), balanced (for your time horizon, 80-20 is a great starting point) index portfolio.
5. Time...let it marinate. The sooner you get done with #1 (you can weather storms), #2 (you are debt free), #3 (you have grown your earnings AND/OR lowered your expenses so you are investing more), and #4 (your investments are growing with very little headwinds from fees and taxes) the quicker you can be financially independent.

And the above list is such that if you just get the first 1, or first 2, or first 3 done, you are better off for it. Don't look at it as a all or none to prevent you from starting. Best of luck.

Full disclosure

I'm being objective when I say that I think I am probably the most objective person you have ever met. You feel me? :) And to prove my objectivity to you I will list my corporate biases:

1. American Express
Love the company but I love the Chairman/CEO even more. My favorite & most used credit cards have all been American Express. For example, in 2007 my card of choice was the JetBlue Amex of which I was able to get 2 roundtrip tickets in less than 12 mos. And now in 2008, my card of choice is the SimplyCash Amex (5% on gas, cell phone & office supplies; 1% on everything else) of which so far I have already pulled roughly $150 in cash back. As for the CEO/Chairman, Ken Chenault, I can't say enough about dude. Closest thing I have to a role model alive. I have been following his career since around 1998 and dude shines brighter each passing year. What more can I say?

2. ExxonMobil
Love the company, love management, love the gas. I know folks are reading this and wondering why would I love an oil company. Well look, I started drinking their Kool-Aid back in like 1999 when they were just Exxon and everybody was talking technology companies solely. Back then they would send me their newsletters outlining their plans to cut costs, increase dividends and increase shareholder value like every company would. But what they did different from the rest was they would provide timeframes and report back on those stated goals. Trust me, sounds simple but so few do it. They reported on successes and failures. And more often than not they would exceed their goals by huge amounts. When they said they would buy Mobil and cut X billions in costs in Y years I strongly doubted them. Hell, they came back announcing they had cut X+1 billions in Y-1 years. And right around then was when shite started popping off for the oil industry and they were primed to capitalize. Gotta give them their props. Also, as part of their industry leading technology I have had SpeedPass too long to even remember when I first got it...probably 2000-2001 or so.

3. Pfizer
I would like to believe they are my best long term play as an investment and as the guys who may find a cure to what ails us. But honestly, they have been letting me down over the last two years or so. I guess I have been drinking their Kool-Aid for so long that it is hard for me to admit that maybe the good times are gone. I mean, a company this stocked with talent and genius can't be held down for too long?? I think right now the company is moving sideways but I still see them rising to the occasion like they are so famed for doing in the past. Maybe I just don't know how to let go but I have to go with my gut on these guys.

4. AT&T
Me and Ma Bell go way back. This was my dream company to work for as a kid. You know, one of the reasons I studied Electrical Engineering in the first place was to one day be a Bell Labs Engineer (which later became Lucent which later became Alcatel). But that never happened and even though AT&T today isn't the AT&T I dreamed of as a kid the bias still lives. I guess it will all make sense when I get my 3G iPhone. Hey, what can I say? Biases die hard. :)

5. ING Direct
Large up savers anywhere dem deh! Via ING Direct Orange Checking and Savings I earn more interest a month than I earned in my prior 8 years with Bank Of America cumulative. Then lo and behold, ING went out and copped ShareBuilder, whom I have been using as my primary brokerage for the last 4 years, which further cemented my relationship with ING. I remain at this juncture however, totally ignorant of the company as an investment but you can rest assured I don't plan on finishing out 2008 that way.

6. Vanguard
Love em, trust em, and most of all I respect them. Transferred my Roth IRA over to them roughly a year ago from Ameriprise. Lets just say, the whole process was a breeze, free, and did I mention they are FREE? I mean, I was paying Ameriprise like $40/year in custodial fees and all the fund choices they gave me were like 2x the expense fees of the Vanguard fund choices. Talk about a no-brainer. So now I pay ZERO in custodial fees and 0.50% in total weighted fund expense fees.

Summary:
Realizing your biases can be very helpful. Trust me, it took some time for me to realize that I was quick to listen to someone calling from Amex (which is how I got suckered into Ameriprise in the first place) but quick to hang up the phone on a MasterCard rep even when the latter was the better deal. Brand names go a long way in influencing judgment. Being cognizant of this can be very helpful against the marketing machines we all face each and every day.

Tax return choices...

If you are one of the lucky few out there who will be blessed with a big tax refund and would like to know what are some of the best options during a recession like economy then here are some top choices:

1. Shore up your short term reserves
Normally, this would be #2 but in an economy like the current one, having some reserves is a pretty good idea. How much you say? Personally, 3 months salary works for me but many experts recommend 6 months. My personal favorite for this would be ING Checking where you can get a free $25 just for opening and funding an account with a minimum of $250. That's an instant 10% by my calculations not to mention the 2% APY on a CHECKING account.

2. Pay off any high interest (>3%) debt
Assuming you have short term reserves, paying off high interest debt is always the BEST thing to do. I mean, it doesn't take much sense to see that if you are earning 5% (before taxes) on your investments but paying 8% in interest that you are losing the fight. A beatdown to be exact.

3. Continue to fund your retirement
More specifically, continue to fund your (401K, Roth IRA, Roth-401K, IRA, etc) accounts. As always, if your employer matches your 401K contributions you should contribute the minimum to get the maximum employer match. Free money is free money. With regards to fund selections it is always recommended to find low cost broad index funds and I continue to receive the best service with a wide array of low cost choices from Vanguard.

4. Adjust your withholdings
Yep, if you don't want a repeat of getting your own money back next year interest free you may want to adjust your witholding. Ideally, you want to shoot for break-even ($0 refund/owed). In the situation where I must lean one way I prefer to owe the IRS a SMALL amount than having them owe me. Hey, last I checked they don't pay interest.