I felt lost, lacking focus in my writing. Ideas on emergency funds, investing, budgeting, minimalism, and so much more jostled in my head. So I wrote… a paragraph on emergency funds… a paragraph on saving… a paragraph on investing. Never completing a full entry. I agonized over every little detail. Wanting it to be perfect for me, and for you. But perfection held me back.
And then I listened to a podcast where Suze Orman, one of the most renowned figures in personal finance, expressed how much she hated the financial independence retire early (or FIRE) movement. She painted a bleak outlook on my potential future life (you can check out her interview on Afford Anything’s podcast 153). Work until I’m 70. Look over my shoulder for any and all catastrophic events. Accumulate $5 million in my retirement account as a baseline, which even then might not be enough (insert the wide-eyed emoji if I could).
Is this really life? Is this what it is supposed to be? How could anyone on a livable wage or even the average US salary ever retire if $5mil was the requirement? I would have to save $30K a year for 35 years and hope that it returns the stock market returns of 8% a year to accumulate $5mil, and even then it might not be enough?
I refuse. Sorry Suze. I cannot follow that traditional path. It reiterated how important financial independence is to me, and that others need to hear about it too. So it is time to stop dallying and begin…
These future posts will be the blueprint. Adapt them to your needs and your family and your situation. After reading a post, you might say “I can’t do that!” or “My partner won’t agree.” or “I will never have enough money to do that.” They are all reasonable things, but also know that those deterrents might lengthen the time it takes you to achieve financial independence.
It requires sacrifices and tradeoffs and learning and transparency. It takes going to your partner, your children, and your friends and asking them to support you in this endeavor.
A year and a half ago I had to do that very thing with my girlfriend by explaining to her my financial situation… almost $30K in debt (you can read about my story to get out of debt here). It stressed me out thinking about it and made me nervous to tell her, but I needed her support and understanding. That transparency made us closer, and eliminated the stigma of discussing finances in our relationship. A great thing since they lead to a large portion of partner/family conflicts.
Those tough conversations with the people around us will pay off in the long run. Financial independence will pay off in the long run. But you have to be open about your situation and goals, not only with yourself but also with those around you.
Financial independence is the idea that your money and investments are making enough passive income on their own that it covers all of your yearly expenses, and eliminates the requirement to have a job. So if your investments increase by $40K in a year (meaning your money built wealth for you without any extra work from you) and all you need is $40K to live, then you are financially independent. You can retire or you can continue working. The choice is yours. And ultimately, that is the key to financial independence… choice.
The upcoming posts will go through the process of getting to financial independence. I plan to write a post each weekend discussing a key aspect of this process in the preferential order. Once I have covered the basic necessities of the plan, I will add additional posts to highlight potential options that could tweak the plan depending on your preferences. I will also continue to research and learn, posting those new discoveries here.
The basic necessities include:
- Setting your financial independence goals
- Staying healthy and fit (might make this a separate weekly post because of the level of importance)
- Understanding and tracking your expenses
- Identifying ways to increase revenue
- Discussing the importance of minimalism
- Paying off high interest debt
- Learning key financial and retirement ideas
- Understanding taxes and education expenses
- Maintaining a standard of living
- Keeping high levels of happiness and making smart tradeoffs
- Protecting you and your family
- Having patience
I will stop agonizing over my posts’ perfection and share this blueprint with you so the Suze Orman’s of the world do not keep you from obtaining financial independence, semi-retirement, mini-retirement, or even early retirement… if you choose. Again, it is the choice that matters.
Up first, setting your financial independence goals. See you next week!