Category Archives: Financial Independence

I want to let you in on a dirty little secret about prepping: it aint cheap!

Once you get through your Oh, crap! moment, youre going to do the same thing I did. Youll realize that theres a whole lot of action you need to take and a fair amount of things you need to acquire. A lot of these actions and acquisitions require money money you might not have right now. So, what are you going to do to get started?

Go into debt?

Buy it on credit cards?

WRONG!

Youre going to do the first thing I did sit down and make a plan to get out of debt. If you do nothing else described in this series, youll benefit immensely just by getting out of debt and creating financial independence for your family. Not being handcuffed by the credit card companies and banks will make you breath easier and sleep sounder.

Your first thought might be why should I get my checkbook in shape before I stock up on beans, bullets or band-aids? The answer is simple: without a solid financial backing, you cant buy anything. Putting yourself into debt just to be prepared is detrimental to your cause. You can have all the food store, medical supplies and firearms you can handle, but youll be up a creek without a paddle if spend all your money on preps and cant afford to pay your mortgage or rent.

The first thing I recommend doing to start getting your finances in order is nothing.

Sound counter-intuitive? It is.

Youre not going to change your spending habits, youre not going to change your income, youre not going to change your monthly bills. Youre simply going to track your incomes and expenses for the next three months. Tracking this information lets you find out where your money is coming from and where its going.

There are a ton of different ways to track your money.

Some people like the old school method of pencil and paper. And that process works just fine. Write down dates and transactions incomes and outcomes. At the end of the month, add them up.

Other people, myself included, prefer a slightly more technologically advanced approach.There are many software applications (both freeware and paid) that allow you to track your expenses. We have been using the freeware software Microsoft Money Plus. Yes, its Microsoft, but it does a great job of providing a clean interface that allow us to easily track my money. In addition, it allows us to run monthly reports. Plus its free thats a bonus for this endeavor! You can find it, along with a handful of other free finance tracking software suites, on this site.

Now you need to take an honest look at the results of your financial tracking.Im going to warn you right now this next step isnt going to be comfortable.

We spent three months tracking my financial transactions every paycheck, Dunkin Donut stop and fill up at the gas station. After three months, we was able to generate three monthly reports and get a pretty good snapshot of how we spend our money.

At this point, we could see where we needed to tighten the belt a little. One of our big findings was that we were eating out ALOT! Those $5 breakfasts, lunch runs and were too tired to cook dinners were catching up to us. We had a couple of other areas we were unknowingly spending a lot of money.

The next step is to tighten up in your overspending areas. This step will be uncomfortable. Not going out to eat as much as we used to sucked. For instance, I personally felt like I was losing a social aspect of work. Likewise, we felt we worked hard during the week and deserved to go out to a nice dinner on the weekends. But you know what else we found out? We found out we were able to save some money in just a few months. After tightening the belt a bit for a few months, we were starting to see our income trump our expenses for the month (youre still tracking your finances, right?).

We made a list of our debts credit cards, loans, mortgages, etc. And we also stumbled upon Dave Ramseys Debt Snowball. Spend some time reading up about this approach on your own, but the premise is this:

Pay off the smallest debt first by adding additional monthly payments while still paying your regular monthly payments to all your bills. Then you take the money you were paying monthly on the first bill and tack it onto the payments for the next smallest bill. Once that loan is paid off, you take the money you were paying on the first two loans and attack the third smallest loan with that extra monthly money. And so on, and so on. Essentially youre paying the same amount every month, but your debt starts to disappear.

Download the Debt Snowball spreadsheet from Vertex42.com

Were in the middle of this process approaching some of our bigger loans and can honestly say it works. Dave Ramsey has a pretty good approach to financial security give him a chance.

So youve paid off everything with exception of maybe your mortgage. What do you do now? First give yourself a giant slap on the back. Youve done something that most folks dont think is possible. Youve used what you have to get out of debt. You can breath easy. You can sleep sound at night. Next make yourself a promise. Promise yourself that this will NEVER HAPPEN AGAIN! Make smart decisions, dont finance your wants and live debt free. Now you can prep with an open mind.

Youre probably asking do I need to take care of my finances before I do any prepping?

The answer is YESand NO.

First, remember that building up your financial security is a big part of prepping, so dont overlook it. Second, realize that you can do small things on a daily, weekly and monthly basis to build up your preps. Well get into different ideas when we talk about water and food storage. Also, if you can find ways to augment your income, you can justify making a prepping fund where you can save money and put it towards prepping. This approach doesnt strictly follow Dave Ramsays advice, but I have found that allowing yourself an occasional reward does help you keep on the straight. At least for me, sometimes I need something more than seeing the monthly statements disintegrating before my eyes. Just be sure that your occasional treats dont overtake your debt reduction process.

I hope you enjoyed this first article on Prepping 101. I am happy to answer any questions in the comments section here or on Facebook. If you dont want to make your question public, you can always email me at dan AT suburbansteader.com. Keep an eye out for our next Prepping 101 article on identifying what youre doing thats working against self-sufficiency.

photo credit: psyberartist via photopin cc

A beginners guide to the prepping mindset

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Prepping 101: Financial Independence | Suburban Steader

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Welcome - Reach Financial Independence

Work seems to have gotten a bad rap in PF blogs, as many are primarily focused on financial independence and early retirement. Is work really that bad? Has everyone caught the early retirement bug, or just a select few that have loud online voices?

To shed some light on this controversial topic,we decidedtointerview some excellent bloggers and ask them their views on financial independence, work, and everything in between.

We got a diverse set ofresponses,which makes for a great read.

So check out what all 19 had to say about financial independence and share your viewsin the comments below.

Jacob from theCash Cow Couple:

1. What does financial independence mean to you and how are you pursuing it?

Financial independence (FI) is achieved when your passive income streams cover allyour living expenses. Most people include pensions, Social Security, portfolio income (stocks, bonds, etc), and things like rental income from real estate in the passive category.

Its more aboutfreedom than money. Ultimately, its freedom from the 9-5 constraints that plague most Americans.

Were only halfheartedly pursuing FI right now. Neither of us are making as much money as possible, but we do have a high savings rate. Our savings rate will almost always be above 75% for the foreseeable future.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

Even though I created this question, I dont know the answer because its not possible to simultaneouslyexperience both options. Ive definitely chosen the latter in my current situation and I think its a more desirable path (assuming its actually possible to find a career that you love).

Im currently in the middle of my PhD in financial planning/finance, getting paid much less than I could make elsewhere. But its a long term play. I should make a decent income when I graduate, and Ill always have numerous employment options because Im building human capital right now.

I was speaking to one of my professors a few days ago about this very subject. Hes a highly coveted speaker, writer, and consultant who makes good money outside of his academic position. He could leave academia at any time and find higher paid positions in industry, but is not interested in doing so. He told me that another pay increase is irrelevant. He already makes good money and can afford anything that interests him. When I asked about financial independence or early retirement, he chuckled and said something like this

I love what I do, and Id do the same things even if retired. Why would I give upmy currentincome to continue reading,writing, and speaking from home?

For individuals like him (and hopefully me), financial independence almost becomes irrelevant.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

The common rule of thumb that youll hear repeated is the 4% rule. This rule is based on academic research from several years back which suggested that a portfolio could sustain a 4% withdrawal rate for 30 years time, without being depleted. So a $1 million portfolio could provide $40,000 of income each year (adjusted for inflation),for30 years, without being completely depleted.

There are a couple of problems with this, but Ill try to keep it brief. First of all, most of the people talking about the 4% rule on the internet are attempting to retire in their 30s or 40s. If someone is retiring at age 40, they should plan on their portfolio lasting 50+ years. The original research on the 4% rule was based on a 30 year retirement horizon. The portfolio would have been depleted many times with a 50+ year horizon, and the person would be forced back into work.

The second problem is the fact that many experts dont expect equity (stock) returns to continue being close to 10% each year. Some think the equity premium is lowering, and that the stock market is overpriced with respect to company earnings. The result would either be a large correction (less likely, I think) or a period of lower returns moving forward (more likely).

If both of these facts are true (and they might not be),4% is too optimisticwhen designing an early retirement portfolio. Id feel much safer around a 3% withdrawal rate. The result is a rather large increase in required principle. Instead of $1 million, you now need roughly $1.33 million to support that same $40,000 of income.

(the math is easy, just multiply yearly expense by 25 to get required savings for 4%, or multiply by 33.33 to get required savings for a 3% withdrawal rate)

But herein also lies the beauty of frugality. If you can manage tolive on roughly $10,000 as year like us, you only need $333,000 to call yourself financially independent.Even annual expenses of $20k per year only require $665,000.

Of course, living on $10k is shocking to some people, but I think somewhere between $10k and $20k is entirely doable in a low cost of living area, without a mortgage payment. Therefore at the current time, Id consider us financially independent when we are mortgage free, and our investments reach $500,000.

4. What will you do after you are financially independent and free from the constraints of a job?

The same things that I do now, which is why Id rather choose to work a fulfilling career over many years. I enjoy reading, writing, teaching, hanging out with my wife and family, and traveling. I also like being productive, and believe that some form of work is a very healthy thing.

If I do decide to retire from my first career, Id like to sell used cars. I love buying and reselling in general, but used cars can have great margins and they are always in demand.

5. Any other relevant thoughts or advice on the topic?

Understand financial independence before pursuing it. I think many people get caught up in the sexy story of FI, but they dont actually think it through. Sure, having a high savings rate is always recommended. Thats a good part of this blog. But socking away money is completely different than choosing a career based on earning potential alone, or waking up one day and deciding that its time to quit your job simply because you have enough assets to cover your living expenses.

Those are major life decisions, and in complete honesty, I dont think its healthy for some people to stop working. They dont have sufficient hobbies to fill the time and are left void of purpose. This is the dark side of financial independence and the reason that people should do a little soul searching before they make these huge decisions.

There isnt any one size fits all approach to reaching financial independence, but there is a superior path. Figure out what brings you satisfaction and joy in life, then try to design a lifestyle around that. Work doesnt have to be soul crushing. If your current position makes you miserable, save enough to take a year or two off, so that you can find a way to make money doing what you enjoy. Its not all rainbows and butterflies, but I think its possible to find meaningful work and still achieve financial independence along the way.

James fromRetirement Savvy

1. What does financial independence mean to you and how are you pursuing it?

I equatewealthywith financial independence; and I define wealthy as being able to live your chosen lifestyle on passive (e.g. income from defined benefit plans , Social Security benefits, rental property, etc.) income and portfolio income (e.g. defined contribution plans such as 401(k)s, IRAs, etc.) and do not require earned (labor) income. Therefore, I am wealthy when I am financially independent.

Currently, the savings/investment rate in my household on an income of $190,000 is 39%.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

I dont know that it is necessarily a case of choosing one or the other. At least that has not been my experience. My experience is that most people end up in a profession or on a career path through circumstances, some factors within their control, others not.

My suggestion to younger people, Im 47, is to learn and/or receive formal education in two disciplines (my undergraduate degree is a dual major in business administration and communications technology and I also possess an MBA) and pursue a career that you believe you will enjoy. However, recognize that life has a way of throwing many curveballs, hence the suggestion for multiple disciplines. Dont spend too many years chasing a dream job or career. It probably is not as great as you think it will be and you have to be careful not to waste too much time in the pursuit.

Most of us will end up in jobs that we are good at, or at least capable of performing moderately well, and will find sufficient pleasure in that job. I believe most people will be much better served by just going with the flow with respect to which career path they end up on and spend much more energy in cultivating rewarding relationships and attaining personal finance literacy. They both will pay significantly better dividends than a career that you love.

I believe it is a lot better to be sufficiently satisfied with your career and have significant, deep-rooted relationships and financial independence. That way, when you do walk away from the career which will happen at some point, either through choice or circumstances you are in a position to enjoy the relationships and the comfort that comes with being wealthy.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

A quick example, discounting inflation for the moment. Assume a family decides that they want to retire in 20 years and have an annual income of $120,000. Assume, that like me, one spouse is retired from the military and is currently receiving a $20,000/yr. pension; which they project will be $25,000/yr. (COLA increases) in 20 years. Further assume the following factors: neither has a job with a defined benefit plan (traditional pension) and they project that their Social Security benefits will equal $35,000. That gives them a projected income of $60,000 from passive sources.

That leaves them with $60,000 they will need from portfolio income. How large does their portfolio need to be to support withdrawing $60,000 a year and not run out for ~ 30 years? We turn to the 4% rule. That 60,000 x 25 (or 60,000 / .04) gives us an answer of $1,500,000.

Assume they currently have $50,000 in various retirement accounts. The question then becomes, how much do they need to save on a monthly basis (most of us operate financially on a monthly basis) to reach their goal?

Current Principal $50,000

Years Until Retirement 20

Annual Rate of Return Lets assume they are assuming 5%

Annual Contributions $39,390

Result = $1,500,256.21

This family would need to contribute $3,282.50 (39,390 / 12) monthly to reach their goal. Of course, if they change any of the factors, everything changes. Running ahead of pace? Contribute less. Get much better rate of return for a few years? You can lessen the requirement going forward.

4. What will you do after you are financially independent and free from the constraints of a job?

Travel, golf, travel, lift weights, travel, ride bike, travel, hike, volunteer.

Kali fromCommon Sense Millennial

1. What does financial independence mean to you and how are you pursuing it?

To me, financial independence means the ability to live off your investments and assets without being required to draw a paycheck. Ill be financially independent the day I can withdraw enough from my investments to cover my expenses in such a way that I wont outlive that nest egg Im pulling from.

Im saving everything I can, but Im not strongly motivated by the idea of financial independence or at least, Im not in a rush to get there. Ilikeearning an income. I like working, being productive, and having a career.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

Id choose working a career I loved for many years all day, every day. I thrive off challenging myself and feeling useful and productive. If I found ten million dollars tomorrow, I wouldnt just stop working. Sure, maybe the nature of the work would change because I wouldnt berequiredto earn X amount every month, but I would still work.I love what I do.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I dont know. Again, Im not that worried about reaching financial independence by a certain age. Im in wealth-building mode and will be for the next ten years or so (Im 24). My plan is to save all I can now and start crunching numbers later.

I think this approach works for us because we dont think, okay, we need X amount to have this big of a net worth by this age. Instead, its more like, what we make expenses small amount for discretionary spending = what goes into investments every month. And were always working to increase income so that leftover number is bigger.. which means what we put away is greater.

4. What will you do after you are financially independent and free from the constraints of a job?

Travel more. Experiment with different businesses or income streams. Id love to have the financial freedom to raise, sell, and train horses (its a financially risky venture, which is why I dont do it now). Find our forever home, which for us would be a piece of property somewhere out in the middle of no where that we can run as a small farm. (Yup, Laurie from The Frugal Farmer inspires me!)

5. Any other relevant thoughts or advice on the topic?

Dont make it complicated. If youre living below your means, youre doing a good job and youre on the right track to success.

Similarly, dont beat yourself up for not getting to financial independence in 10 years or less. No matter what Mr. Money Mustache says, the fact is he and his wife made solid six figures and lived off about $30,000 for 7 years to hit financial independence. Thats not an average income so it wont be an average timeframe to FI.

If you and your spouse are making $80,000 stillverygood money and much more than lots of people its not necessarily realistic to think youll be able to put away $70,000 or more for year after year after year for 7 years in the same way.

Thats not said to bash MMM I think his site is a valuable resource but itisto say, dont let anyone elses bravado bum you out and make you feel like youre not good enough or cant make your financial dreams into realities. Be patient with yourself! Start where you are, do what you can with what you have, always work to improve, and you will find your financial success.

1.What does financial independence mean to you and how are you pursuing it?

Financial independence is a tricky one for me. I believe this concept is a consequence of cuts to welfare and powerful economic troubles of the last three decades. People are being forced to take more responsibility for their wealth for better and for worse. Im not pursuing financial independence; rather, financial comfort. As I pay off increasing amounts debt, my only concern is feeling free from debt.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

This is a great question. I would say Im pursuing the latter. If you are looking to reach rapid financial independence, that sets you up with a select number of jobs. Youre looking at finance, oil, or some sort of massive industrial complex. None of these avenues inspire me right now. As such, Im pursuing an advanced degree in psychology and making next to nothing doing it. I wouldnt have it any other way.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I guess my question would be: Why would you stop working if you love what you do? No wealth level could make me stop Now, if I wasnt pursuing this career path, Id like need to see a number in the tens of millions to stop working and consider myself financially independent. That amount would cover moves, housing, transportation, children, and college educations for my kids.

4. What will you do after you are financially independent and free from the constraints of a job?

Again, thats not necessarily my first goal. Im interested in being free from debt. After Im done with that goal, Ill continue to save and work. My dream is not to be without work just without financial insecurity.

1. What does financial independence mean to you and how are you pursuing it?

The termindependentmeans to be free from outside control; not depending on anothers authority. In that regard, a person cant be financially independent until they are completely free from the constraints of debt. Until all consumer debt, school loans, the mortgage and any other debts are retired a person is not technically independent, even if they have vast wealth. They are still beholden to another party and have obligations that require their money go in a certain direction.

Once those obligations are gone, the individual has total freedom to use their money in any way they desire. That is what my wife and I have found now that we have eliminated all our debts. Financial independence means the freedom to pursue anything you desire with money that is 100% yours.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

The desire and capacity to work is something built into our nature as humans. There can be pleasure and fulfillment found in our work. For me, no amount of money would be worth the job that I dreaded going to each morning when the alarm clock sounded.

There is something to be said for the process of building money over time. Quick fixes dont satisfy in the long run. The stack of money will taste sweeter and will be appreciated more through the effort of consistent and diligent work that a person loves and feels called to.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I prefer not to use specific dollar amounts. Instead, I see it summed up this way: When the money a person has saved and invested makes more for them in a year than they make for themselves in a year at their job, they are financially independent. (The caveat being of course they have no outstanding debt as I said earlier.)

However, just because a person reaches this point doesnt mean they should automatically stop working. There are other life situations to consider including years to formal retirement age, ones health, lifestyle and future plans.

4. What will you do after you are financially independent and free from the constraints of a job?

My wife and I have really focused and worked hard over the past decade to budget properly, eliminate our debt and grow our investments. Part of that effort included my wife transitioning careers from high school math teacher to CPA. For her that dream career presented an opportunity to earn more and speed up the possibility of becoming financially independent.

The result of all these efforts is that, after 17 years of teaching high school students myself, Ive been able to transition to stay at home dad and personal finance blogger. Because we have reached a level of financial independence, it allowed me, and us, to invest more time in the lives of our four kids.

5. Any other relevant thoughts or advice on the topic?

Only that financial independence isnt the end-all to life. All the money in the world wont cure the emotional or spiritual hurts present in our lives. Nor will it bring true happiness and contentment. Only God can meet those needs in a persons life.

Dee fromColor Me Frugal

1. What does financial independence mean to you and how are you pursuing it?

To us, financial independence means being able to choose when and how we work. Wed like to develop enough passive income streams so that wed have the freedom to choose to quit our relatively well-paying but stressful jobs and pursue a less stressed out life. We are aggressively saving and working hard to pay off our debt to achieve this goal. We live on a small percentage of our income. Currently we put about 15% of our post-tax income into savings, but right now a whopping 40% of our income is going toward our debt repayment because we want to be debt-free so badly (darn student loans!) We also heavily contribute to retirement accounts.

Visit link:

21 Experts Chatting About Financial Independence | Cash ...

Work seems to have gotten a bad rap in PF blogs, as many are primarily focused on financial independence and early retirement. Is work really that bad? Has everyone caught the early retirement bug, or just a select few that have loud online voices?

To shed some light on this controversial topic,we decidedtointerview some excellent bloggers and ask them their views on financial independence, work, and everything in between.

We got a diverse set ofresponses,which makes for a great read.

So check out what all 19 had to say about financial independence and share your viewsin the comments below.

Jacob from theCash Cow Couple:

1. What does financial independence mean to you and how are you pursuing it?

Financial independence (FI) is achieved when your passive income streams cover allyour living expenses. Most people include pensions, Social Security, portfolio income (stocks, bonds, etc), and things like rental income from real estate in the passive category.

Its more aboutfreedom than money. Ultimately, its freedom from the 9-5 constraints that plague most Americans.

Were only halfheartedly pursuing FI right now. Neither of us are making as much money as possible, but we do have a high savings rate. Our savings rate will almost always be above 75% for the foreseeable future.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

Even though I created this question, I dont know the answer because its not possible to simultaneouslyexperience both options. Ive definitely chosen the latter in my current situation and I think its a more desirable path (assuming its actually possible to find a career that you love).

Im currently in the middle of my PhD in financial planning/finance, getting paid much less than I could make elsewhere. But its a long term play. I should make a decent income when I graduate, and Ill always have numerous employment options because Im building human capital right now.

I was speaking to one of my professors a few days ago about this very subject. Hes a highly coveted speaker, writer, and consultant who makes good money outside of his academic position. He could leave academia at any time and find higher paid positions in industry, but is not interested in doing so. He told me that another pay increase is irrelevant. He already makes good money and can afford anything that interests him. When I asked about financial independence or early retirement, he chuckled and said something like this

I love what I do, and Id do the same things even if retired. Why would I give upmy currentincome to continue reading,writing, and speaking from home?

For individuals like him (and hopefully me), financial independence almost becomes irrelevant.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

The common rule of thumb that youll hear repeated is the 4% rule. This rule is based on academic research from several years back which suggested that a portfolio could sustain a 4% withdrawal rate for 30 years time, without being depleted. So a $1 million portfolio could provide $40,000 of income each year (adjusted for inflation),for30 years, without being completely depleted.

There are a couple of problems with this, but Ill try to keep it brief. First of all, most of the people talking about the 4% rule on the internet are attempting to retire in their 30s or 40s. If someone is retiring at age 40, they should plan on their portfolio lasting 50+ years. The original research on the 4% rule was based on a 30 year retirement horizon. The portfolio would have been depleted many times with a 50+ year horizon, and the person would be forced back into work.

The second problem is the fact that many experts dont expect equity (stock) returns to continue being close to 10% each year. Some think the equity premium is lowering, and that the stock market is overpriced with respect to company earnings. The result would either be a large correction (less likely, I think) or a period of lower returns moving forward (more likely).

If both of these facts are true (and they might not be),4% is too optimisticwhen designing an early retirement portfolio. Id feel much safer around a 3% withdrawal rate. The result is a rather large increase in required principle. Instead of $1 million, you now need roughly $1.33 million to support that same $40,000 of income.

(the math is easy, just multiply yearly expense by 25 to get required savings for 4%, or multiply by 33.33 to get required savings for a 3% withdrawal rate)

But herein also lies the beauty of frugality. If you can manage tolive on roughly $10,000 as year like us, you only need $333,000 to call yourself financially independent.Even annual expenses of $20k per year only require $665,000.

Of course, living on $10k is shocking to some people, but I think somewhere between $10k and $20k is entirely doable in a low cost of living area, without a mortgage payment. Therefore at the current time, Id consider us financially independent when we are mortgage free, and our investments reach $500,000.

4. What will you do after you are financially independent and free from the constraints of a job?

The same things that I do now, which is why Id rather choose to work a fulfilling career over many years. I enjoy reading, writing, teaching, hanging out with my wife and family, and traveling. I also like being productive, and believe that some form of work is a very healthy thing.

If I do decide to retire from my first career, Id like to sell used cars. I love buying and reselling in general, but used cars can have great margins and they are always in demand.

5. Any other relevant thoughts or advice on the topic?

Understand financial independence before pursuing it. I think many people get caught up in the sexy story of FI, but they dont actually think it through. Sure, having a high savings rate is always recommended. Thats a good part of this blog. But socking away money is completely different than choosing a career based on earning potential alone, or waking up one day and deciding that its time to quit your job simply because you have enough assets to cover your living expenses.

Those are major life decisions, and in complete honesty, I dont think its healthy for some people to stop working. They dont have sufficient hobbies to fill the time and are left void of purpose. This is the dark side of financial independence and the reason that people should do a little soul searching before they make these huge decisions.

There isnt any one size fits all approach to reaching financial independence, but there is a superior path. Figure out what brings you satisfaction and joy in life, then try to design a lifestyle around that. Work doesnt have to be soul crushing. If your current position makes you miserable, save enough to take a year or two off, so that you can find a way to make money doing what you enjoy. Its not all rainbows and butterflies, but I think its possible to find meaningful work and still achieve financial independence along the way.

James fromRetirement Savvy

1. What does financial independence mean to you and how are you pursuing it?

I equatewealthywith financial independence; and I define wealthy as being able to live your chosen lifestyle on passive (e.g. income fro
m defined benefit plans , Social Security benefits, rental property, etc.) income and portfolio income (e.g. defined contribution plans such as 401(k)s, IRAs, etc.) and do not require earned (labor) income. Therefore, I am wealthy when I am financially independent.

Currently, the savings/investment rate in my household on an income of $190,000 is 39%.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

I dont know that it is necessarily a case of choosing one or the other. At least that has not been my experience. My experience is that most people end up in a profession or on a career path through circumstances, some factors within their control, others not.

My suggestion to younger people, Im 47, is to learn and/or receive formal education in two disciplines (my undergraduate degree is a dual major in business administration and communications technology and I also possess an MBA) and pursue a career that you believe you will enjoy. However, recognize that life has a way of throwing many curveballs, hence the suggestion for multiple disciplines. Dont spend too many years chasing a dream job or career. It probably is not as great as you think it will be and you have to be careful not to waste too much time in the pursuit.

Most of us will end up in jobs that we are good at, or at least capable of performing moderately well, and will find sufficient pleasure in that job. I believe most people will be much better served by just going with the flow with respect to which career path they end up on and spend much more energy in cultivating rewarding relationships and attaining personal finance literacy. They both will pay significantly better dividends than a career that you love.

I believe it is a lot better to be sufficiently satisfied with your career and have significant, deep-rooted relationships and financial independence. That way, when you do walk away from the career which will happen at some point, either through choice or circumstances you are in a position to enjoy the relationships and the comfort that comes with being wealthy.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

A quick example, discounting inflation for the moment. Assume a family decides that they want to retire in 20 years and have an annual income of $120,000. Assume, that like me, one spouse is retired from the military and is currently receiving a $20,000/yr. pension; which they project will be $25,000/yr. (COLA increases) in 20 years. Further assume the following factors: neither has a job with a defined benefit plan (traditional pension) and they project that their Social Security benefits will equal $35,000. That gives them a projected income of $60,000 from passive sources.

That leaves them with $60,000 they will need from portfolio income. How large does their portfolio need to be to support withdrawing $60,000 a year and not run out for ~ 30 years? We turn to the 4% rule. That 60,000 x 25 (or 60,000 / .04) gives us an answer of $1,500,000.

Assume they currently have $50,000 in various retirement accounts. The question then becomes, how much do they need to save on a monthly basis (most of us operate financially on a monthly basis) to reach their goal?

Current Principal $50,000

Years Until Retirement 20

Annual Rate of Return Lets assume they are assuming 5%

Annual Contributions $39,390

Result = $1,500,256.21

This family would need to contribute $3,282.50 (39,390 / 12) monthly to reach their goal. Of course, if they change any of the factors, everything changes. Running ahead of pace? Contribute less. Get much better rate of return for a few years? You can lessen the requirement going forward.

4. What will you do after you are financially independent and free from the constraints of a job?

Travel, golf, travel, lift weights, travel, ride bike, travel, hike, volunteer.

Kali fromCommon Sense Millennial

1. What does financial independence mean to you and how are you pursuing it?

To me, financial independence means the ability to live off your investments and assets without being required to draw a paycheck. Ill be financially independent the day I can withdraw enough from my investments to cover my expenses in such a way that I wont outlive that nest egg Im pulling from.

Im saving everything I can, but Im not strongly motivated by the idea of financial independence or at least, Im not in a rush to get there. Ilikeearning an income. I like working, being productive, and having a career.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

Id choose working a career I loved for many years all day, every day. I thrive off challenging myself and feeling useful and productive. If I found ten million dollars tomorrow, I wouldnt just stop working. Sure, maybe the nature of the work would change because I wouldnt berequiredto earn X amount every month, but I would still work.I love what I do.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I dont know. Again, Im not that worried about reaching financial independence by a certain age. Im in wealth-building mode and will be for the next ten years or so (Im 24). My plan is to save all I can now and start crunching numbers later.

I think this approach works for us because we dont think, okay, we need X amount to have this big of a net worth by this age. Instead, its more like, what we make expenses small amount for discretionary spending = what goes into investments every month. And were always working to increase income so that leftover number is bigger.. which means what we put away is greater.

4. What will you do after you are financially independent and free from the constraints of a job?

Travel more. Experiment with different businesses or income streams. Id love to have the financial freedom to raise, sell, and train horses (its a financially risky venture, which is why I dont do it now). Find our forever home, which for us would be a piece of property somewhere out in the middle of no where that we can run as a small farm. (Yup, Laurie from The Frugal Farmer inspires me!)

5. Any other relevant thoughts or advice on the topic?

Dont make it complicated. If youre living below your means, youre doing a good job and youre on the right track to success.

Similarly, dont beat yourself up for not getting to financial independence in 10 years or less. No matter what Mr. Money Mustache says, the fact is he and his wife made solid six figures and lived off about $30,000 for 7 years to hit financial independence. Thats not an average income so it wont be an average timeframe to FI.

If you and your spouse are making $80,000 stillverygood money and much more than lots of people its not necessarily realistic to think youll be able to put away $70,000 or more for year after year after year for 7 years in the same way.

Thats not said to bash MMM I think his site is a valuable resource but itisto say, dont let anyone elses bravado bum you out and make you feel like youre not good enough or cant make you
r financial dreams into realities. Be patient with yourself! Start where you are, do what you can with what you have, always work to improve, and you will find your financial success.

1.What does financial independence mean to you and how are you pursuing it?

Financial independence is a tricky one for me. I believe this concept is a consequence of cuts to welfare and powerful economic troubles of the last three decades. People are being forced to take more responsibility for their wealth for better and for worse. Im not pursuing financial independence; rather, financial comfort. As I pay off increasing amounts debt, my only concern is feeling free from debt.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

This is a great question. I would say Im pursuing the latter. If you are looking to reach rapid financial independence, that sets you up with a select number of jobs. Youre looking at finance, oil, or some sort of massive industrial complex. None of these avenues inspire me right now. As such, Im pursuing an advanced degree in psychology and making next to nothing doing it. I wouldnt have it any other way.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I guess my question would be: Why would you stop working if you love what you do? No wealth level could make me stop Now, if I wasnt pursuing this career path, Id like need to see a number in the tens of millions to stop working and consider myself financially independent. That amount would cover moves, housing, transportation, children, and college educations for my kids.

4. What will you do after you are financially independent and free from the constraints of a job?

Again, thats not necessarily my first goal. Im interested in being free from debt. After Im done with that goal, Ill continue to save and work. My dream is not to be without work just without financial insecurity.

1. What does financial independence mean to you and how are you pursuing it?

The termindependentmeans to be free from outside control; not depending on anothers authority. In that regard, a person cant be financially independent until they are completely free from the constraints of debt. Until all consumer debt, school loans, the mortgage and any other debts are retired a person is not technically independent, even if they have vast wealth. They are still beholden to another party and have obligations that require their money go in a certain direction.

Once those obligations are gone, the individual has total freedom to use their money in any way they desire. That is what my wife and I have found now that we have eliminated all our debts. Financial independence means the freedom to pursue anything you desire with money that is 100% yours.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

The desire and capacity to work is something built into our nature as humans. There can be pleasure and fulfillment found in our work. For me, no amount of money would be worth the job that I dreaded going to each morning when the alarm clock sounded.

There is something to be said for the process of building money over time. Quick fixes dont satisfy in the long run. The stack of money will taste sweeter and will be appreciated more through the effort of consistent and diligent work that a person loves and feels called to.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I prefer not to use specific dollar amounts. Instead, I see it summed up this way: When the money a person has saved and invested makes more for them in a year than they make for themselves in a year at their job, they are financially independent. (The caveat being of course they have no outstanding debt as I said earlier.)

However, just because a person reaches this point doesnt mean they should automatically stop working. There are other life situations to consider including years to formal retirement age, ones health, lifestyle and future plans.

4. What will you do after you are financially independent and free from the constraints of a job?

My wife and I have really focused and worked hard over the past decade to budget properly, eliminate our debt and grow our investments. Part of that effort included my wife transitioning careers from high school math teacher to CPA. For her that dream career presented an opportunity to earn more and speed up the possibility of becoming financially independent.

The result of all these efforts is that, after 17 years of teaching high school students myself, Ive been able to transition to stay at home dad and personal finance blogger. Because we have reached a level of financial independence, it allowed me, and us, to invest more time in the lives of our four kids.

5. Any other relevant thoughts or advice on the topic?

Only that financial independence isnt the end-all to life. All the money in the world wont cure the emotional or spiritual hurts present in our lives. Nor will it bring true happiness and contentment. Only God can meet those needs in a persons life.

Dee fromColor Me Frugal

1. What does financial independence mean to you and how are you pursuing it?

To us, financial independence means being able to choose when and how we work. Wed like to develop enough passive income streams so that wed have the freedom to choose to quit our relatively well-paying but stressful jobs and pursue a less stressed out life. We are aggressively saving and working hard to pay off our debt to achieve this goal. We live on a small percentage of our income. Currently we put about 15% of our post-tax income into savings, but right now a whopping 40% of our income is going toward our debt repayment because we want to be debt-free so badly (darn student loans!) We also heavily contribute to retirement accounts.

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21 Experts Chatting About Financial Independence | Cash ...

Financial independence is a tricky phrase because it can mean different things to different people.

Right now, I view financial independence as being a state where I no longer have to work for money. Yet, seven or eight years ago, I might have viewed it as simply being free from worrying about my next paycheck. At different points in there, I might have seen financial independence completely differently.

Along the way, Ive come to realize that financial independence is made up of a series of stages. Some people might see more stages, while others might see fewer; I see four clear ones.

In my own financial journey and in the journey of others that Ive had conversations with financial independence generally means the next stage that hasnt been achieved yet.

For example, once upon a time, I viewed financial independence as not needing to rely on my parents or on my very next paycheck to survive. As I achieved that, my definition changed.

Lets walk through these four stages and look at what needs to be done to achieve each one.

According to recent studies, 76% of Americans live paycheck to paycheck. In the words of the article:

Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.

In other words, a person is in this category if theyre going to see significant financial problems within a short period if they lose their primary job. You can define short period however you want a month, six months, whatever.

I tend to define it as six months. If you were fired tomorrow and could survive for six months without getting a comparable job and without facing complete financial apocalypse or a huge explosion in your debt, youre probably enjoying freedom from the paycheck-to-paycheck cycle. Believe it or not, three in four Americans cant match that level.

A part of this is freedom from financial outpatient support from the Bank of Mom and Dad. If you still require a regular influx of cash from your parents to maintain your current lifestyle, then you are unquestionably still living paycheck to paycheck. Some people receive these kinds of gifts and channel all of it into savings, which is the best way to make financial progress with parental support. You must stand on your own two feet.

How did I do it? We achieved this level in late 2006 or early 2007, perhaps nine months after the beginning of our financial turnaround. We paid off several credit cards and built a very healthy emergency fund during those early months, but it took until the end of the year for us to begin to feel a bit of security about our situation.

How do you get here? The best method is to cut expenses. Live as cheap as possible and use the excess to get your bills up to date and build up some cash in your savings account. If youre not fully employed, look for work as you need income to make this happen. Spend less than you earn and master it, as youll always want to be in that state.

The next level of financial independence, in my experience, is freedom from debt. Why is this such a vital level? It represents the clearest possible case for minimizing ones monthly expenditures. Once your debts are gone, your set of monthly bills is going to be awfully small, plus you wont be giving away money in the form of interest payments.

When most people reach debt freedom, theyre often stunned at the amount of cash sitting in their checking account. It becomes much, much easier to invest for the future as you can take the money that was disappearing into a black hole of debt and instead apply it to your future. Youre building wealth instead of undoing earlier mistakes.

How did I do it? We achieved freedom from all non-mortgage debts in 2008 and complete debt freedom in 2011. Not only did it feel like a huge weight left our shoulders at that point, we noticed that our financial growth really began to accelerate. With no debt payments, we moved to a model where we have been banking my entire income since early 2012.

How do you get here? Build and execute a debt repayment plan. Keep your expenses low so that you can blow through that plan.

At this point, you can lose any of your family income streams and youll still survive. If you lose your primary job, you can keep rolling in perpetuity. You still need to work for a living, but none of your methods of earning money are a requirement. A pink slip is just shrugged off and changing career paths is completely fine.

Ideally, this is true because you have income arriving from a number of different sources. Maybe you earn money from your primary job, your investments, an array of Youtube videos youve posted, and maybe a book you wrote a year or two ago. If you lose any of those streams, youre still fine it just means you devote more time to the other ones. If you find your passion is gone from one of those streams, you can simply close one out and move to another one.

How did I do it? Sarah and I achieved this threshold sometime in late 2012 or early 2013. During that time, Sarah realistically thought about leaving her current career path for a while to pursue other things and we realized during that conversation that our finances really werent the primary part of the discussion any more. Yes, there would have been financial impact from that choice, but the discussion mostly revolved around Sarahs personal goals. She was free from her job at that point; she chose to stick with it because she realized how much she loved her work.

How do you get here? Invest for the future so that your money starts producing income on your own. Spend some of your spare time creating things that generate income for you, like writing a book or recording Youtube videos. Keep your expenses low so that you can afford to invest a lot and so that losing an income stream isnt devastating.

The final level which is the target that Sarah and I have for the future comes when your investment income exceeds your living expenses, which means that you no longer have to work for money. You can spend your time however you wish as long as you dont spend money foolishly. Ideally, your income from investments exceeds your spending so that you can roll some of that investment income into more investments, making you more or less inflation proof.

Our goal is to achieve this level by 2020 or so. Were aware that we do have the expensive mountain of three children entering into postsecondary education all within five years in the early 2020s; otherwise, wed probably be able to achieve it sooner than that.

How do you get here? Keep investing. Eventually, when you get close, invest in things that produce direct income for you, such as dividend-paying stocks or rental properties. Keep your expenses low, too.

Theres one common thread running through all of these stages: keep your spending under control. No matter where youre at financially, frivolous spending is your enemy. It pushes your financial goals away from you and increases the time it takes to move to the next level.

Still, its a balancing act. Sometimes, expenses that bring joy today are worth putting off that financial progress. The key is recognizing that your spending is slowing down your progress. Always question your unnecessary desires; let them thrive sometimes, but put the stops on the sillier ones.

This progression isnt going to happen immediately. Sarah and I took years to move from level to level, and we threw ourselves deeply into frugality while we were both working full-time jobs and I was starting a significant side business that was very time intensive and personal labor intensive. Be patient.

One final thought: it feels great to achieve each level. It makes your day-to-day life feel less challenging and less stressful. You experience much more freedom than before and you include many more factors such as personal happiness and engagement when making major life and career decisions.

Best of luck in your financial journey!

Have a question for us or just want to pick our brain? Follow Simple Dollar on Facebook. We respond to every message.

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The Four Stages of Financial Independence - The Simple Dollar

This is the last of a five-part series about the stages of personal finance. These stories have intentionally been less polished than most articles at Get Rich Slowly. This is a chance for me to think out loud, to explore an idea with you in an informal way.

In February, I wrote that I was entering the third stage of personal finance. As I made my way out of debt and began to save, I had noticed that many people passed through similar phases of financial development. We took similar steps along the way. In my own journey, the progress looked like this:

Financial Independence is my ultimate goal. Its the state in which I will no longer have to worry about money. I would have enough saved so that I could do whatever I pleased. But what exactly does this mean?

Defining Financial Independence One of the underlying philosophies of this site is that different things work for different people. We each have different goals, different strengths, and different weaknesses. Though Financial Independence is the goal for many Get Rich Slowly readers, we each mean something different by it.

In Yes, You CanAchieve Financial Independence [my review], James Stowers states: No person is free, in an economic sense, who does not have adequate investment income entirely unrelated to work. In other words, Financial Independence means that you earn enough from non-work income to fund your current lifestyle. I think this is the traditional definition of the term.

But the classic Your Money or Your Life offers a little more nuance:

When you are financially independent, the way money functions in your life is determined by you, not by your circumstances. In this way money isnt something that happens to you, its something you include in your life in a purposeful wayFinancial Independence is being free of the fog, fear, and fanaticism so many of us feel about money.

If this sounds like peace of mind, it is. Financial bliss. And if this sounds as unattainable as being rich, it isnt.

[...]

Financial Independence has nothing to do with rich. Financial Independence is the experience of having enough and then someThe old notion of Financial Independence as being rich forever is not achievable. Enough is. Enough for you may be different from enough for your neighbor but it will be a figure that is real for you and within your reach.

Another view of Financial Independence is presented by George Kinder in The Seven Stages of Money Maturity. Kinder argues that when you understand what you want to do with your life, you can make financial choices that reflect your values. In his view, the final two stages of money management are what he calls Vision and Aloha. (Note that Kinders approach contains a spiritual element. He uses language in his definitions that some may find odd.)

With Vision we understand further that money is a conduit through which our souls flow into the world. We have produced as much as we personally need. We discover within us a capacity to reach out farther than we have ever imagined toward meeting the needs of our families and communities. We find no obstacle between what we want to accomplish and what we do.

[...]

Aloha conveys kindness, generosity, at-one-ness, and compassionWe give without expectation of return, understanding that living is giving. We know both the limitations and the power of money, yet money no longer agitates us. We rest calm before it. In that calmness we can serve one another from the natural generosity that lies within and waits to be offered tot he world.

In some ways, Financial Independence is just another term for retirement. Think about it. Most people retire at 60 or 65 because thats when they have enough saved to last the rest of their lives. If they dont have enough saved, they continue working. If they manage to save the money earlier, then they retire earlier. When you retire, youre essentially declaring that you are financially independent.

Moving forward What will Financial Independence, the fourth stage of money management, mean to me? Will it be a purely monetary state in which I have enough investment income to do whatever I like? Will it be the point at which I have enough? Or will it be something deeper, more spiritual, as suggested by George Kinder?

I dont know. In fact, I dont know if Ill ever actually reach this goal. But I intend to stick to the path, working my way through this third stage of personal finance, hoping one day to reach that destination.

Your turn: What does Financial Independence mean to you? If you were financially independent, what would you do? How would it change your life? Is this one of your goals? Why? If not, why not?

GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.

This article is about Planning, Basics, Planning, Retirement

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Financial Independence: The Final Stage of Money Management

Are you planning for early retirement? Heres all the financial help you will need.

Quick! Head to the ATM and withdraw a million.

Dreaming? You might think that it takes years to build a fortune. It takes hard work and patience. Thats what they all say about financial independence. Is that true? Forget what your teacher told you about retirement planning . In fact, forget what the ole stodgies say. Youre here because you want to make it big. Fast. You can be a money making machine. Thats the gist of this entire site. We want to you be a filthy social masterand billionaire. In fact we want you to buy out Bill Gates, Donald Trump and the tycoons at Veritoria Holdings . Can you handle that kind of action? Shall we begin? Lets start with a infographic by Surveyspencer.com

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Be Inspired by Online Entrepreneurs

Traditional degrees do little to build financial independence. Take the quaint story of high school drop-outsPat StanleyandJason Langwho co-founded The Big Guns. This lean and mean IT companydeveloped the worlds fave:www.bestcellphonespyapps.com. This blog will catapult your knowledge of cell phones and cell phone apps into the stratosphere! The articles are written by an average guy possessing above average know-how and understanding of all those complicated issues that absolutely drive us bonkers! Conceptualized in a garage on an ancient core i3 desktop, the program now garners 100Million downloads- and millions of dollars in sales.On this site, you will mirror their success and build your own fortune.

Another incredibly inspiring story is that of Jay Lange. This crafty entrepreneur has taken his simple four-year degree from a SUNY school in upstate New York and turned it into quite a handsome business. Jay Lange started, Jay Lange Media Corp., from his garage and now owns and operates his own private blog network of over 30 blogs, which provides average people with the information and expertise necessary to navigate their way through the complicated world of cell phone mobile apps. His flagship blog, Cell Phone Tracking Reviews, is by far the best. I accidentally stumbled across his blog just the other day and noticed the treasure trove of information contained within. He truly does an amazing job at providing in-depth information About seemingly complicated tasks and makes them sound very simple.

Jay Lange is the foremost technical expert for cell phones and cell phone apps. This guy has made a career of dissecting the inner workings of cell phones and making them more reliable for the average user. He provides much-needed insights and education for the average consumer to determine which apps are best for them.

From humble beginnings in middle-class Long Island to now driving luxury automobiles and enjoying lavish vacations, Jay Lange truly has it all. This just goes to show what hard work and dedication can do for anybody willing to make the sacrifice.

Getting Rich Means Getting Yourself Fired- and Becoming The Boss You want to get wealthy. You seek to retire early and hit financial independence at 25. The only way to do that is through entrepreneurship. The reason is simple. Entrepreneurship puts you on the top of a social pyramid. The lower layers of that pyramid exist only to prop up the peak of that structure. Its all win-win for those at the top. The future for those at the bottom is not as bright. Hence, entrepreneurship=riches. Employment=poverty. That simple relationship leads to the cardinal rule: employed flunkies dont get rich; the employers get rich. The whole point of starting a business is to keep the lions share of the wealth while your flunkies do the work. Okay thats harsh- but thats the reality. As long as you or I are paid a salary, well jump where the bananas are thrown. Its time to break that cycle. Finish this article and youll discover how to get there faster and easier. Its time to get really rich. For real

Your Fast Track To Getting Rich Quick 1. First , grab a shiny set of wheels. Its a fact that to be successful, you must look the part. Moving ahead in life is all about the network you swim in and its a harsh reality that appearances matter. Go to Citibank right now, withdraw all your money and spend it (or lease) a shiny Hermes Belt, and Armani suit and a car with a hot V8 engine. I recommend something red with an Italian pedigree. Its vital that your car car run rings around the Jag of the venture capitalist youre trying to woo. That commands their respect. By no means should you pour all your cash into your business- investors you impress will do that for you. Thats their job. Your task is to come up with the killer Big Idea. Its the key to rapid financial independence.

2. Next, kick your boss off the 33rd floor of his corner office. As a magnate-in-making, you cant build an empire carrying an umbrella for someone else. Leave the grovelling to Colonels scrabbling for scraps at the feet of El Presidente. Its vital to file your walking papers as soon as an idea is beginning to hatch. The rationale is this: force yourself out of your comfort zone. This is the real secret of early retirement planning.You literally start you wealth building at an early age. Theres no need to get hired in the corporate world- no matter how juicy the job offered by flashy New York Headhunters.

3. Rip something off. Theres no need to create an AIDS vaccine or teleporter machine. The powerful of this world rarely came up with something new. What they did was to look at trends, then copied something that showed strong promise. Remember its a waste of mind power to reinvent the wheel- simply build on what exists! But dont just copy. Fully upgrade the thing up to version 98.321 so no one accuses you of airheadedness. I recommend sticking to simple ideas allied with your passions and highly marketable. Remember, you want to get rick quick and fast. Pouring effort into something difficult is straight nonesense. You dont make money fast that way.

4. Get out your thesaurus. This is vital. You need something fancy to embody the vague greatness of your new tech and your fledgling company. Jargon is good. 5 syllables make it better. You want a buzzword that ties tongues in knots. I kid you not: savvy nominalization can transform a feather duster into Silicon Valleys next tech trend and revolutionize the future releases of Samsung Galaxy S8 chips. Branding. Thats all its about. Forget excessive R&D. Leave that to the competition. Then copy and upgrade.

5. Fire your CEO, COO and GM. Too many cooks spoil the broth and you dont want the executive committee second guessing you every step of the way. Its a waste of time and resources. If you retain them, make sure that their contract has a clause that says All decisions of Mr. (insert name here) are absolute and final. Go it alone. That would be best. Wait am I serious? Definitely. But this applies only at the onset when you want things moving fast. As the company grows, THEN you can start offloading responsibilities while you soak the rays at the Bahamas beaches. (Think Mr. Z of Facebook. This fine billionaire controlled the company 100% at the beginning). Its also how the CEO of Highster Cell PhoneSpy did it.

6. Stick to small elephants. Gunning for the big lofty stuff like SARS cures will take too much time. Consign the pie in the sky pipe dreams to the competition- if its too lofty and it hasnt been done yet, its way too hard. The competition will burn too much time and money pulling that off. Mr. Andy Grove took decades to make his first billion off Intel; you dont have that kind of time. You want to be a Mark Z and Facebook. A social network company will ROI faster than a microprocessor affair. Small goals. Stick with that. Make your desire for financial independence guide you.

7. Hug babies. Donate to nuns. Send funds to war torn countries. Send clash of clans unlimited gems to poor African gamers. Its all about nice publicity. You want your company to have good PR. PR translates to goodwill. That will drive more venture capitalists to your door. Your war chest may be laughable at the onset- dont let that stop you. You can hold a small charity dinner and still bring accolade.

8. Make money online, offline and through non conventional channels. Your baby company is growing and it will need funding. That copied (and upgraded) business idea that you executed by yourself will evolve faster with capital . Raise funds properly- make sure you hold majority stock no matter what happens. Youre the visionary bastard wholl take things to the top. So start sourcing money from high and low places. Try borrowing from enemies. Theyll often give you a horse laugh which will toughen you up when you meet real venture capitalists. Instagram is one way to do this- when youbuy instagram likes at followershaven for $3.99 , you increase visibility socially. Same goes via Pinterest or Google + marketing. Everyone else focuses on trimedia. Avoid that expensive bandwagon. Shoestring everything. Its how to get financial independence fast so you can retire early.

9. IPO. After a fiscal year brings your first 10M, go public. Of course it helps that your accountant prettied up your financials first. Nonetheless youll find yourself swamped with new cash (for an extra Italian car) and a bunch of sordid obligations labeled preferred shares, common stock and debentures. Whatever. Just keep your eye on the ball. At this point youll have gone through the entire process of how to get rich quick.

10. Wash, rinse repeat.Youre rich! Just as with the CEOs ofAIG and Enron, youll be the top dog owning millions of shares in a publicly traded company that employs ten thousand and generates nothing. Worse- the attorney general is investigating you for fraud. So you better start unloading. Exit quietly. Then start building a new company with the fresh capital infusion still lining your pockets. Learn how to keep your empire safe from thieves and spies CLICK HERE. Racketeering Videos for reference:

Do I detect confusion? If this plan doesnt seem right , then maybe you should be developing the next cheap psoriasis vaccine. Or maybe software that tracks jihadi criminals. Perhaps a portable water purifier for third world nations. Something with a social impact. Something that puts smiles on kids faces. In fact, maybe you dont even want to get rich quick; maybe what you want is a sense of fulfillment that youve actually contributed something grand to the world. (In case you didnt notice, everything above was a satire. Get over it. ) And thats what the rest of this site is really about. Its time to change yourself and to change the world. For the better. Start your quest to get wealthy today. Begin here. And remember to to bolster all your online advertising by learning how to get high page rankfor your business. Ethically.

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Success! - How to get Financial Independence and Help For Real

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If you make $1 million a year from a job, you could lose your job any day. If you make the same $1 million from owning hotels, or businesses, no one can take that from you. Having a high income alone does not mean financial independence. Photo Credit: Robin Bartholick, Getty Images

Most people believe the key to wealth is a high-paying job. Yes, it's easier to amass assets if you have more money coming in each month, but the true secret to increasing your net worth is to spend less than you make. It is a cliche; but it is the fundamental, absolute, non-negotiable reality of money. To escape this trap, you need to understand that income is not wealth.

What is wealth? My personal definition: Wealth is the part of your net worth (assets minus liabilities) that generates capital gains, income, and dividends without your labor.

If you are a Doctor or Lawyer, you need to put in long hours after years of specialty training and higher education to get a paycheck. On the other hand, if you have a portfolio of private businesses, car washes, parking garages, stocks, bonds, mutual funds, real estate, patents, trademarks, and other cash generators, you could sit by the pool. The real value, of course, is that you could maintain your lifestyle even if you were disabled or unable to continue working at your primary occupation. Better yet, unlike a salaried employee, wealth can't fire you - you have to squander it. It's far easier to lose a job that wipe out a well-constructed portfolio.

The level of your wealth should be measured by the length of time you could maintain your standard of living without an additional paycheck. In other words, if you had to stop working right now, how long could you keep up your purchasing pattern for cars, clothing, music lessons, college tuition, video games, etc.? The average person isn't educated in this truth, which is why the more and more they earn, they are left wondering why financial independence and security continue to allude them, always seemingly just out of grasp.

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Eight Secrets to Achieving Financial Independence

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Three Methods:Maximizing Your IncomeStaying on Top of your ExpensesDeveloping Wise Savings StrategiesCommunity Q&A

However you interpret the concept, financial independence requires a lifetime of responsible, well-informed financial decision-making. For some, the term might indicate the moment you will no longer rely on your parents to cover all of your expenses. If this is a goal of yours, check out How to Start Saving to Become Independent. Later in life, the mention of financial independence may conjure the aspiration to cover living expenses without working, as many people hope to do during retirement. Whatever your personal goal, there are sound financial strategies you can implement at any age that will readily help to increase your financial independence.

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Set specific goals and stick with the plan. Understand that achieving financial independence is a long term process. Speed bumps on the road to financial independence are inevitable. Overcome temporary setbacks by sticking to a responsible financial plan. If you focus on each financial goal you set for yourself, always look for options to increase your income and reduce your expenses, and save strategically, youll steadily improve your financial stability.

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3 Ways to Achieve Financial Independence - wikiHow

Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.s non-financial writing can be found at More Than Money.

This year, I learned a lot about money.

I think the biggest breakthrough I had in 2013 was to connect the ideas of personal and financial independence. I spent a week in Ecuador talking with folks about this subject, and then I spent a couple of months putting my thoughts onto paper. Ive done a lot of writing and thinking and speaking on this topic.

But you know what? Ive come to realize that the essentials of financial independence can be boiled down to just a single page.

Financial Independence occurs when youve saved enough to support you for the rest of your life without needing to work for money. You might choose to work for other purposes such as passion and purpose but you no longer need an income to meet your expenses.

To achieve Financial Independence as quickly as possible, follow the basic rule of personal finance: To build wealth, you must spend less than you earn. But instead of heeding the standard advice to save 10 percent or 20 percent of your income, practice extreme saving. Your goal should be to save at least 50 percent of your income and 70 percent is better.

To do this, conduct a three-pronged attack.

To begin, minimize your spending. Because a handful of expenses consume most of your budget, pursue these first (and with the greatest vigor).

Next, maximize your income. Its great to cut expenses and develop thrifty habits, but theres only so much fat you can trim. In theory, theres no limit to how much you can earn.

Finally, funnel your savings into investment accounts. Take advantage of employer- and government-sponsored plans first. Then put your money into regular investment accounts. Dont get fancy. Invest your money into low-cost diversified mutual funds. Ideally, choose a total-market index fund. Ignore the news. Ignore the fluctuations of the market. Ignore everyone. Keep investing in good times and bad.

If you follow these three steps, you will become rich.

As you work and earn and save, keep score. Track your spending. Each January, conduct a review. How much did you spend during the previous year? How much are your investments worth? Have you saved enough to retire?

To determine whether you can retire, use the following assumptions:

Based on these assumptions, theres a quick way to check whether retirement is within reach.

Multiply your current expenses by 25. If the product is greater than your savings, you still have work to do. If the result is less than your savings, youve achieved Financial Independence. (If youre conservative and/or have low risk tolerance, multiply your expenses by 33 before comparing the product to your savings.)

Thats it. Thats all you need to know. Thats the sum total of everything Ive learned about early retirement over the past decade. If you want more information, check out Jacobs always-awesome Early Retirement Extreme.

GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.

This article is about The Basics, Basics, Investing, Retirement, Savings

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The One-Page Guide to Financial Independence