Category Archives: Financial Independence

SHAH ALAM Women, Family and Community Development Minister Datuk Seri Nancy Shukri encourages women to create their own opportunities, achieve financial independence, and take on leadership roles.

She said it was important to nurture a culture where women feel empowered to express themselves, undergo leadership training and acknowledge their remarkable abilities across all domains.

Citing the gender disparity in the job market, she said that men comprised 81 per cent compared to women which stood at 56.2 per cent.

She stressed that women were not seeking competition with men but strived to close the gender gap.

"I always emphasise this point (closing the gender gap) because women typically prioritise their families, often choosing not to work. There is a need for training to empower them.

How do we address this gap in terms of fostering leadership among women and within families and communities? My goal is to provide them with the necessary training and support to become confident leaders.

I encourage them to voice their opinions and take on leadership roles, she said.

Despite initial apprehension from the women, Nancy said she witnessed the women were willing to step up to speak even if they were nervous, which was commendable.

"I believe in acknowledging and applauding their courage when they overcome their fears to speak up.

This is an essential aspect of leadership that requires nurturing and encouragement." She said when met recently.

Nancy also highlighted the significant number of women in rural areas who considered it their duty to care for their families but only deemed themselves as mere housewives.

Disputing this notion, Nancy emphasised the vital role of housewives, noting that their responsibilities started from the moment they woke up until they slept, without compensation.

She pointed out that many were either underpaid or unpaid, despite the essential nature of their work.

She said her organisation's goal of empowering women to earn their livelihoods and stressed her longstanding commitment to this and this was one of the reasons why she had been fought for it ever since she was in a non-governmental organisation (NGO).

While volunteering for the NGO, she faced financial constraints and had to seek assistance from agencies to identify target groups.

When determining whom to train, the focus was on women and she readily offered the organisation's female members for such programmes.

She stressed by taking on leadership roles, women could inspire admiration within their families, motivating younger relatives to aspire to similar achievements in the future.

"I aim to instil a spirit of empowerment among women, urging them to embrace roles beyond just being women, including those of mothers and wives.

"Some men may belittle their wives due to their dependency and it is something we strive to change," she added.

Nancy urged husbands to show respect towards their wives and at the same time encouraged women to be financially independent, asserting that this independence commands respect from both spouses and sets an example for their children.

Additionally, Nancy highlighted the importance of addressing economic and security issues alongside leadership development programmes for women.

She said their efforts in organising economic initiatives, aimed to stress the significance of women's participation in the workforce, which doesn't necessarily entail leaving their homes.

Under the ministry, various programmes such as Wanita Bangkit, Two-Year Exit Program, Mama Care, and NGO initiatives like Skuad Waja are implemented to support women's development.

Read more from the original source:

More than just housewives: Ministry encourages women to embrace leadership, financial independence - Sinar Daily

Here's Journal Club 03-15-24! Every week, I hold a JOURNAL CLUB. After filtering through the articles on the web, I present a few that impacted my life this week. Be safe and stay well!

No investment is ever free of risks. Even in seemingly stable markets, investors sometimes experience unfortunate losses. Diversification, however, remains a critical strategy to mitigate risks. On that note, The White Coat Investor reminds investors to exercise caution and conduct thorough due diligence to make informed decisions in the article Diversification Always Matters (My Syndicated Investment Goes to Zero).

It may be tempting to invest during market highs. However, the better and more rational approach would be to rely on historical data and market psychology. Per The Irrelevant Investor, acknowledging the psychological aspect of investing can help you make more informed decisions. The author encourages investors to stay disciplined and avoid emotional reactions to market uncertainties in the post Nothing is More Bullish than All-Time Highs.

Investing in real estate isn't restricted to one's own city. By considering certain essential metrics, investors can identify lucrative opportunities beyond their local area. Per the author of Afford Anything, the key to success lies in flexibility and thoroughly analyzing potential territories, although unfamiliar at first. Further, the author shares helpful tips and strategies in the article The Biggest Myth That Keeps Real Estate Investors From Starting

The FIRE movement is often associated with higher incomes and homeownership. However, living frugally and pursuing financial independence remains accessible to individuals across various income groups. Mr. Money Mustache acknowledges that the soaring housing prices may pose a challenge to aspiring homebuyers, but by adopting a proactive mindset, individuals can build a fulfilling lifestyle regardless of their current circumstances in the post How To Afford A House These Days.

Read any interesting articles? We'd love it if you could please take a moment to share them in the comments below!

Thank you for reading and sharing,

Peter

Read more here:

Journal Club 03-15-24 - Passive Income MD

The Financial Independence, Retire Early movement, or FIRE, is a group of people trying to gain financial independence by amassing enough wealth and cutting their expenses so that they can retire extremely early. Many FIRE proponents are looking to retire in their 30s or 40s.

So how do people in the FIRE movement achieve their goal, and what are the drawbacks?

The FIRE movement centers on taking control of your finances, and proponents focus on earning more and spending less. FIRE participants focus on two areas, which are really two sides of the same coin:

By saving and investing their money, participants grow an amount of money that can generate enough income to sustain their lifestyles. They use detailed spreadsheets and financial plans to model how theyll be able to meet their needs based on their income and the rate of return they can expect from their savings and investments in stocks or stock funds.

To meet their goals, FIRE participants must take on extra risk by investing in stocks, and that means understanding how the stock market works and having a brokerage account. They wont be able to rely on the low returns and absolute safety of a bank account to amass their fortune.

And by spending less, they reduce the level of savings they need in order to retire early. While some FIRE critics say that FIRE participants live a too-frugal lifestyle to reach their goal, many proponents say that theyre not making extraordinary sacrifices. In fact, they say by spending on what they really love that they actually derive more enjoyment from those things. Plus, they enjoy moving toward independence, when they can do what they truly love.

But however they approach it, FIRE participants see the lifestyle as a way to spend their time doing what they really want to do rather than what society tells them they should want.

Because of their desire to retire early, many participants wont be able to take full advantage of employer-sponsored retirement plans such as a 401(k). They may or may not be able to take advantage of plans such as an IRA, depending on whether they earn income in retirement. Instead, theyll need to save in taxable accounts or in accounts such as a Roth IRA, both of which offer access to cash (at least at some level with the IRA) without any penalties.

To achieve FIRE, followers adhere to two key principles: the rule of 25 and the 4 percent withdrawal rule.

The rule of 25 serves as a helpful tool in planning for retirement. It recommends that a person should have 25 times their yearly expenses saved up for their retirement. To use the rule of 25 to figure out your FIRE number, begin by estimating your annual expenses in retirement, and then multiply that number by 25. To put it in perspective, if your yearly expenses amount to $40,000, you should strive to save $1,000,000 for your retirement, according to the rule of 25.

The 4 percent rule is a common retirement withdrawal strategy. It suggests that retirees should initially withdraw 4 percent from their total investment portfolio in their first retirement year, then adjust this figure annually for inflation, in order to make their savings last for a 30-year retirement. This guideline intends to strike a balance between enjoying life and safeguarding against running out of money in retirement.

The FIRE movement is not for everyone. It takes a certain type of person to be able to live frugally and save aggressively. It requires a high level of discipline, commitment and a willingness to live well below ones means. It is best suited for individuals who have a high income and can afford to save a large portion of their earnings.

Additionally, it helps to have a minimalist mindset and the ability to derive happiness from non-materialistic aspects of life. However, anyone who is interested in gaining financial independence and the possibility of retiring early can benefit from the principles of the FIRE movement.

Achieving financial freedom usually doesnt happen out of the blue, but instead demands a well-thought-out strategy. This is something the FIRE community is especially committed to, often mapping out their financial journey years in advance. The movement is also really supportive of members who have started the journey, and members provide spreadsheets and other tools to help each other.

This social solidarity helps FIRE participants realize that there is a community that values what theyre trying to achieve, making it that much easier to do.

Heres a rundown of the different mindsets within the FIRE movement:

The benefits of FIRE come mostly from the financial independence component, though retiring early can be a nice benefit as well.

When you become financially independent, you no longer need a bi-weekly paycheck to survive. That is because you have amassed enough wealth that your investments can cover all your expenses.

Financial security is arguably the biggest benefit of financial independence. While there are other benefits of FIRE, they tend to be enabled by the financial security that comes along with it.

For example, before reaching financial independence, you may have no choice but to keep working. But after financial independence, you can leave the moment you say thats the last straw and still be just fine financially.

Different people define FIRE in different ways. Some say you have to stop working completely, while others include the option to work a job you care about instead of simply exchanging your time for a paycheck.

For instance, there may be a non-profit working to address an issue that is important to you. A job with the non-profit may pay less than your current job, but once you reach financial independence, you can retire from your current job. Thus, the idea is to have more options and be able to do something especially meaningful to you.

They say that time is money, but for FIRE proponents, there is nothing more valuable than time. No, not even money. And once you reach FIRE, you will no longer be obligated to exchange your time for money. Instead, you can spend time doing things you really enjoy.

That could be spending more time with family, volunteering, traveling, or whatever you are passionate about. Notice how these activities usually dont pay, and yet, most of us would consider them priceless.

Criticisms of the FIRE movement generally fall into one of two key categories:

Some early retirees, for example, may assume that they could generate the kind of returns that investors have seen in stocks over the past few years. Or perhaps some may rely on their ability to pick stocks and have had a few lucky years.

Critics also say that FIRE participants are not factoring in the longer-term costs of major expenses such as health care and housing, which have continued to increase substantially. Plus, leaving the workforce may create an employment gap that many employers will view negatively. For sure, staying out of the workforce will ding the amount of Social Security income you can draw later in life, and thats when those on a fixed income may most need the money.

These are all relevant concerns, but many in the FIRE community say they have considered these scenarios and have planned accordingly. They may cite their financial models as proof that they have been realistic, pointing to detailed projections of their income and expenses.

In any case, a major decline in stocks, which typically occurs as part of a recession, will stress-test these plans and forecasts, and may challenge the security of many early retirees.

The FIRE movement is just that: a movement. It isnt a particular decree or set of rules. However, some ways to become financially independent include:

There is a lot to like about the FIRE movement even if you dont decide to retire early. For one thing, pensions have largely disappeared in the private sector, lessening the financial incentive to stay with one employer for many years.

This has also resulted in a shift of financial responsibility from employer to employee; in many ways, FIRE is just taking an already existing trend to the next level.

And even if you choose not to retire early, FI just makes sense from a financial security perspective. Thus, everyone should consider pursuing financial independence regardless of their long-term goals. You never know what could happen due to an economic slowdown or a change in strategy at your employer. FI, and thus FIRE, lead to the sort of financial security we should all aspire to have.

The FIRE movement has attracted a lot of attention in recent years some of it negative. Yet its hard to see how people consciously spending their money and time on what they truly love is anything but a net positive, even if it does have some costs along the way.

Bankrates Brian Baker contributed to an update of this story.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

Excerpt from:

What is Financial Independence, Retire Early (FIRE)? - Bankrate.com

Financial independence is a common goal for people at many different life stages.

In fact, 67% of Americans say achieving that milestone is important to them, according to a recent survey from Empower financial services.

But financial independence can have various meanings. One popular definition is having enough money to be able to stop working. A more attainable interpretation is that you don't have to rely on someone else, such as your parents or a spouse, for money.

Regardless of how they define it, Americans say financial independence is also the most important marker of overall life success, or feeling like you've financially "made it," Empower found.

It doesn't take an exorbitant salary, either. Americans say they'd need to earn about $94,000 a year on average to feel financially independent. That's about $20,000 more than the median household income of $74,580.

There are several ways people may consider themselves financially independent. A young adult who moves out of their parents' home. A subscriber to the FIRE movement which stands for financial independence, retire early who is able to live off passive income, with the flexibility to work for a lower salary or not at all.

Most people, however, define financial independence simply, Empower found. The most popular definition, chosen by 47% of survey respondents, is "no longer needing to receive money from family and friends."

"Reaching a certain net worth" (44%) and "starting to contribute to a 401(k)" (42%) were also popular definitions, according to Empower. Respondents were able to select up to three definitions.

If you're interested in achieving financial independence, the first step is deciding what it looks like for you.

"Financial independence starts with clarity," Keith Jones, senior financial professional with Empower said in the survey release. "Establishing clear financial goals provides both direction and purpose, motivating you to work towards a more secure and satisfying financial future."

If you're looking to be as financially independent as possible, a FIRE mindset might be a good idea for you. Followers typically aim for a certain net worth, known as their "FIRE number," which is the amount of money they estimate they need to have saved and invested to be work-optional.

You don't have to adhere to a specific definition of financial independence to be part of the FIRE movement. But for many followers, it is tied to the ability to retire early, which requires you to be untethered from other people and institutions, whether that's a supportive family member or an employer paying you to work.

There can be levels to this kind of financial independence, too. Jessica and Corey Fick, money coaches and personal finance content creators known as "The Fioneers," identify five levels of financial freedom. Level one is being debt-free, while level five is having enough in savings to completely replace your income.

Want to land your dream job in 2024?Take CNBC's new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD.

See the original post here:

How much money Americans need to earn to be 'financially independent' - CNBC

7 min read

Prepare yourself for an electrifying journey that delves deep into the captivating universe of Sundae The Dog Airdrops. These digital treasures, scattered throughout the blockchain landscape, offer an enticing opportunity to claim free tokens and embark on a unique crypto adventure.

Throughout this guide, well uncover the secrets behind Sundae The Dog Airdrops and provide valuable insights on quickly navigating this dynamic landscape. Its a chance to unlock your share of the crypto wealth and set off on a thrilling voyage toward building your digital fortune.

So, get ready to explore the world of cryptocurrencies like never before, where every Sundae The Dog Airdrop is a potential step toward financial growth and excitement. Join us as we dive headfirst into this remarkable journey!

As the crypto landscape continues to evolve, Sundae The Dog Airdrops have undergone significant changes since their inception. Understanding how Sundae The Dog Airdrops have evolved and what the future may hold for this unique distribution method is essential.

In the early days of cryptocurrencies, Sundae The Dog Airdrops were relatively simple and often used to distribute tokens to early adopters or holders of a specific blockchains native coin. These Sundae The Dog Airdrops allowed projects to bootstrap their communities and gain initial traction.

Sundae The Dog Airdrops served as a strategy to garner attention for emerging blockchain initiatives and ignite a palpable buzz within the cryptocurrency realm. Early participants would receive tokens, and as the projects gained momentum, these tokens could appreciate significantly in value.

However, as the crypto market grew and matured, Sundae The Dog Airdrops began to diversify in terms of their purposes and mechanisms. While the concept of receiving free tokens remained, distributing them became more sophisticated.

In the modern era, Sundae The Dog Airdrops have evolved to serve various purposes beyond simply distributing free tokens. Sundae The Dog Airdrops have evolved into tactical instruments projects adopt to realise distinct goals. These objectives include boosting user interaction, recognising and incentivising dedicated community participants, or spotlighting novel features or products.

Some common types of modern Sundae The Dog Airdrops include:

Looking ahead, the world of airdrops continues to evolve, driven by innovation and the changing needs of the crypto industry. Some trends to watch for in the future of airdrops include:

Before we begin, navigate to the Official Airdrop Page.

Your first step on this airdrop adventure is to ensure you have a cryptocurrency wallet at your disposal. A wallet acts as your digital vault, where youll receive and store the free tokens you claim. Popular wallet options include MetaMask, Trust Wallet, Binance Wallet, and many others. Verify the safety of your wallet and confirm its readiness to receive the incoming tokens.

Each airdrop comes with its own set of rules and criteria for participation. To ensure your eligibility, visit the projects website or the dedicated airdrop platform. These requirements vary widely, from following the projects social media accounts to holding a specific cryptocurrency in your wallet. Think of it as a treasure map; you must follow the clues to unlock the rewards.

Once youve confirmed your eligibility, its time to engage in the tasks assigned by the project. These tasks are not only rewarding but often engaging and fun. These tasks may include disseminating social media posts, introducing friends to the project, engaging in quizzes, or crafting insightful blog articles and creative content to promote the project. Its like going on a digital adventure with substantial rewards waiting for you.

The moment youve eagerly awaited has arrived! After completing the assigned tasks, return to the airdrop platform and click the Claim button. Your free tokens will be seamlessly transferred to your wallet when the airdrop event concludes. Imagine it as stumbling upon a chest overflowing with precious coins, only in the digital realm.

As your airdrop journey climaxes, the final step involves activating automatic token crediting. This eliminates room for manual errors and ensures a hassle-free and streamlined experience as you reap the rewards. Automation is critical in the fast-paced world of cryptocurrency, and it ensures that you dont miss out on any tokens due to human error or oversight.

Now, lets look closer at the featured airdrops waiting for you. These opportunities offer free tokens and a chance to explore intriguing blockchain projects. Lets dive into the specifics:

Imagine turning a simple claim into a potential fortune with the Sundae The Dog Airdrop.

Reward: $400 worth of SUNDAE tokens

Sundae The Dog, a blockchain project making waves in the crypto space, is offering you the chance to win a staggering $400 worth of SUNDAE tokens in their exclusive airdrop. SUNDAE tokens hold immense growth potential, making this an enticing opportunity.

Participating in this airdrop allows you to acquire valuable tokens and aligns you with an innovative project poised for a bright future. Diversifying your crypto portfolio with $400 SUNDAE tokens can enhance your investment strategy.

Seize this golden ticket to free tokens and join a promising project by claiming your SUNDAE tokens today! Remember that the cryptocurrency landscape is renowned for its dynamic nature, where astute investment decisions can potentially yield significant profits.

To ensure you never miss out on these exhilarating opportunities, consider subscribing to airdrop notification services or watching cryptocurrency news websites. The cryptocurrency market is known for its rapid developments, and new chances to claim free tokens emerge frequently. Staying engaged and informed is your key to success in this dynamic ecosystem.

Airdrops serve as your gateway to the captivating realm of cryptocurrencies, offering a remarkable introduction to the world of digital assets. Following these straightforward steps, you can initiate your expedition to claim airdrop rewards today. Seize this golden opportunity to unlock valuable tokens, marking the initial steps toward accumulating digital wealth.

Embark on this exciting quest and watch your crypto portfolio thrive with every token acquisition. The treasure hunt is underway dont delay; claim your free tokens now, and let your crypto journey soar to new heights

Read more:

Crypto Sundae The Dog $SUNDAE: Your Path to Financial Independence - Medium

NEW YORK How much do you need to make in order to really feel like youre in a good spot in life? The average American says financial independence means making upwards of $94,000 per year, and 60 percent feel optimistic they can reach this milestone.

In a recent poll of 2,000 adults, spenders and savers say financial freedom is synonymous with resilience and independence: not needing money from family and friends (47%), reaching a certain net worth (44%), and contributing to a 401(k) (42%). The new study by financial services company Empower, conducted by OnePoll, also reveals that more than two in five define making it as reaching financial independence (44%).

Doing so is important to 67 percent of Americans, though nearly a quarter (24%) say they havent yet achieved it. Definitions of success extend beyond Americans wallets to the workplace by moving up in their career (39%) and having a job they love (37%).

Despite having financial aspirations for the future, a majority of people (72%) admit they currently stress over their finances at least once per month, and nearly one in five (17%) say they worry about money daily.

Over half (57%) of Americans say they still rely on their family and friends for financial support, especially for help paying their rent (62%), internet and streaming services (56%), and their phone bill (54%). Of those who dont feel financially independent, three in 10 (31%) are optimistic they will be in the future, while 54 percent dont think theyll ever be able to pay their bills without help. The majority (92%) of financially independent Americans say they only started to feel that way once they reached the age of 36.

No matter your age, financial independence starts with clarity, says spokesperson Keith Jones, a senior financial professional with Empower, in a statement. Ask yourself what you want and why you want it. Establishing clear financial goals provides both direction and purpose, motivating you to work toward a more secure and satisfying financial future.

The poll finds many parents believe their kids should be able to pay their own bills and expenses by the time they reach age 23. Of those with adult children aged 20 or older, two in five (40%) parents surveyed currently support them financially, more than half (53%) are dipping into their retirement savings to do so, and 49 percent say they live with their children to help manage expenses.

More than half of parents regret not having more money conversations with their children while they were growing up (57%). If they could turn back the clock and do things differently, 60 percent would have made financial literacy a priority.

This random double-opt-in survey of 2,000 general population Americans was commissioned by Empower and fielded by market research company OnePoll between December 11 and December 12, 2023. OnePoll team members are part of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).

More here:

Salary Success: Is $94000 the Magic Number for Financial Freedom? - Study Finds

zimmytws

When I first approached the world of finance, I had a completely different attitude than I do today. I was convinced that anything that was mathematically right coincided with the correct choice to make; therefore, simply doing calculations was enough to achieve any goal.

In particular, right from the start I was passionate about FIRE (Financial Independence, Retire Early). After all, being financially independent as soon as possible is all we aspire to when investing our money. In any case, I have noticed that in some cases the concept of FIRE is taken to extremes, and in this article I would like to discuss the problems that such a lifestyle can bring.

No one doubts that it is wise to save as a young person in order to have a nice nest egg as an adult, but it is not always the right financial choice for us.

FIRE refers to a lifestyle of reducing expenses and increasing investments to quickly achieve financial independence and the ability to retire at a young age. You can find many articles online that explain how to retire in your 40s or even 30s. There are some authors who promise you an early retirement simply by investing in a stock: my invitation is to be wary of those who promise you difficult goals with minimal effort. This is not the reality, otherwise we would all be rich.

FIRE's first problem concerns goal setting since there are no one-size-fits-all standards. What does it mean for us to be financially free? Getting around in a Ferrari at 40 or being able to cope with any unexpected expenses at 50? Much depends on the value we place on money.

The moment the goal is set, our life will revolve around it, so it is of crucial importance to do it judiciously. However, it is not easy for two reasons:

These two aspects generate considerable uncertainty and, more importantly, have a strong psychological impact over the years. When you are young, it is much easier to save and be positive, but the moment a mortgage and a family take over, unexpected expenses are the order of the day, which could jeopardize your constancy. As a result, you will be forced to reduce your investments and scale back your goals, which is not easy to accept.

In short, life is far from predictable, and in time, the goals you set in your 20s and 30s may turn into nothing more than a dream from when you were full of enthusiasm.

As mentioned earlier, the amount of money to aspire to in order to feel financially independent can vary greatly, depending both on the country of residence and the kind of life to be made once retired. For an American a good figure might be $3 million at age 50; for a poorer country $1 million would already be a lot. Be that as it may, in either case reaching this goal would involve a huge sacrifice for a person with an average income (obviously for those who are wealthy the problem does not exist). Specifically, in the case of the $3 million one would need to invest $18,237 each year and achieve an average return of 10%. And I am considering reinvested dividends.

Anticipating this by 10 years would imply an annual investment of $52,378. Basically, one would have to live with parents until the age of 40, have no family, hardly ever go out and have a good job as well. But is it really worth it?

If we were relying solely on the monetary aspect, it would be absolutely advisable to accumulate as much as possible in order to take full advantage of compound interest. Spending money or even receiving dividends (a tax disadvantageous solution) will postpone the time when you will be financially independent. However, people are not machines, and what makes sense mathematically is not always the right thing to do.

When it comes to investing, the most important thing is the psychological aspect in my opinion, since where and how much we decide to invest greatly affects the quality of our lives. Maintaining a balance and a certain serenity is what we should all aspire to, and I don't think it coincides with retiring at 40-45 years of age. You may have your $3 million at that age, but if you have completely sacrificed your best years you will probably have other problems to deal with.

Moreover, I doubt that a person with an average income can really maintain such a low standard of living for decades only to stop working at 40-45 years old. Saving as much as possible and investing for the very long term is sustainable only if the sums involved are minimal compared to the salary. Otherwise, the initial enthusiasm will gradually be replaced by a feeling of discouragement. After all, who guarantees that we will ever see the fruits of our investments? In 20-25 years, anything can happen.

The aspects that can really help you during your journey to financial freedom are only two: increase the money invested or improve the annual return.

Increasing the money invested obviously requires earning more money since saving too much can limit your lifestyle too much. In this case, it is useful to look at ourselves as a kind of investment, since the more knowledge we have, the more chances we will have to climb up the hierarchies work-wise. Spending thousands of dollars on our education instead of investing it in the S&P 500 may prove to be an even more profitable investment in the long run. So, in order to achieve an early retirement, it is also necessary to increase your knowledge: you may benefit both mentally and economically. Earning 20-30% more than the average can make a huge difference in reaching your early retirement.

The second aspect concerns the annual return, a component that can disrupt the final outcome. A small variation can lead to completely different results:

Of course, when we make an investment we hope that it will turn out better than expected and especially that it will beat the market. Anyway, we are not all Warren Buffett and that is often not the case. Investing in individual stocks rather than in a well-diversified ETF can prove to be no small mistake and may disrupt the timing of early retirement. In other words, taking big risks to get rich as soon as possible is a strategy I do not recommend for those who really care about their retirement. Wealth is a process and not an event.

For some people, getting 10% per year may not seem like much (average return of the S&P 500 over the past 30 years) but it is actually enough to create wealth: sometimes more than money, patience is lacking.

Early retirement is the dream that many pursue but few succeed in achieving. In my opinion, the reason why many fail depends mainly on the motivations that drive the individual to invest in the first place. The harsh truth is that financial markets will not make the average investor rich unless you are willing to be patient for decades. However, taking the FIRE concept to extremes can lead to a lifetime of regret, just as seeking high-yield investments can lead to substantial losses that will only make you poorer.

The right approach to operate in the financial markets is to take a long-term view, and to do this we need to look first at our psychological well-being: without it we will not be able to be consistent for decades. Assuming that the performance of the S&P 500 is similar to that of the past 30 years, it only takes a little to achieve a major accomplishment:

Since the average annual salary in the U.S. is $59,428, these seem like pretty affordable figures to me and not so high as to weigh on an individual too heavily. For those who save a little more, there would also be room for individual investments. Of course, even then you risk not getting the amount you hoped for, but at least you will not have sacrificed your whole life. Anyway, almost certainly even in the worst case scenario you will end up with a good nest egg. You won't be driving around in a Ferrari, but you can take a lot of satisfaction out of it.

Overall, I think the topic of early retirement is a dangerous fad because it generates false hopes in the average investor. Assuming there is someone who, thanks to his or her investments, can stop working before 50, he or she will not necessarily achieve the much-coveted happiness. Chasing that goal for the better part of a lifetime may have overshadowed many other aspects far more important than any amount of money. For those starting from scratch and earning average income must see the financial markets as a way to supplement their salary not to replace it and live off of it, otherwise they will most likely be disappointed. Accepting this harsh truth from a young age, I believe, is the only way to make the investment process satisfactory in the long run; the alternative is to tell ourselves a big lie that is not meant to last forever.

This article is aimed primarily at people of a young age; after all, they are the retirees of the future. In any case, I would greatly appreciate comments from someone with more experience. I think young people (including me of course) can learn a lot from those who have already faced this tortuous path.

Read the rest here:

Early Retirement Is Just A Big Lie - Seeking Alpha

I have tracked the amount invested in my goal portfolio for over 12 years. It has been a life and game changer for my family. Whether you track your spending or not, tracking your investment amount is crucial.

Today, I can invest more for retirement than my target investment. That was not the case when I started. In 2011, I noticed I was consistently investing less than the target. For several months in 2013, 14, and 15, I could not invest due to higher expenses and struggled to make up for it. For details of my portfolio holdings and review see:Portfolio Audit 2023: The annual review of my goal-based investments

By target, I refer to a thorough retirement planning calculation output. If you are wondering, Why did he stop investing due to higher expenses? Why did he not use an emergency fund? ask yourself, How will you refill a depleted emergency fund? How will you handle an unexpected recurring expense? There are many situations when the emergency is bigger than the emergency fund.

The number one benefit of tracking investments: You are aware of your future goals, you appreciate how much you need to invest for them, and whether or not you can invest that much, you have a target. Knowing where you stand is the first to appreciate how far you need to travel if you need some inspiration to get started, check the personal financial audits from our community linked at the end of the article.

Number two: I often listen and re-listen to the excellent money management classic The Richest Man in Babylon, and each time I learn something new, I find a new article idea. One of the earliest known mentions of pay yourself first. When we track investments, we get a sense of accomplishment that is, we find some balance between current and future expenses (the reason we invest).

Number three: When you pay yourself first (if you can), tracking expenses becomes unnecessary (IMO) and essentially an academic exercise. Budgeting is essential when money is tight, and you struggle to make ends meet. Once you can regularly find a surplus when paying ourselves first is possible budgeting is unnecessary. We invest first and spend the rest.

Budgeting builds discipline and gives you an insight into personal inflation. Once you appreciate the importance of discipline in spending and the inflation rate, your overall portfolio has to keep pace with after-tax; it becomes superfluous. However, it is a therapeutic regimen for some: What 25 Years of Tracking Expenses Taught Me.

If you need some assistance in this regard:

For someone under 30 reading this, I urge you to do everything possible to get to this position first where you can invest some amount (any amount) regularly. This is the first step to building wealth.

The next step is to increase the amount we can invest by as much as possible every year. Our income should increase, but our expenses should not grow simultaneously! Again, quoting the richest man in Babylon increase thy income!

If you believe your income is low and you do not see it increasing too much in future, then do everything possible to learn new skills or have a side hustle to increase your income.

Children with financially secure parents should be told to qualify, build skillsets as much as possible, and become professionals or entrepreneurs instead of run-of-the-mill salaried guys in their early 20s. There will be a long struggle, and you will not be able to invest anything in your 20s or even up to your mid-30s. Still, you can easily catch up later with essential money management commonsense and higher salaries.

The results of a retirement calculator would always look impossible to achieve (otherwise, there is something wrong with the computation!). See, for example, We lost sleep after using a retirement calculator! This is how we recovered. However, we must have the hope, perhaps even a vision, that we will earn more and invest more in the future.

The trick to succeeding with anything in life is to work consistently without expectations and any sign of an obvious reward for our efforts. Investing systematically is a simple example of this activity. Tracking investments helps you stay on course. It reminds you of the progress you have made or reminds you (painfully) of the distance that you need to cover.

For our family, diligent goal-based investment planning and tracking for 10-plus years have been life changers. It has transformed us from middle-class subsistence to financial freedom:15 years of mutual fund investing: My Journey and lessons learned.

This is the average rate of increase in monthly investments for retirement. I lost the 2016 data due to a hard drive crash (for the last few years, I have worked entirely on OneDrive). I started investing in mutual funds in a small way in June 2008, but it was only in 2010/11 that I started proper goal-based investing.

I recommend maintaining a 10% increase in investments yearly or 70-100% of your monthly expenses. This will get tougher with time, but we must try. Investing 2-3 times monthly expenses would be necessary for early financial independence aspirants.

In my case, it is a sheer providence that I have been able to achieve an investing annualised growth of 18% consistently (rate of increase in investments each year). My investment annualised return, that is, the rate of increase in market value, is about 16% (from June 2008 to Sep 2022) less than my investing CAGR And it fluctuates a lot more! See: My retirement equity MF portfolio return is 2.75% after 12 years! I tracked my investments more often than I have tracked their value. So I see this as a just reward for the effort.

Tracking investments each month for each goal has the same benefits as tracking our exercise regimen with an app or watch. It gives you a small control over the controllable and lowers your fear of the future.

Many youngsters assume paying ourselves first would be depriving ourselves of the pleasures of life. This is not true. The sole purpose of money in our lives is to get spent for our benefit. Investing is a way to ensure we can continue to spend happily in the future. So we need to find some balance between spending today and developing an ability to spend the same way tomorrow. How we find this balance is personal and up to the individual.

This is the template I used to track investments: Download the free monthly financial tracker. Users of the freefincal mutual fund and stock portfolio tracker can upload this sheet onto their existing Google Sheets file.

Check out some personal financial audits from readers.

These published audits have had a compounding effect on readers. If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail. They could be published anonymously if you so desire.

Do share this article with your friends using the buttons below.

You Can Be Rich Too with Goal-Based Investing

Your Ultimate Guide to Travel

Visit link:

How 12 years of tracking investments has been a life-changer - freefincal on YouTube

More than half of working Americans feel they are falling behind on their retirement savings, according to a recent survey. However, figuring out the amount of money needed to retire is an essential step towards financial security in your golden years.

Calculating Your Financial Freedom Number

The key to achieving financial independence lies in the simple formula recommended the FIRE (financial independence, retire early) movement. This formula suggests that you should have 25 times your annual expenses invested. To determine this more accurately, begin totaling your monthly expenses in five basic budgeting categories:

1. Food costs, which include eating out and groceries. 2. Transportation expenses, such as car payments, insurance, fuel, and parking. 3. Housing costs, including rent or mortgage payments, as well as taxes and insurance. 4. Utilities, encompassing electricity, cell phone bills, and internet. 5. Health expenses, which cover essential items like toiletries and cleaning supplies, as well as medical and wellness needs.

Once you have calculated your monthly expenses, multiply the total 12 to obtain your annual amount. Multiply this figure 25 to determine your personalized FIRE number.

Taking Control of Your Financial Future

It is important to note that the FIRE number assumes a 4% annual withdrawal rate, considering the potential growth of investments through interest or dividends. Hence, you are unlikely to exhaust your retirement savings within your lifetime.

While the idea of needing to become a millionaire for a comfortable retirement may seem daunting, there are practical steps you can take to improve your financial prospects. Begin paying off debts, such as student loans, car loans, and credit card debt. Streamlining your daily expenses adopting a more essentialist lifestyle can also contribute to reducing your FIRE number.

Taking small steps towards investing in your FIRE number can have a significant impact on your quality of life. Although you may not be able to retire early, following this formula could grant you the freedom to pursue your passions or indulge in travel.

By embracing a proactive approach and striving to move closer to your financial goals, you can significantly expedite your journey towards a well-deserved retirement.

Read more:

Understanding the Path to Financial Independence in Retirement - TickerTV News

For years, the recipe for building wealth was straightforward: Graduate from college, get a good job, live below your means and invest the rest.

But a group of financial enthusiasts are veering off that path in favor of a more accelerated approach known as FIRE, or financial independence, retire early.

FIRE followers aim to exit the workforce years, even decades, ahead of schedule by drastically cutting expenses, boosting their income and investing heavily.

But like much of finance, FIRE blogs and Reddit threads are often dominated by non-diverse voices. We spoke with three women from diverse backgrounds who are challenging that stereotype and reshaping the conversation around financial freedom.

Meet three female FIRE followers:

Heres how these women are approaching the journey to financial independence, and how you can do it, too.

Many Americans struggle to save enough money for retirement by age 65 let alone 45 or even 35.

It takes hard work to retire early, so before you get started on your FIRE journey, understand your motivation.

For Torres, FIRE represents the freedom to walk away from her engineering career and pursue her creative passions full-time.

Youre not withholding to company layoffs, downsizing or a pandemic, says Torres, who quit her job in 2021 to pursue her company full time. Financial independence makes work optional.

For Saavedra, FIRE affords her the freedom to stay at home with her two young children while running her business part-time.

Because my husband and I were saving for a goal bigger than ourselves for our future children - it felt very meaningful, says Saavedra, who recently moved to California with her husband and two children. The sacrifices we made didnt feel like much of a sacrifice when we looked at it that way.

Rita-Soledad Fernandez Paulino, a first-generation Mexican-American living in California, started her journey toward financial independence at age 32 when she created her first budget.

Until then, I had just picked up side gigs, like babysitting, if I needed extra money, she says.

The turning point came after Fernandez Paulino was forced to take medical leave from her job as a public school teacher.

While collecting disability and confined to bed rest, the mother of two says she decided to get a firm grip on her cash flow and create a budget.

It made me be more intentional with my spending, says Fernandez Paulino. I used those budgeting skills to really buckle down and pay off my student loans.

Financial independence hinges on shedding student loan and credit card debt.

Fernandez Paulino paid off the rest of her and her husbands $23,000 student loan balance in 2019 after trying to apply for the federal teacher student loan forgiveness program.

Meanwhile, Torres aggressively paid off her $39,000 student loan balance from 2016 to 2020, making extra payments using revenue from her food blog side hustle and additional windfalls, like tax refunds.

Sometimes I would pay two, three, four times the minimum payment on my loans, she says.

Torres also refinanced her loans four times, each time lowering her interest rate and shortening the repayment period.

Frugality is a cornerstone of FIRE. Cutting expenses and learning to live on less are key strategies for building a massive nest egg in a short time.

Some FIRE followers embrace frugality more than others. Two subreddits, r/LeanFIRE and the more extreme r/PovertyFIRE, include members who live off $25,000 a year or less and plan to continue that minimalist lifestyle through retirement.

Saavedra, the daughter of Chinese immigrants, says she learned frugal habits from her parents. But in her mid-20s, Saavedra stepped up her saving habit in a big way.

She and her husband stuck to a strict budget when they were dating and after they married. They decided to live off just one persons salary in New York City for several years, aiming to save about 50 percent of their income annually.

Our thought was that if we learned to live off the lower of our two incomes, and then we had a kid, we wouldnt worry about the added cost, says Saavedra. And one of us could potentially be a stay-at-home parent.

The couple saved thousands of dollars a year by moving into a rent stabilized apartment, helping offset some of Manhattans high cost of living.

Neither owned a car and they both saved money on public transportation by walking as much as possible. Instead of pricey dinners in Midtown, the couple invited friends over for potlucks and home-cooked meals.

And since Saavedra and her husband were making six figures shortly after college, it didnt take long for the couple to amass a major nest egg.

By the time Saavedra got married at age 28, she and her husband both had six-figure net worths.

A few years later, Saavedra says her personal net worth hit the $1 million mark.

Frugality is really what drove the rapid growth in those final years before I hit $1 million, she says.

In July 2023, at the age of 37, Saavedra left her full-time six-figure consulting job to retire early.

I walked away because I wanted the freedom to do something else with my life and focus on being a mother, she says.

Budgeting helped Fernandez Paulino reign in her spending and prioritize paying off her student loans, but she soon realized she couldnt save her way to financial independence. Not on disability checks, or even a full-time teachers salary. She needed to earn more money.

I like spending money, says Fernandez Paulino. I get a lot of joy out of shopping. So cutting back on everything I enjoy just didnt feel sustainable.

A subset of the FIRE movement, known as Fat FIRE (in contrast to Lean FIRE) favors a less frugal and more lenient approach to building wealth. People with this mindset dont worry so much about making dramatic sacrifices today, but instead, focus on ratcheting up their earnings.

Torres thinks theres too much emphasis on frugality in the broader FIRE movement.

I want to still enjoy my life in the present, she says. I dont want to keep living like a broke college student.

As a Latina from a working-class Puerto Rican family, the thought of cutting back to bare essentials also conjured up unpleasant childhood memories of sacrifice and struggle.

It was kind of a trigger to even think about going back to that mentality, she says.

So while both Fernandez Paulino and Torres recommend creating a budget, getting a handle on your cash flow and saving money, theyre fueling their FIRE journey with our next tip: Earn more money.

To achieve FIRE, all three women aggressively pursued higher salaries and additional income streams.

Saavedra stressed the importance of asking for more money in your 9-5 job.

You need to back up your negotiations with data, she says. Know what the competition pays, know what other people were able to achieve within the same company and at the same level.

Saavedra says she often interviewed for jobs when she was employed just to gauge the market rate for a candidate with her background.

Saavedra and Torres started earning six-figure salaries shortly after college (Torres as an engineer and Saavedra as a management consultant), but they didnt fully embark on the road to financial independence until they created their own side hustles.

Torres started her food blog, Delish DLites, in 2013 when she was 25. She was in-between jobs and decided to devote time to a creative pursuit.

I always loved being in the kitchen and knew I wanted to do something around that, says Torres. It was just a hobby at first, an experimentation really.

A few years later, Torres began chronicling her financial journey on social media. She interviewed money experts on her podcast Yo Quiero Dinero, which focuses on helping Latinas build wealth.

Success didnt happen overnight, though. Torres says it took about seven years before she earned enough passive income from her food blog and other content streams to quit her day job and work her side hustles full-time.

At some point, each of these FIRE followers made the decision to pay for additional education or training to boost their earning potential.

Saavedra says she charged almost nothing to gain exposure when she first started her wedding photography business. After receiving additional training and improving her marketing skills, Saavedra was able to charge over $5,000 per wedding at the height of her side hustle.

Working with a financial advisor or a similar professional can help you map out your goals and avoid common pitfalls.

You have to realize there are areas where youre not the expert, and you may need to pay other experts to help you learn quickly, Saavedra says.

Investing in broadly diversified ETFs and index funds is a tried-and-true strategy used by millions of Americans to build wealth. Its also how Saavedra grew her sizable investment portfolio.

You cant buy back time, Saavedra says.

Index funds are a collection of assets, usually stocks or bonds, that share a common theme. Some of the most popular funds track the Standard & Poors 500 index a collection of Americas biggest companies. It has a track record of about 8 percent annual returns over time.

The beauty of index funds is they offer instant diversification, so you dont need to be an investing expert to get started.

We just invest the way Warren Buffet says the average American should invest cheap index funds, says Saavedra. Im not a stock picker. Thats not my job.

Saavedra says she bought many of those index funds inside tax-advantaged retirement accounts, including her workplace 401(k). When she started her financial education company, Save My Cents, in 2016, she also signed up for a SEP IRA.

SEP IRAs are a type of individual retirement account that allows a company to contribute up to the lesser of 25 percent of your compensation, or $66,000.

For workers who double as their own bosses, like Saavedra, a SEP IRA offers the chance to set aside much more money than they could in an employers 401(k) plan, which caps employee contributions at $22,500 in 2023 and $23,000 in 2024.

The road to early retirement begins with your FIRE number, or the amount of money you need to save to live the lifestyle you want after exiting the workforce.

Many people pursuing FIRE follow the rule of 25, which means accumulating 25 times your annual expenses before retirement.

To get this number, first multiply your monthly expenses by 12. Then multiply that annual expense by 25 to get your FIRE number.

Looked at another way, 4 percent of your net worth should be equal to or greater than a years worth of living expenses. Why 4 percent? Over the long term, the stock market has historically returned over 8 percent annually on average, so 4 percent is a conservative enough withdrawal rate to keep your investments growing.

Fernandez Paulino set her withdrawal rate at the standard 4 percent due to her heavy stock allocation.

If I were ever to change my asset allocation to have more bonds, I would change my withdrawal rate to 3 percent, she says.

Its important to consider the type of lifestyle you want in retirement. A higher withdrawal rate offers a more comfortable lifestyle, though youll need to save more money to afford and maintain it.

Traditionally, FIRE followers set a hard date to retire.

But the women we spoke to are interested in a more work-optional future, not a permanent departure from work.

For me, it was about figuring out how much I needed to make to replace my six-figure salary, says Torres, who achieved that goal in 2020. Then I said if I could replicate that again, I would officially be financially independent.

So, for Torres, she achieved financial independence in 2021 at age 35, though she still continues to run her businesses.

Saavedra was clear about her FIRE date: I never set a date.

She recognizes the value of work, citing its positive impact on mental well-being.

I decided to continue working because it made sense for me personally, she says.

According to Fernandez Paulinos calculation, she should be able to retire financially independent by age 47 if her company meets annual revenue goals.

Ive really been focusing more on a work-optional life, she says. If I miss my FIRE date, thats fine. Im working for myself, doing what I want.

She describes her FIRE date as aiming for the moon. Even if she fails, shell be among the stars.

Youll still set yourself up for a comfortable retirement later, even if you dont hit your target FIRE date, she says.

Achieving financial independence can be a psychological challenge, particularly for women of color and first-generation Americans who may be the first ones in their family to accumulate wealth.

There can be this feeling of wealth guilt, of who am I to even deserve this? says Torres.

For some people, feelings of unworthiness or insecurity can lead to self-sabotage, like failing to invest because youre afraid of losing money in the stock market and letting down people who depend on you, says Torres.

Fernandez Paulino recalls crying in a meeting last fall when she realized she was on track to make $100,000 after launching her business.

I kept thinking, This doesnt happen, this isnt safe, this is crazy, she says.

Therapy can be helpful in fact, all three women praised the benefits of therapy as a way to combat negative emotions and even address past financial trauma.

You have to become very thoughtful about your narrative, the thoughts you repeat to yourself, says Fernandez Paulino.

While therapy is valuable, these women stress the importance of self-care and a strong support network, too.

Finding a community where you can celebrate your financial wins can be a game changer, says Fernandez Paulino, who felt discouraged after no one liked or commented on her Instagram post about paying off her student loan debt.

I felt like I was the only one going through this, she says.

Ultimately, she discovered the FIRE movement, and connected with others in the Latinx community pursuing similar goals.

Fernandez Paulino believes that for women pursuing FIRE, especially women of color, its also essential to give yourself grace and practice self-care.

You really have to learn how to take care of yourself mentally, physically and financially, she says.

Thats the common goal after all: True freedom.

Read this article:

Females On FIRE: 3 Diverse Women Share Their Journey To ... - Bankrate.com