[Photo Credit: Courtesy of Eren O.]
Financial Independence
Tuesday, September 4, 2018
A lot of millennials are doing it now, that is trying to retire early. Our parents worked hard in the industrial age and so did our parents’ parents. Times have changed as they always should be. Maybe it’s a cultural generation gap thing or differing of beliefs with respect for different new things things. Whereas previous generations respected hard work, common sense, and tradition, our current culture continues to appreciate going against the current establishment and against convention.
Can we blame the change in thought processes? After all Steve Job and Apple’s “Think Differently” slogan influenced a whole generation, as well as, Bill Gates who famously dropped out of college to pursue his dreams. Not only him but people like Zuckerberg did so too. And now look at him and Jeff Bezos both taking the path least travelled by. Bezos walked away from a steady job to pursue his dreams when he discovered the new frontier of the Internet. And we applaud and appreciate these counter-culturists more in this generation than we ever have. We rail against rote teachings and memorization and we appreciate free thought and free thinking.
In the above article we see that working hard definitely has the benefit of producing high income, but not everyone wants to live the high income AND high stress lifestyle. Our lives were not designed to work in high intensity / high stress life styles for long periods of time. That’s why even though a lot of people in Eastern culture work hard jobs and stressful positions and end up sleeping on trains and passing out in the streets. It’s well documented that people in Japan, in trying to keep up with American life after WWII, worked at incredible grueling paces to industrialize but at a cost of becoming workaholics. Life is made so you work to live, not live to work. And I didn’t understand that saying when I first heard it but I do now.
A lot of these people are feeling what I call “The Awakening”. They say to themselves “Why am I working so hard? Is this all worth it? Am I trading hours of my life for more money and in essence enslaving myself to a repeating cycle of needing more money to keep up the lifestyle?” A lot of these people are retiring at earlier years, 28 years old for Michelle Gardner-Shroeder, blogger of Making Sense of Cents. Some people are leaving the workforce in their 30’s. Some in their 40s. They are leaving and not looking back so that they can enjoy the best years of their lives.
These people are setting the work place on its head and taking on the FIRE challenge movement which stands for Financial Independence, Retire Early. Forget about the ice bucket challenge and cinnamon challenges. The real prize is being able to reclaim back your life from working and being chained to your desk looking at the clock. Nay, don’t spend your life in a black hole of consumerism. And don’t trade time for money if you can. Value the quality of life.
Some of those in the FIRE movement are often in the tech and finance industry and concentrate on the minutiae of getting the best reward and interest and best bang on their buck. They concentrate on researching the best bank rates and interest rates, ROI’s and trying to get high yields. Many practice variations of FIRE customizing it based on their own needs and income thresholds. Not everyone draws at 4% and not everyone makes income that’s 50k or 80k or 100k a year.
A lot of these individuals also also big savers. They practice modesty, downsizing and getting rid of huge mortgages. Many live off of investment accounts. They realize that time in life is too precious to be working for someone else. And they often save money by doing things that take a little more time, which they have when they are now “retired”. The key is living below your means.
Many people in life could simply have more time to pursue their creative pursuits and dreams if they weren’t working so much overtime and tied to menial tasks at work. When you have the money and achieve a certain finance independence you can start working on financial freedom.
Some of the people in the FIRE movement have also been lucky to have had some very good years in the stock market and Internet boom.
Many are worries about being dime-a-dozens at work and job hop to get the required skills to improve themselves. They aren’t satisfied with what their parents used to have with disappearing pensions and less job security and the possible phasing out of social security and are getting smarter about uncertainty in this economy.
Why be a slave to mortgage and home ownership when you never really own a home anyway? You don’t pay taxes it’s gone. With jobs consuming their full waking days and trying to take kids of kids and so much pressure it’s easier to just walk away and change the rules of the game. We have to be self sufficient because all those benefits and pensions and things that we were promised would be around were being pulled out from under us and the wool over our eyes. The banks being bailed out and job security and changing all the benefits. Get in and get out.
Tips to start:
- Stop eating out so many nights a week so you can build up wealth and then compound it faster.
- Relocate to cheaper places aka arbitrage.
- Blogging to create additional income
- Spend more time with family and working out and around the house. Let time happen to let your portfolio grow. Read more and volunteer and cook. Less stress, be blessed.
- Eliminate debt
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Figure out your budget and net worth and how much you have incomewise
The trusth must come out.
Plan where to live and how to live. Retirement community? Nursing home? Insurance…?
Figure out what retirement means? Traveling? Staying at home? Day to day?
Consider your tax strategies.
Reduce spending. Maybe more bonds as you get closer to retirement also.
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Want to learn more?
Here are some references to do more of your own research:
Great articles to follow include:
Mr. Money Mustache. https://www.mrmoneymustache.com/ (Pete Adeney)
Reddit: https://www.reddit.com/r/financialindependence/
Your Money or Your Life https://vickirobin.com/
https://www.newyorker.com/magazine/2016/02/29/mr-money-mustache-the-frugal-guru
Playing with Fire: https://www.playingwithfire.co/
Write a Financial Blog https://www.1500days.com/
Early Retirement Dude https://www.earlyretirementdude.com/
Our Next Life https://ournextlife.com/
Frugalwoods https://www.frugalwoods.com/
Millenial Revolution https://www.millennial-revolution.com/
Financial Freedom from CNN Money: https://money.cnn.com/2017/08/02/pf/early-retirement/index.html
https://www.aarp.org/money/investing/info-2018/ten-commandments-of-smart-investing.html?cmp=SL-DSO-OUTBRAIN-DESK-MONEY-MONEYRSS-MIXED-CPC-BRANDSAFE_Here+are+Allan+Roth%27s+Ten+Commandments+of+Money_00ba7bf304dc874585cdb84ddbd325db43_CNN
Got some tips on how to be a FIRE starter? Got ideas on saving or being frugal or getting to retirement faster? Comment below! We love hearing tips on saving and making money. That’s what our site is about.
[Photo Credit: “Riding off into the Sunset”. Courtesy of Eren O.]
