Starting the FI Journey
Going from 40K dollars in debt, to being debt free was exciting and rewarding. Today I am essentially at point zero, and far away from financial independence, but with focus, strategy and consistently achieving at least small 1%’s everyday, I aim to get there within 8-10 years.
My (self) declaration in 2020
Over the last ten years, I have followed personal finance blogs and podcasts which have helped me stay motivated to continue forward in my financial money journey and get myself out of debt. In the year 2020, I declared to myself that I will actively seek to be Financially Independent at some point. With this blog, I will track that progress and post useful insights learned throughout my journey. I hope this information can help others in their own FI journeys. It will also serve me to stay accountable and as a repository of my journey to FI.
There was once a time when I thought I would never be able to get out of debt after accumulating tens of thousands in student loans and double digit credit card debt. I am happy to say that I have now been able to climb myself out of debt a couple of years ago. The climb out of debt was rewarding and the result was satisfying! However, since then, I have found myself kind of aimlessly floating. Getting out of debt was so clear and also visual, it was easy to stay motivated as I had a very clear set goal. Now the thought of investing seems daunting as I have limited knowledge, practice or experience with it. Since getting out of debt I have not actively taken steps to get myself to FI. I have however kept my discipline on maintaining expenses low and saving, but I was not saving with a goal in mind. Instead, it has been out of habit in a way, going through the movements from the lessons previously learned, simply putting my money away, not putting it to work or earning from it. My goal now is to teach myself and hopefully others how to put their money to work, so can do the work and we can enjoy more of our time.
I am 32 years of age today, my goal will be to declare myself financial independent by age 40.
What does FI mean to me?
But what does FI mean to me? I would define it as having the ability to stop mandatory work whenever I wanted. In simple terms, to not have to work to sustain my lifestyle. In order to accomplish such a goal, a reliability from a day job would need to be limited or in a best case eliminated. My strategy has five components outlined below. The first is to get out of debt, then to build an emergency fund. Following the teachings of Dave Ramsey I have completed these two items. The next would be to build side hustles to start to diversify your income, just as important however is the practice of investing. With purposeful living being the core of everything.
The Strategy
Hustles
Diversify your income. Renting out your car, an extra room, starting a webpage or vlog. Do things you enjoy or could see yourself doing on a longer basis. In the end you will develop these skills and it will keep you happier if you earn money from doing things you like.
Purposeful Living
At the core is doing what you enjoy. Learning. Developing. Doing things that are good for your soul. Staying healthy. Be impactful and live with purpose as we’re not promised tomorrow. Have a passion for personal freedom.
Investing
The multiplier. Getting into investing can be scary. I have worked in corporate finance my whole career and it is still difficult. I have decided to do a Master’s degree to advance my career but at the same to learn to invest. My focus will be on dividend investing to replace my income.
Emergency Fund
Build 6-12 months of expenses, keeping 6 of them liquid. This is foundational, and as such you want it to be robust, so that you do not get knocked off balance when a job loss happens or a pandemic comes around. Simply, this will allow you to sleep better at night.
Getting rid of Debt
All your debt. List down loan balances, interests rates, payment dates and minimums. Start attacking. This will be a slow crawl in most cases, as it was for me. But no matter what, stick to the plan, follow the list and stay persistent. Your future self will thank you! I include my mortgage in here as well.
The essence of
Financial Independence
The essence of Financial Independence is not really about getting rich, but about personal freedom. Liberating yourself to a point when you can live your life on your own terms, and follow what you desire to pursue and accomplish without any financial interest.