FI Steps - Almost FI

5 Step Plan to Financial Independence

Step 1: Financial Clean Up

Save 1K: Emergency Fund
This emergency fund will allow you some room between life and your plan. At this stage, paycheck to paycheck living might be a norm and creating this tiny, but yet crucial buffer is a necessity.

Pay Off All Consumer Debt
Who do you own money to and how much?
What are the interest rates, minimum payments?
Set an achievable goal to pay off each debt based on your income.

1 year of Living Expenses
Complete your Emergency Fund. Fortify your base towards FI.

Step 2: Know Your Numbers & Own Your Home

Know Your Numbers

What is your Cost of Living (CoL) expenses per month?
What is your savings rate?
What is your current net worth?
What is your asset retirement number?

Own Your Home – Pay Off Mortgage

Space to breath.

This should provide you the ability to either reduce your monthly cost of living (CoL) expenses by the amount of the mortgage or bring in some income if you choose to rent this first paid off mortgage at a later point.

Step 3: Side Hustle & Job Hacking

Jobs are frail and unreliable, they give the sense of false security – one day you are employee of the month, the next you are made redundant.
It is critical to have income aside from your main job.
This is probably the most important step in your FI journey.

Job Hacking is the notion of maximizing your hours at the work place. Do high quality work, efficiently and on time. Get involved in projects that enable you to learn new skills, refine your talents and leverage your interests. Do this while being strict on your office hours, take all your vacation days and recharge frequently. Know when and how to say ‘no’ at work, so that you and others respect your boundaries.

Step 4: Invest & Diversify Your Income

Define Your Investment Strategy

Teach yourself the fundamentals of investing. Just like learning to ride a bike, it might be painful to learn at first, but once you feel comfortable with it you will really appreciate the time invested.

Create New Income Streams

Purchase a rental house and/or continue to build your side hustle(s). Create an outlet that enables your development while simultaneously allowing you to capitalize on it. This income will propel the FI Strategy forward.

Step 5: Passion Missions

At this point your can literally quit your job.

Such a radical step at this point is likely not necessary – instead, you can decrease by one day or to 60%, enabling you to start a new business idea, travel, or just do something you always wanted to but never had the time. If you have reached this step, you’re almost FI.

Bonus: Get to FI

By now, many things have changed since Step 1. You would have had many different jobs, have tried many different business ideas, some, likely only a few succeeded while many times that amount have failed. Money would have been lost in the stock market, but more than likely it was all made back and more. Change of houses? Probably yes; maybe even countries or continents. There might be kids and pets in the picture, if there wasn’t at the start. Do you even still hold the same goals and values?

Despite many changes that will surely occur – one thing I am certain of is that there would be no regrets from going on The FI Journey. The FI Journey so far would have provided you options, opportunities, excitement, insights and the ability to learn many valuable lessons.

Where you choose to take this last 1% is absolutely up to your future self. I strongly encourage you to take the first action steps to go on your own FI journey – I guarantee you will not regret it and your future self will thank you.