They say if you can save 25 times annual expenses that you can retire so lets play a fun game of thinking in terms of 25 times saving goals. Below is a fun list to get you to think differently about money. I believe we all have the opportunity to win with personal finance and it merely begins with choices. The choice to save 25X expenses is very difficult and I wont sugar coat it. But with every passing day and year, you can get a bit closer. See below for the 6 creative ways to save and eventually replace income.
Did you know that boring investing is probably the best way to invest money? Slow and steady aka long term consistent investing has been proven to realize the best year over year returns. In contrast, people who time the market, buy and sell, look for the hot stock, generally earn 7% less than those who do boring investing like investing in index funds. That is why I say boring investing is the way to go, because it allows a stress free money life. Boring investing is a set it and forget it, with proper allocation long term strategy.
In a recent study done by fidelity’s 401K division, the accounts that performed the best over a span of a decade were the accounts of clients who passed away or forget about the accounts. Just let that sink in my readers. If you don’t touch your investments, move them, time them, guess what you will grow them.
I must admit I am guilty of trying to outsmart the markets too, as in the past I bought and sold funds, based on trying to own the fund with highest paying dividend amounts. If 1 fund paid more than the other fund, I would be pissed that I lost out on the opportunity to get more dividend income. I know for a fact I missed out on a lot of gains because I tried this foolish game of timing funds and would divert some money to go places that didn’t serve me best as far as capital appreciation goes.
Now going forward I am going to do more of the boring investing and instead will just increase the total investing contributions year after year until I can retire. Who wins the race at the end of the tortoise and the hare story?
You guessed it the slow and steady tortoise because that’s usually how it goes as you keep a steady pace. If you rush rush rush out the gate, you will feel burnt out and you might fall short. The markets are no different, and I think that story is a classic example of stock market newbies, who think about get rich quick schemes that rarely work.
Once you understand that being unconventional in how you handle finances will bring you a sense of freedom, it will all fall into place. I believe there are two sides to personal finance, the consumer mindset, where you feel no control over money, and the unconventional side of finance. Where you direct your money to go places, and feel more at ease. This is where the unconventional wisdom behind early financial independence comes into play.
It takes either a drastic switch of lifestyle to mature into this new mindset, or it can just happen once you realize that spending excessively doesn’t make you happier. Some people feel that unconventional financial management is a deprivation of some sort, or a lacking of having fun. But in reality it is the opposite. Yes I tend to save a lot for the future, but it is done with purpose and that is what makes me happy. Hidden in our lives is a natural state of satisfaction with knowing that freedom is right around the corner.
Hey Guys do you really want to work till your 80 years of age? I am speaking for myself when I say heck no, granted I will always do something as I age. But I foresee I’ll focus on working for myself as I age, and not for others. If people want or desire to work that long for others, it must be something they truly enjoy which equates to happiness. I provided an article below that states very convincing evidence, why those people like working so much and will continue way past their 70’s. Working till your 80 years of age is this the new Norm?
To me it seems like they don’t have enough hobbies to pass the time. If they really enjoyed working for their organizations and it wasn’t about the pay, would they do it for free? That is the million dollar question that was mistakenly not asked by the interviewees in the article below. It seems sad that one of them is working so much that she regrets not spending enough time with her grandchildren. Now that is a travesty for her and the bonding time her grandchild might need today. This is a judgment free zone, but she is clearly showing signs of regretting her work / life balance. If I could say anything to her I would say work part time, and go spend some time showing those kiddies some grandma fun filled activities.
I like to write posts based on my current experiences in life and this one happens to be a very unusual topic I rarely discuss here.(Haha) The topic today is retirement and we will dive in to share a bit about the sad state of retirement and what I mean by this.
The other day I had to take a half day off from work to go to a doctors appointment. I was done a bit early so I decided to go to the mall, primarily Marshall’s within the mall, to get a new pair of all-purpose athletic shorts for the summer. As I am walking through the hallway inside the local outlet mall, I see a row of chairs along the wall, each one filled with random people. Each and every person was just staring aimlessly at other people walking or either looking at a Cell Phone. The reason this struck me as being the sad state of retirement, almost 90% of the people looked depressed or just passing the time.
Well you guessed it, as I am talking about reaching financial independence once again. I am posing this question today, will you achieve financial independence before age 65? Well the jig is up and there’s a ton of examples online of people who actually reached the imaginary Financial Independence before getting grey hair.
This is my goal and it should be everyone’s lifetime goal also, because long gone are the days people worked for 40 years dedicated to a job who can easily replace any of us with the next person. Granted I am not telling you to stop working forever, I am just advising you that you can work on your terms when you reach this next stage of life. What a fun stage it can be, don’t you agree?
Below is the list of bloggers who already reached Financial Independence.
Hey imagine you received a windfall of lifetime earnings at once? Would you treat this windfall differently? Do you know how much income, side hustle, illegal activity you’ve made in your lifetime? If you already have 5 years of working history under your belt after college, and made on average at least 50K-55K annually how much is that amount. For those of you who are not too good at math it is 250-275K thousand dollars. Now back to the first question asked, imagine you received all of that money at once?
After reading the title above can you grasp what it means to live a life after you have reached the financial pinnacle? Well in all honesty many people might not even comprehend how a life like that might feel, because we have been slowly institutionalized to a system that is ingrained in our psyche. The people who have the complainly pants syndrome as other blogs have mentioned, are partly to blame for their financial shortcomings, but what if they are merely victims to the system. A system set up to keep you indebted and to keep you plugged into working for 45 years of your life. Can you still reach the financial pinnacle if you live in a society where everyone wants a piece of your finances?