Like many, I’ve been on a financial independence path for a few years now. Today I spent a few minutes on my small sun porch. It was a bit windy outside but sunny. It felt so good to see the grass getting greener and the trees about to bloom in this late spring evening. Moments like this remind me that we don’t need too much to be happy. It feels good to be happy and by default, we look for moments like this to never end. I then started to look around and I realized that I was sitting in a $10 foldable beach chair, some shoes tossed around, the floor had some dirt and the 2 strollers were leaning against the wall. Then the sun hid behind a big pine tree from the house across the street and the magic dissolved.
Happiness has become conditional to external factors. I quickly, in autopilot mode, started thinking about how to solve each of those “issues”. I’ll have to move to another house, a bigger house in the country so I can enjoy sunsets, or to buy a new shoe rack to keep those shoes out of view. Maybe build a bigger entryway closet to keep the strollers in there as well. Possibly pay cleaning services so my house is always tidy. Money here and money there.
Reality Check
Do we really need all that? I don’t. I want it, but I don’t really need it. Prioritization of my goals has been the key to achieving many of my targets. As we grow older and once we fulfill our basic needs of shelter, food and security; we realize that money is not the solution to our problems. We have clothes to wear, as long as they are clean and not thorned, there’s no difference between a $10 shirt vs a $500 one. I have a car, a house, a bed, clothes, a job, heating for the cold nights, A/C for the hot days, a fridge and pantry full of food and my family is healthy. That’s what matters.
Keeping up with the Joneses is a struggle for many. We see people taking fancy vacations, having expensive meals in 3 Michelin star restaurants, buying new trucks, summer cottages and the spending never ends. The reality is that it is ok. We are all humans and why should we judge? Be kind.
Happiness varies from person to person. We never know how life may turn and we’ll be in that position one day. That’s ok. Take one day at a time. What can you do today to reach your goal? What are your priorities? We can’t do it all. Do what is within your reach.
Retirement and financial independence are achievable for many middle income and determined individuals. De-ter-mined. If you are keeping up with the Joneses, it will most likely fail. So here is a very quick guide to starting your own path to FIRE:
Believe you can
If other people have done it, why can’t you? Start reading books about retirement, financial independence (FIRE) and investing.
Budget
Write it down! Your goal is to save as much as possible and live a happy life. Aim to save 50% of your net income, to start. If you have high-interest debt, like a car, student or credit card loans, focus on paying that off first.
Second, create an emergency fund to pay for 6 months of your expenses in case you lose your job. Lastly, save for your retirement. Why is that? High-interest debt is like a snowball, it gets bigger and bigger if you don’t pay it off. The emergency fund is to not touch your investments in case you need money in an unexpected situation.
Get a second job
Create alternate sources of income, 3 at least. Try new things and if doesn’t work, that’s ok. You’ll gain a new skill. Try something else.
Work smarter
Aim to increase your income every 2 years. Learn a new skill if required. Ask for a raise, another internal position on your current job or another company. Don’t get stuck. Your income will increase but your spending rate should not. Keep a simple and happy life and increase your savings.
Pay attention to your investments
Do your homework and find investments with high yields and long performance history, like US Index S&P 500. Find a company to hold your investments with the lowest commission and management fees.
Sharpen the saw
Keep nurturing your mind with information that strengthens your goal. Become a Mustachian.
When the road get rough, it is because you are making progress. You can do it, I know you can!
Love,
Alexis
