Financial independence, commonly referred to as FI, is a term meaning you are able to live off of the money you have accumulated for an indefinite period of time without having to earn a single dollar in the future. This in itself is not a revolutionary idea. Ideally all retirees are financially independent, however with many relying heavily on social security and other benefits this is not always the case. The differentiator at Get Money, Got Money is not simply becoming financially independent, but doing so as quickly as possible.
Imagine a world where you went to school longer than you needed to work in order to sustain yourself for the rest of your life. If you’re lucky enough to live in a country as flush with money as the United States, then congratulations! Only having to work 5-10 years is a possibility now more than ever, depending on what you do with your money. By telling my story along the way I hope to share what I’m doing right but probably more often, you’ll hear of the mistakes I make along the way. But just to get you to believe this is even possible, I’d like to recommend visiting a few bloggers who have achieved FI and have done so in amazing ways. Their links will be at the bottom of the post.
So, you may be asking yourself why should I give a shit about financial independence? Great question! As I began to outline in my first post, reaching FI has a virtually unlimited number of benefits. If you hate your job, guess what? You can quit! If you love your job, guess what? You get to keep working! Except now you can do it for yourself without being tied to each paycheck. Want to take some extra time off if you keep working? You can now afford to do that. Becoming financially independent is less about becoming rich and more about becoming free. And if you can reach it while you’re in your 30’s you have decades to take risks and opportunities that would have never presented themselves to you otherwise.
So what’s the magic number? When can I say I’m financially independent? Well, that depends on you. Do you have a family of six and like to go to Breckenridge and drive a Mercedes? Your number might be $2,000,000+. Are you single and want to live in a cabin in the woods for the rest of your life? Your number could be somewhere around $250,000. The key factor to determining how much money you need to reach FI depends almost entirely on what you spend annually. Then, multiply those costs by 25-30x, depending on how conservative you want to be, and there you have it. For example, as a single guy who doesn’t like to spend much on anything my costs are going to be low. I know I would be living a life of luxury on $20,000 a year, so I’ve set my goal at $500,000 for the time being. The beauty of this number is that I’m in no way tied to it. If I were to get married, have some kids, and want to be able to support them that number may increase. But for now, I have a starting point that I can adjust accordingly along the way. In future posts, I plan to discuss where I’m currently at financially and how I plan on getting to that magic number.
As promised, want to see some others who have already done it? Check out the links below.