The new Buzz Term is �Financial Independence� prompting people to evaluate their plans for retirement.� There are plenty of people who want to retire early by saving a bunch of money and then just living out the rest of...
The new Buzz Term is �Financial Independence� prompting people to evaluate their plans for retirement.� There are plenty of people who want to retire early by saving a bunch of money and then just living out the rest of their lives how they see fit.� As I am on this journey I had to stop and ask� Do I want to work less or retire? Where does Financial Independence play a part?
So far what I�ve seen and read about the whole FIRE (Financial Independence Retire Early) movement has been talks of Millennials working to save money, deciding to stop working, and just� live.� Then you have the older generation who think they are crazy, running numbers,� saying it won�t last, they are missing the point, etc.� Personally, I don�t think anyone is wrong.� They just have different approaches to how they will manage the rest of their time on earth.
Let�s unpack this.
Retirement
The average American will work from their teens all the way to their 50+ years.� At some point they are faced with a choice of continuing to work or retire if they can.� This has been the life schedule set by society from generational guidance to the educational system.� Let�s get clear on what retirement means
The action or fact of leaving one�s job and ceasing to work.
Nothing complex here.� The problem is most of us will continue to work even after retirement.� Some will have to do it because either the money saved ran out, lifestyle changes, increase in living expenses, they got bored, etc.� Then we just get �busy�.
By working hard up front to save money and retire early when you�ve reached a specific amount is what the FIRE movement is all about.� The problem is trying to estimate how much money is needed to live out the rest of your life.� Plenty of people have done some excellent analysis on numbers but no one truly knows how much it will take.� We just have strong ideas.
Work Less and Invest
Let�s talk about the approach of working less and invest.� I see Financial Independence differently from what I�ve been reading.� My thoughts are to work hard, invest, and then live off your investments.� That is Financial Independence in my mind.� I�m not talking about �saving for retirement� because I think that is a recipe for false hopes.� Once you retire with healthy savings, the rest of your time is spent on managing your lifestyle around the dollar.
Retirement doesn�t mean you do nothing.� Every retired person I know fills their days with some other time-consuming activity they have committed too.� Both of my parents are retired.� My mom tells me she feels busier now then when she was working.� Well, that doesn�t sound right.� Pops on the other hand �retired early�, ended up investing and managing his investments while �retired�.� Neither of them has to work for money, they just find themselves doing something OTHER than what they retired from.
After witnessing this, I came to realize that in order for me to retire early and STAY retired, I need to invest.� Not only invest but to create a system to automate my investments. This will allow me to work less and not worry about managing savings in the traditional sense.� Remember the goal here is to �live� as in, maximize my time.� The less time I spend working, the more time I can travel, spend quality time with my parents, raise a family and stay consistently active in their lives during �work hours�.
What Should I Invest In?
It should be clear by now that I am all about investing time and money.� These things are essential if you want to retire at any point regardless of your age.� Investing isn�t exclusive to money.� There should be a range of investments made in your lifetime and they should be consistent.� �Let�s talk about a few.
Invest In Yourself (education)
The best investment a person can ever make is in themselves or someone else.� Investing in your education, skills, happiness, etc. should be a lifelong activity.� No matter what age, language, culture, skin color, religious background, etc. a person should always invest in something, especially yourself.
If you�re not spending 5 hours per week learning, you�re being irresponsible � Bill Gates
When it comes to financial independence, consistently learning is key to maximizing your time and your investments.� I�m not saying you need to be super professional with all kinds of college degrees and all that.� I�m saying you should keep expanding your view of the world and stay open.� It will keep your life exciting and full of purpose.
Invest In Assets
My favorite asset is real estate and stocks/business that pays monthly, quarterly and/or annual dividends.� What I like about these is that if they are set up right, it will require little work to keep it rolling.� This is what I mean when I say �work less�.� How awesome would it be to only have to check in every so often to see how things are going?� Having an automated system of gathering returns on investments and managing risk is definitely an advantage to those who want to work less and retire.
Benefits of such a system will extend beyond your current lifespan too! Your children and or spouse can inherit this system and it will run with minimal involvement.� Additionally, it can last you through your later years without the stress of having to change your lifestyle because your savings are running low.� Certain assets will appreciate and have a better chance of sustaining pending changes in society like inflation.� Most importantly, anyone can be taught how to manage your system in case you are unable to for any reason.
Conclusion
Save your money and invest wisely.� If saving cash is a bit of a challenge, then invest in yourself so you can make better adjustments to earn and save more.� Again, investing in real estate is my favorite avenue.� A really GREAT resource is BiggerPockets.com.� I�ve learned a lot there.� Gaining extra income through stock trading is not bad either.� So what do you want to do?� Retire or simply work less?
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