A Path to Financial Independence

Everything is connected to everything else.

It’s a warm summer morning and the air smells like flowers. The light pulls the color out of everything—the greens are greener; the pinks and blues from the hydrangea bushes are exploding, producing an almost psychedelic effect. The orange juice is sweet and full. My coffee rich. Today feels free, like those days when you were a kid with nothing but time to exist, explore, and be curious. I am writing this on a balcony with grape vines spilling over the sides. The sky clear. Air crisp. The sun warms my face. I’m staying at the Castel Fragsburg, tucked in the Dolomites in Northern Italy. I’m high above the road, looking down into the valley. The traffic is building on the highway below, as workers rush to their jobs on another Monday morning. This is all I wanted. As it turns out, success wasn’t about money, it was about peace. I feel calm, open, and alive. I have nowhere to be but here. Just a few years ago, a scene like this would have played out only in my dreams, but now it’s my life. Sure, money made it possible, but strangely enough, money is now one of the last things on my mind. When I was broke, money meant anxiety, stress, and missed opportunities. When I didn’t have any money, it was all I thought about. But a radical shift happened. The moment I had $10,000 in the bank and realized that I had escaped living paycheck to paycheck, the stress started to disappear. Then when I had $50,000 (a full year of expenses) saved, I started worrying less about money. The more money I made and each level of financial freedom I reached, the more in control I felt. More opportunities. Once I reached financial independence at thirty, I had more time and space. I felt free.

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You can have this freedom, too. As long as you have a decent middle-class income and live in a place with a reasonable cost of living and you can save 40 to 50 percent of your income, you should be able to hit your number in ten to fifteen years. If you really hit the accelerator, you might be able to do it in five years or less. If you live in an expensive place or make less than $25,000 per year, it could take you longer, but no matter where you live, the more money you make and save, the faster you can make work optional. I know you can make it happen. Once I reached financial independence at thirty and came up for air, I started searching for other people who’d also reached financial independence before the age of thirty-five. I was delighted to find a small but growing group of people I’m now happy to call my friends. Here are some of their stories and how they felt after reaching financial independence. Steve spent his twelve-year career working in IT at a job he just never really liked. But his aha moment came when he got married and realized how much money he and his wife, Courtney, could save with two incomes. After getting married, they committed to saving 70 percent of their incomes, simply so they could have more options in life and do what made them happy—which was traveling around the country in their Airstream camper, taking life as it comes. Once they increased their savings rate and automated most of their investments, their net worth grew quickly. When they hit their goal of $890,000 at age thirty-five, they both walked away with the plan to live on $25,000 to $30,000 for the rest of their lives. Less than a year later, because they are able to live off less than their investment growth, their net worth is now over $1 million (and growing). To Steve, financial independence means the freedom to say no and not to have to make decisions because of money. “Instead, I can think free and clear and make choices that directly affect my happiness rather than my pocketbook. I wouldn’t trade this kind of freedom for all the money in the world. After all, we tend to remember the happiness we experienced, rather than the money we earned or things we owned, at the end of our lives. Happiness and freedom are the keys to life, and money is nothing more than the means to get there.” Steve now blogs about his life after working at thinksaveretire.com. Michelle used to work as a financial analyst but quit in 2013 to become a full-time blogger after two years of blogging at makingsenseofcents.com. After making a bit of money blogging and paying off her student loans early, she realized she could reach financial independence by increasing her savings rate (which at its peak was 90 percent) and earning enough income from her blog to cover her monthly living expenses. Michelle also realized she didn’t need to spend a lot of money to be happy. “Many people think they need a huge house, car payments, and more in order to be happy in life, but that’s just not the case,” she said. Michelle reached financial independence at the age of twenty-eight after making over $1.5 million through her blog. Even though she never put her number in stone, she knows she has enough money because her investment gains easily cover the amount of money she spends each month and she has no plans to retire. Michelle really loves what she does: “Life is great, I work less than ten hours a week, and I can do what I love most—travel full time with my husband and our two dogs.” Anita used to suffer from depression, which has subsided now that she no longer has to work seventy hours a week and can flow with the rhythms of a much less stressful life. Her first job out of college, she worked in insurance making between $40,000 and $55,000 per year, but she eventually realized she would need to make more money if she wanted to make work optional as quickly as possible. So Anita went to law school and took out $100,000 in student loans with the goal of getting a really high-paying job so she could save a lot of money. Shortly after graduating from law school, she landed a job at a big law firm as a corporate attorney specializing in mergers and acquisitions. During her five years she made between $160,000 and $310,000 and saved about 85 percent of her salary by living in a modest apartment and only buying stuff used. She paid off her low-interest student loans in her first year of working. Anita hit her number at thirty-three and walked away from her high-paying legal career shortly after. Her coworkers and boss just couldn’t believe she was actually walking away, but that was her plan all along. “To have control of your time and your life goes such a long way. If you are living the life you design, how can you not be happy?” Anita also blogs about her adventurous life at thepowerofthrift.com. Justin worked as a civil engineer for ten years in Raleigh, North Carolina, with a starting salary of $48,000 in 2004 and an ending salary of $69,000 in 2013. After getting his job in college, Justin ended up with extra money at the end of the month, so he started investing it. He then ran the numbers and realized he would have enough money to live off for the rest of his life long before he turned sixty-five. While Justin and his wife never had a target savings rate, they just tried to live a frugal life and save the rest. Their savings rate ended up fluctuating between 50 and 70 percent most years. While their original goal was to save $2.5 million, the longer they saved, the less they realized they needed, and eventually settled on between $1.3 million and $1.4 million as their goal. At the age of thirty three, Justin was let go from his job, but after running the numbers he realized he never had to work again. “I still get a smile on my face every time I think about how fortunate I am to be in this position. It’s eleven A.M. in the middle of the week and I’m lying in the hammock reading a book—every day if I want. That makes me happy.” Justin blogs about his life and money at rootofgood.com. Kristy and Bryce worked in IT in Canada and were able to save a ton of money quickly by not buying into the idea of needing to own a home. They just really wanted to get out of the corporate world. Back when they were working, they felt like every day was a grind, and all they could think about was hoarding money so they could get out. They said they spent all of their time surviving, just keeping their heads above water; they didn’t have time to think about anything else. Their savings grew quickly and they reached financial independence at thirty-one and thirty-two, with a little over $1 million saved. Now that they are financially independent, “when we wake up in the morning, we think about what can we do to help the world rather than what can we can do to help ourselves.” This means spending their time giving back, including volunteering for We Need Diverse Books, a nonprofit dedicated to bringing diversity to children’s books, and teaching people about investing on their blog, millennial-revolution.com. J. P. retired at the age of twenty-eight with over $2 million after making a ton of money working in financial services. While she has always wanted to be a writer and was a liberal arts major in college, after an on-campus interview with a financial services company, she realized she could use her job as a means to retire as quickly as possible. She didn’t buy into the hype that just because you make more money, you need to spend more. By keeping her expenses as low as possible in New York, which included living in a 300-square-foot apartment, J. P. saved at least 80 percent of her income and walked away in five years. Now she spends her time writing, walking her dog, hanging with her family, and blogging at themoneyhabit.org. Brandon worked in web development and focused on saving as much money as possible as soon as he got his first job. During a ten-year period he was able to get 15 to 25 percent salary raises from each company and the opportunity to work remotely. Brandon and his wife, Jill, keep their living expenses low, and while it took them some time to figure out the exact spending level that made them happy, they realized it was somewhere between $38,000 and $45,000 per year. By focusing on investing in tax-advantaged accounts, they were able to keep their taxes as low as possible, save more money, and reach financial independence at the age of thirty-two. Having lived in both Europe and the United States, Brandon believes the United States is the “perfect place for financial independence to happen as quickly as possible” due to higher wages, the opportunity to control your expenses, and all of the tax loopholes you can find. Now Brandon spends his time making music and teaching others how to optimize their finances on his blog, madfientist .com, and Jill continues working because she loves her job. “I was out late the other night and I was, like, I’m going to be really tired in the morning. Then I remembered there’s nothing on my schedule that needs to get done. Even though I want to be productive every day, I don’t have to be. It’s just an amazing feeling to know that my day is my own. I recommend it to anyone. It’s totally worth any sacrifice it takes to get there,” said Brandon. Money has the potential to change your life. To give you more opportunities. To allow you to help your family, your community, and the causes you care about. Money is a reflection of who you are. How you save, and invest what you buy, and the charities your support are all a reflection of you. How you spend your money is how you value the world. Money is a way we can turn what’s inside us and around us into power to make a difference in the world. One of the most profound lessons I’ve learned about money is you can either control it or let it control you. If you let it stress you out, if you make it your god, it wins. But when you are conscious of money’s power and know how it works, you can win. Mastering money is about mastering yourself. We all have emotions about money, but the more you talk about money and spend just a few minutes on it each day, the more aware and mindful you’ll become and the easier it will be to understand and control. Money is no longer some abstract confusing thing that you want; it’s something you have and know how to get. Once you know how money works, you can let it go and come to it on your own terms. Instead of a worry, it becomes an opportunity. As you start saving and making more money, other changes will start happening in your life. You will worry less, feel more in control, and have more opportunities. As you master money, you gain freedom through it. But remember, money is not the goal, time is. Time to do what brings you joy. Time to spend time with those you love. Time to take care of yourself. Time to live the life you want. Whether it takes you five years or twenty years to hit your number, you might be a very different person by the time you get there. So don’t put your dreams on hold for the vague promise of retirement. Don’t be afraid to change. Search for meaning. Let yourself grow. Family and friends are more important than money. Money doesn’t matter if you don’t have anyone to enjoy it with. Spend time with your kids, siblings, parents, grandparents, and friends. Health is more important than money. Try not to burn yourself out. Take time to recover and recharge. No matter how hard you hustle, remember that a pendulum swings both ways. You need to chill as hard as you hustle. I encourage you to think hard about what you want in life and how much money it will actually take to get it. Be honest with yourself about how much you actually need. Define what success means to you. Live your own life, not the one your neighbor or your coworker or the people on social media are living. Too many people get caught up in living a life they feel like they need to live, the life others think they should live. But it’s your life, not theirs. It’s your time, not theirs. We all get only one life, so live your own. You don’t need a nice car or a big house to live an insanely amazing life; in fact, you don’t even need a house or car at all. Don’t be one of those people who look back on their lives and wish they had been their true selves. The world needs you to be you. The systems and jobs that our parents relied on are falling apart. But this is a new path. If you truly commit to the strategy in this book, you will master the capacity to make money and do it on your own terms. Life, like investing, is about taking calculated risks. It’s easy to sit back and play it safe. It’s wired into our DNA: don’t touch the fire, don’t peek over that cliff. Fear keeps us safe, it keeps us alive. But it also keeps us from truly living, from growing, and from getting ahead. The more money you have, the more risks you can take. When you take risks, it will lead to bigger opportunities, experiences, stories, and a richer life. Another thing I’ve learned about life and money the past few years—the more calculated risks you take, the happier you’ll become. Find ways around the fire and over the cliff. Whether it’s asking for a raise, starting a new side hustle, pushing your savings rate to 50 percent, quitting your job to pursue a better opportunity—whatever it is, taking calculated risks will fast-track your financial freedom. Keep testing and optimizing. Don’t be afraid to recalibrate. Life is about learning, balancing, adapting, spending and saving, risk and reward. The strategies you’ve learned work. Put them into practice and keep at it. And help others. Talk about money. Share your stories. Be open. Be kind. We are all on the same journey around the sun. Now stop and take a deep breath. Look around you. Take in the moment. The light. The sounds. The people. And be grateful for what you do have—it’s already so much more than most people have. The median income globally is only $1,225 a year. If you make $34,000 per year, you are in the top 1 percent of the entire world. Financial independence is about having the freedom to do whatever you want. You can have it. Making a lot of money quickly is possible. Having more time is possible. Living life on your own terms is possible. You have a unique opportunity that many don’t. You really can have all the money you’ll ever need.

[ Thank you for spending your precious time with me. I wish you much luck, money, freedom, and happiness. ]