Our Path to Financial Independence
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Why Financial Independence?
Before we go all into what my path to fiscal independence looks like, I should remind y'all of why I'm pursuing it in the first place. The all-time place to get for the full story is my "about us" page, but y'all should also bank check out "Passion Fire" for an in-depth look at why I'm trying to build this kind of life (and why you should likewise!).
Merely, the gist of information technology is that I am on a path to financial independence because I want to live life on my own terms. I don't want to exist tied to any job or employer. I don't want the stress of needing a job. Being stressed out at work sucks, and I don't want to bargain with that anymore.
How Do I Get to Financial Independence?
If you remember from our article on the Fire Fundamentals (and yous can read it hither if you don't!) I mentioned that there are four steps to getting on a path to burn down. Pace i is learning about Fire – I think I have that covered. Step 2 is deciding what yous volition be comfortable with. The third step is to make a plan for getting there, and the final step is to execute that plan.
How Much Money Do I Demand for Financial Independence?
Deciding how much coin you are going to need in early retirement is equally unproblematic as figuring out what you want to exercise when y'all are finally free. I've idea extremely hard virtually this decision, and you lot should too.
I know I want to travel, so lean burn probably isn't for me. Simply I also want to have a comfortable, secure traditional retirement (I admittedly don't want to exist in poverty when I am a senior!), so Declension fire is a must. I want to be financially independent equally shortly as possible, simply will probably need about 60K per year when I'k older to be comfortable. I'd be happy to piece of work odds and ends types of jobs, so I'd be totally comfy with a barista fire type of lifestyle, just I think I'd prefer to pursue my newly coined passion fire.
If that was a lot of Fire types to take in, don't worry – information technology can be confusing at first. Read this post on the different types of fiscal independence for a better thought of what might be right for yous.
How to Get There?
Sixty m dollars per year without working a full-fourth dimension job seems pretty daunting. I demand big gains and passive income! My first big gain came from selling my business firm in Los Angeles, and moving to a lower price of living state.
I got super lucky with real estate – and by getting lucky I mean I bought at a great time in a market that would only increase, and sold it nearly the top of the market. But that also meant I couldn't stay in the crazy expensive urban center of Los Angeles. I needed to observe a new city in gild to really capitalize on those real manor gains.
Executing the Program
The first pace to executing the plan was selling the house in a high COL area and moving to a low COL area. Washed! I packed up and moved from Los Angeles, CA to Savannah GA (and then to rural Pennsylvania, which is even cheaper! Georarbitrage for the win!). Adjacent, I used my new plant uppercase to gear up diversified investments and open an account with Vanguard. Third, I defended myself to working like crazy for these next three years to shore up my investments and ensure that I are 100% ready to take that plunge into early retirement.
Passive Income
You lot can't put all of your eggs into i (or even 2!) baskets though. Passive income is the real key, and then I needed to figure out a manner to generate income without working a traditional job. There are so many options for this, some of which I'yard dabbling in now, and some that I'm interested in exploring afterwards. The goal is to eventually make money blogging (I made 16 bucks my kickoff year, and then I'g getting in that location). There are tons of other creative pursuits that I'm going to explore besides. I'thou going to design t-shirts, write an due east-book, create art, brand jewelry to sell on Etsy, and that'southward merely the beginning. In that location are and then many options for creating income outside of a normal job. It may not be the traditional definition of financial independence, merely it will give you the opportunity to alive life on your own terms.
In addition to that, I also take my 401K account for boosted income when I accomplish retirement age, a pension, a Real Estate Investment Trust (REIT), and a few individual stock holdings. These dissimilar types of holdings should ensure that I am well diversified and should provide dividend income when I'm ready to finish working.
Not Your Plan
I know that non everyone owns a domicile in a loftier coast of living expanse. In addition, not all those who do will make huge gains by selling. Some people may even desire to stay in their high price of living areas. I know I did, I miss LA all the fourth dimension.
Only that's why my path to financial independence isn't exactly the same as your path. Don't worry, there are tons of other ways! Bank check out this pocket-size list of personal finance bloggers to see their paths to fire. You can have what you like from each and beginning your ain journey:
Other Paths to Burn down
Downsize your 2080'due south Path to Independence involves downsizing the amount of time spent working. Some paths are simply about finding that work/life balance! Check out how they do it hereastward!
50 Week Holiday is investing in both the stock market place and real manor to create brusk, medium and long-term greenbacks to reach FIRE. Read about their investment journeying here!
Saving Sherpa is perusing FIRE past putting experience over luxury, not having kids, and saving 70% of his income w/o side hustles. Read more than about his $26k/yr Boston lifestyle here!
Military Dollar is going to achieve Fire by taking advantage of the programs offered to members of the armed services. She's creating multiple streams of retirement income. Follow her journeying and acquire some additional awesome finance tips for service members here!
Tread Lightly Retire Early is going to reach Fire by living an eco-friendly life. She's cutting spending to maximize their savings rate while minimizing their carbon footprint. Observe out how they help the planet while gaining independence here!
What'southward Your Path to Financial Independence?
As you can meet, there are lots of unlike ways to get to financial freedom. There isn't a one size fits all approach. And these blogs I listed are just a pocket-size sample of the paths unlike folks are taking, there are thousands more than out in that location. Hopefully you volition get some ideas from these and other blogs about what will piece of work for you lot.
What does your path to Burn down include? Exercise any of these bloggers resonate with you? Is there a totally dissimilar path that I'm missing? Let me know in the comments!
Source: https://partnersinfire.com/blog/our-path-to-fire/
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