Financial Independence Goals
For most people, like me, financial independence (FI) is a journey that will make you question everything you’ve ever been taught about “how the world works”. FI will make you want to swim like a salmon going upstream. I’m not talking about living in a cardboard box or only showering the first Saturday of the month, I’m talking about challenging what the world tells you is normal. Challenge your way of life, the things that make you happy, the way you talk about money, the people in your life, and most importantly, challenge your goals.
Do you have goals? Do you have a plan to accomplish your goals? You can’t hope to achieve some arbitrary goal, you have to set goals, define a plan, develop a strategy, and follow through. A goal without a strategy is just a wish, and wishes won’t get you anywhere but the wishing well. I challenge you to list your top 3 goals right now. What do you want out of life? How are you going to get there? What wakes you up in the morning? What are you passionate about seeing happen in your life?
Financial Independence Goals
Goal setting on the brain? Good! Now we’re going to use those same mental exercises and apply them to financial goals. What are your top 3 financial goals? Do you want to:
- Take your family on that cruise in the Caribbean?
- Drive around in that brand new BMW?
- Pay off your student loans?
- Fully fund your kid’s college accounts?
- Pay off your house?
- Become financially independent?
- Never rely on credit cards to get you to your next paycheck?
- Build an orphanage in a third world country?
These are just some examples of goals, but each of you will have to make the decision for yourself and decide what you are willing to give up to achieve your goals. You will inevitably have to give up something to achieve your goal, if you didn’t have to give something up then you would already have achieved your goal. Just like when a person decides to lose weight, that goal will have to become so ingrained in their being so that when asked if they want dessert they have the will-power to say “no”.
My financial goals
One of my main financial goals is to become financially independent and be able to retire early. What does financial independence mean to me? Financial independence means that I have enough money in my investment portfolio that I am able to live entirely off of the growth, dividends and interest, following the 4 percent rule. Does that mean I never want to work again? No. Being financially independent doesn’t buy happiness. Financial independence provides me with options. That means I want the option to focus my time on engaging with family, volunteering, cooking, teaching, photography, real estate or other hobbies, whether or not they produce an income. It’s possible that my future hobbies may not generate a high income, but that is OK because I will be financially independent and will be doing something that I love.
Financial Independence Lighthouses
Whatever your financial independence goal is, I’m going to guide you through the financial independence map I have set for my family and I. Hopefully understanding my journey will encourage you to determine your goals and set attainable stepping stones to get you there. I call these steps “lighthouses”, because, like a ship that’s trying to come to shore, these lighthouses will guide you to financial independence and early retirement. Warning: If you want to keep doing what you’re doing and not interested in challenging your financial future, stop reading and go watch a movie or something. These steps will make you challenge your way of thinking about money.
These are my 6 Financial Independence Lighthouses:
- Reduce expenses
- Eliminate debt
- Increase savings rate
- Invest in low-cost funds
- Automate your life
- Focus on doing what you LOVE
These lighthouses have guided my family and I to determine what is truly important in our lives. Reducing our expenses helps to allocate our resources to activities that make us happy. Eliminating all of our debt, including our house, has helped us to increase our savings and investing rate and catapulted our financial success, making early retirement that much closer. Putting my families’ life on autopilot has saved countless hours, from paying our bills to feeding our dogs, we automate as much as possible. Why would I want to put my life on autopilot? Because spending less time on things I can automate means that I can spend more time after work focusing on doing what we love. One day we’ll be able to spend ALL of our time focused on doing what we LOVE! (Click here for an in-depth understanding of my lighthouses)
What are your financial goals? What is your reason for wanting to achieve financial independence? How are you going to get there?