15 Experts Chatting About Financial Independence

Work seems to have gotten a bad rap in PF blogs, as many are primarily focused on financial independence and early retirement. Is work really that bad? Has everyone caught the early retirement bug, or just a select few that have loud online voices?

To shed some light on this controversial topic, we decided to interview some excellent bloggers and ask them their views on financial independence, work, and everything in between.

We got a diverse set of responseswhich makes for a great read.

So check out what all 19 had to say about financial independence and share your views in the comments below.


Jacob from the Cash Cow Couple:

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 1. What does financial independence mean to you and how are you pursuing it?

Financial independence (FI) is achieved when your passive income streams cover all your living expenses. Most people include pensions, Social Security, portfolio income (stocks, bonds, etc), and things like rental income from real estate in the “passive” category.

It’s more about freedom than money. Ultimately, it’s freedom from the 9-5 constraints that plague most Americans.

We’re only halfheartedly pursuing FI right now. Neither of us are making as much money as possible, but we do have a high savings rate. Our savings rate will almost always be above 75% for the foreseeable future.

 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?

Even though I created this question, I don’t know the answer because it’s not possible to simultaneously experience both options. I’ve definitely chosen the latter in my current situation and I think it’s a more desirable path (assuming it’s actually possible to find a career that you love).

I’m currently in the middle of my PhD in financial planning/finance, getting paid much less than I could make elsewhere. But it’s a long term play. I should make a decent income when I graduate, and I’ll always have numerous employment options because I’m building human capital right now.

I was speaking to one of my professors a few days ago about this very subject. He’s a highly coveted speaker, writer, and consultant who makes good money outside of his academic position. He could leave academia at any time and find higher paid positions in industry, but is not interested in doing so. He told me that another pay increase is irrelevant. He already makes good money and can afford anything that interests him. When I asked about financial independence or early retirement, he chuckled and said something like this…

I love what I do, and I’d do the same things even if retired. Why would I give up my current income to continue reading, writing, and speaking from home?

For individuals like him (and hopefully me), financial independence almost becomes irrelevant.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

The common rule of thumb that you’ll hear repeated is the 4% rule. This rule is based on academic research from several years back which suggested that a portfolio could sustain a 4% withdrawal rate for 30 years time, without being depleted. So a $1 million portfolio could provide $40,000 of income each year (adjusted for inflation), for 30 years, without being completely depleted.

There are a couple of problems with this, but I’ll try to keep it brief. First of all, most of the people talking about the 4% rule on the internet are attempting to retire in their 30’s or 40’s. If someone is retiring at age 40, they should plan on their portfolio lasting 50+ years. The original research on the 4% rule was based on a 30 year retirement horizon. The portfolio would have been depleted many times with a 50+ year horizon, and the person would be forced back into work.

The second problem is the fact that many experts don’t expect equity (stock) returns to continue being close to 10% each year. Some think the equity premium is lowering, and that the stock market is overpriced with respect to company earnings. The result would either be a large correction (less likely, I think) or a period of lower returns moving forward (more likely).

If both of these facts are true (and they might not be), 4% is too optimistic when designing an early retirement portfolio. I’d feel much safer around a 3% withdrawal rate. The result is a rather large increase in required principle. Instead of $1 million, you now need roughly $1.33 million to support that same $40,000 of income.

(the math is easy, just multiply yearly expense by 25 to get required savings for 4%, or multiply by 33.33 to get required savings for a 3% withdrawal rate)

But herein also lies the beauty of frugality. If you can manage to live on roughly $10,000 as year like us, you only need $333,000 to call yourself financially independent. Even annual expenses of $20k per year only require $665,000.

Of course, living on $10k is shocking to some people, but I think somewhere between $10k and $20k is entirely doable in a low cost of living area, without a mortgage payment. Therefore at the current time, I’d consider us financially independent when we are mortgage free, and our investments reach $500,000.

4. What will you do after you are financially independent and free from the constraints of a job?

The same things that I do now, which is why I’d rather choose to work a fulfilling career over many years. I enjoy reading, writing, teaching, hanging out with my wife and family, and traveling. I also like being productive, and believe that some form of work is a very healthy thing.

If I do decide to “retire” from my first career, I’d like to sell used cars. I love buying and reselling in general, but used cars can have great margins and they are always in demand.

5. Any other relevant thoughts or advice on the topic?

Understand financial independence before pursuing it. I think many people get caught up in the sexy story of FI, but they don’t actually think it through. Sure, having a high savings rate is always recommended. That’s a good part of this blog. But socking away money is completely different than choosing a career based on earning potential alone, or waking up one day and deciding that it’s time to quit your job simply because you have enough assets to cover your living expenses.

Those are major life decisions, and in complete honesty, I don’t think it’s healthy for some people to stop working. They don’t have sufficient hobbies to fill the time and are left void of purpose. This is the dark side of financial independence and the reason that people should do a little soul searching before they make these huge decisions.

There isn’t any one size fits all approach to reaching financial independence, but there is a superior path. Figure out what brings you satisfaction and joy in life, then try to design a lifestyle around that. Work doesn’t have to be soul crushing. If your current position makes you miserable, save enough to take a year or two off, so that you can find a way to make money doing what you enjoy. It’s not all rainbows and butterflies, but I think it’s possible to find meaningful work and still achieve financial independence along the way.


James from Retirement Savvy

SavvyJames
 1. What does financial independence mean to you and how are you pursuing it?
I equate wealthy with financial independence; and I define wealthy as being able to live your  chosen lifestyle on passive (e.g. income from defined benefit plans , Social Security benefits, rental  property, etc.) income and portfolio income (e.g. defined contribution plans such as 401(k)s, IRAs,  etc.) and do not require earned (labor) income. Therefore, I am wealthy when I am financially  independent.
Currently, the savings/investment rate in my household – on an income of $190,000 – is 39%.  
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
I don’t know that it is necessarily a case of choosing one or the other. At least that has not been my experience. My experience is that most people end up in a profession or on a career path through circumstances, some factors within their control, others not.
My suggestion to  younger people, I’m 47, is to learn and/or receive formal education in two disciplines (my undergraduate degree is a dual major in business administration and communications technology and I also possess an MBA) and pursue a career that you believe you will enjoy. However, recognize that life has a way of throwing many curveballs, hence the suggestion for multiple disciplines. Don’t spend too many years chasing a dream job or career. It probably is not as great as you think it will be and you have to be careful not to waste too much time in the pursuit.
Most of us will end up in jobs that we are good at, or at least capable of performing moderately well, and will find sufficient pleasure in that job.  I believe most people will be much better served by just going with the flow with respect to which career path they end up on and spend much more energy in cultivating rewarding relationships and attaining personal finance literacy. They both will pay significantly better dividends than a career that you love.
I believe it is a lot better to be sufficiently satisfied with your career and have significant, deep-rooted relationships and financial independence. That way, when you do walk away from the career – which will happen at some point, either through choice or circumstances – you are in a position to enjoy the relationships and the comfort that comes with being wealthy.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
Our current projection is that at 60, our income from passive income (six sources) will exceed our expenses. Therefore, we really will not require portfolio income. However, we have established $1.5M as our portfolio goal. Individuals can only arrive at their number through detailed retirement planning. In fact – shameless plug ahead – my book, RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit, walks readers through the process, along with touching various personal finance concepts and practices.
A quick example, discounting inflation for the moment.  Assume a family decides that they want to retire in 20 years and have an annual income of $120,000. Assume, that like me, one spouse is retired from the military and is currently receiving a $20,000/yr. pension; which they project will be $25,000/yr. (COLA increases) in 20 years. Further assume the following factors: neither has a job with a defined benefit plan (traditional pension) and they project that their Social Security benefits will equal $35,000. That gives them a projected income of $60,000 from passive sources.
That leaves them with $60,000 they will need from portfolio income. How large does their portfolio need to be to support withdrawing $60,000 a year and not run out for ~ 30 years? We turn to the 4% rule. That 60,000 x 25 (or 60,000 / .04) gives us an answer of $1,500,000.
Assume they currently have $50,000 in various retirement accounts. The question then becomes, “how much do they need to save on a monthly basis (most of us operate financially on a monthly basis) to reach their goal?”
Turning to a good compound interest calculator – I like the one at MoneyChimp – let’s plug in some numbers:
Current Principal – $50,000
Years Until Retirement – 20
Annual Rate of Return – Let’s assume they are assuming 5%
Annual Contributions – $39,390
Result = $1,500,256.21
This family would need to contribute $3,282.50 (39,390 / 12) monthly to reach their goal. Of course, if they change any of the factors, everything changes. Running ahead of pace? Contribute less. Get much better rate of return for a few years? You can lessen the requirement going forward.  
4. What will you do after you are financially independent and free from the constraints of a job?
Travel, golf, travel, lift weights, travel, ride bike, travel, hike, volunteer….

Brian from Luke 14:28

My Picture

 1. What does financial independence mean to you and how are you pursuing it?
The term independent means to be “free from outside control; not depending on another’s authority.” In that regard, a person can’t be financially independent until they are completely free from the constraints of debt. Until all consumer debt, school loans, the mortgage and any other debts are retired a person is not technically independent, even if they have vast wealth. They are still beholden to another party and have obligations that require their money go in a certain direction.
Once those obligations are gone, the individual has total freedom to use their money in any way they desire. That is what my wife and I have found now that we have eliminated all our debts. Financial independence means the freedom to pursue anything you desire with money that is 100% yours.
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
The desire and capacity to work is something built into our nature as humans. There can be pleasure and fulfillment found in our work. For me, no amount of money would be worth the job that I dreaded going to each morning when the alarm clock sounded.
There is something to be said for the process of building money over time. Quick fixes don’t satisfy in the long run. The stack of money will taste sweeter and will be appreciated more through the effort of consistent and diligent work that a person loves and feels called to.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
I prefer not to use specific dollar amounts. Instead, I see it summed up this way: When the money a person has saved and invested makes more for them in a year than they make for themselves in a year at their job, they are financially independent. (The caveat being of course they have no outstanding debt as I said earlier.)
However, just because a person reaches this point doesn’t mean they should automatically stop working. There are other life situations to consider including years to formal retirement age, one’s health, lifestyle and future plans.
4. What will you do after you are financially independent and free from the constraints of a job?
My wife and I have really focused and worked hard over the past decade to budget properly, eliminate our debt and grow our investments. Part of that effort included my wife transitioning careers from high school math teacher to CPA. For her that dream career presented an opportunity to earn more and speed up the possibility of becoming financially independent.
The result of all these efforts is that, after 17 years of teaching high school students myself, I’ve been able to transition to stay at home dad and personal finance blogger. Because we have reached a level of financial independence, it allowed me, and us, to invest more time in the lives of our four kids.
5. Any other relevant thoughts or advice on the topic?
Only that financial independence isn’t the end-all to life. All the money in the world won’t cure the emotional or spiritual hurts present in our lives. Nor will it bring true happiness and contentment. Only God can meet those needs in a person’s life.

Dee from Color Me Frugalbutton125

1. What does financial independence mean to you and how are you pursuing it? 

To us, financial independence means being able to choose when and how we work.  We’d like to develop enough passive income streams so that we’d have the freedom to choose to quit our relatively well-paying but stressful jobs and pursue a less stressed out life.  We are aggressively saving and working hard to pay off our debt to achieve this goal.  We live on a small percentage of our income.  Currently we put about 15% of our post-tax income into savings, but right now a whopping 40% of our income is going toward our debt repayment because we want to be debt-free so badly (darn student loans!)  We also heavily contribute to retirement accounts.
2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?
Definitely the latter!  Life is just too short to spend a significant amount of time being miserable.  Like MasterCard always says, having a job you love is… truly priceless.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
Oh dang, this is a hard question!  To be honest, I’m not totally sure.  We tend to think more in terms of our passive income, and we would want, at a minimum, our basic expenses to be covered by passive income streams (right now we are working on rental properties and investment income among others).  But my hubby is extremely cautious by nature AND he really likes his work (not so much his current employer… but his work, yes).  So in truth I think that he will probably keep working long after we’ve technically achieved financial independence.  As for myself- I see being a stay-at-home mom in my future.
4. What will you do after you are financially independent and free from the constraints of a job?
Enjoy life!  And like I said, hubby will likely keep working at least part time.  We love travel, being outdoors, reading, writing (me), and I think that we’d love to have the luxury to spend ample time with our future children as they are growing up.
5. Any other relevant thoughts or advice on the topic?
Financial independence is a possibility!  I would encourage everyone out there to dream big.  If you want it, go after it.  But know that it will likely take years of dedication, planning, and hard work to achieve this goal.  In the end, we think it will be worth it.

New Gravatar 4 Hayley from A Disease Called Debt
 1. What does financial independence mean to you and how are you pursuing it? 
Financial independence to me means not having any debts including mortgage debt and being    able to pay my household bills easily through a reliable source of income.  At the moment, I’m    working on clearing my debts and then I’ll be focusing on saving money and creating different    income streams.
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
I have been in that place before where I was trapped in a job I hated, yet paid quite well. I wouldn’t recommend it! I think that if you can do something you are passionate about for a living, then there’s nothing wrong with working many more years. I’m not planning on being the kind of person that just gives up anyway even when I have reached financial independence.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
I haven’t really thought about this all that much before now, but I would think that I could stop working at this moment in time with a sum of £1million (around $1.6million) in the bank. I reached that figure because this amount would need to last me until the end of my life, I’m currently 33 years old. This lump sum would need to be invested safely in order to grow the amount and so that I could take an income from it.
4. What will you do after you are financially independent and free from the constraints of a job?
I guess I would find something I really enjoy doing and relax a little more! I would try to make life a bit better for my family and friends too. It would mean a lot to me to be able to help them out both financially and also by just being around more when they need me the most.

Laurie from The Frugal Farmer
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 1. What does financial independence mean to you and how are you pursuing it?
Financial independence to us means having the ability to make life decisions based on what is best for our family, with money not being a determining factor unless we want it to.  We are not yet pursuing FI, but working fervently on debt payoff.
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
That’s a tough question, but I think I’d rather work for a shorter term in a job that I hate and get it done quickly.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
We could retire right now on a million dollars.  We could easily take care of our family of six on $25k a year, and add in another 5k a year for fun stuff.  We could earn this in interest alone on a million dollars.
4. What will you do after you are financially independent and free from the constraints of a job?
When our debt is gone and we are FI, it will leave Rick free to stay at his job if he wants, or to quit.  He would love to have his “job” consist of what needs to be done on the farm here, even if it doesn’t bring in any income.
5. Any other relevant thoughts or advice on the topic?
If you really are interested in FI and having the freedom to do what you want to do, start NOW.  Don’t wait another minute.

Andrew Schrage, co-owner of Money Crashers

andrew-schrage-savings-headshot

 1. What does financial independence mean to you and how are you pursuing it?
To me, financial independence means being able to live a comfortable life (not extravagant) with the amount of money I have in savings. I am currently pursuing it by maxing out my Roth IRA each year (currently limited to $5500) and maxing out my contributions to my SEP IRA.
However, I am not of the belief that you should scrimp and save every penny during your working years in order to reach financial independence. I want to enjoy my working years as well. If I have to work a little longer to get there, I’ll do so.
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
I would much rather work at a job that I love and have to work longer to achieve financial independence. I’ve worked jobs in the past that I didn’t like and it really had a detrimental effect on other areas of my life. I would not recommend that.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
I don’t specify a specific amount because there are so many different circumstances that can change unexpectedly. I recommend simply trying to save the most and plan for emergency and unexpected expenses, and always be prepared to pay for healthcare expenses throughout your lifespan.
4. What will you do after you are financially independent and free from the constraints of a job?
I’d love to do some traveling, spend more time with my friends and family, and enjoy lots of low-cost entertainment activities for older folks.
5. Any other relevant thoughts or advice on the topic?
When determining how much you’ll need to achieve financial independence, do not take the word of online calculators sight unseen. I’d never advise someone to slow down on saving – essentially you can never have too much. Just be sure to inject a little common sense into things and think about your own personal situation (level of health, projected financial situation, and how you want to enjoy your post working years) to come up with a suitable goal.

Shannon from The Heavy Purseshannon_ryan_profile_pic2

 1. What does financial independence mean to you and how are you pursuing it?

Financial independence means being able to support the lifestyle I desire with total freedom of how I spend my time. We have a clearly defined plan as to the amount of money it will take, and an estimate as to when we should be financially independent. Most importantly, we have a plan on how to stay financially independent, regardless of market volatility and other risks, such as the cost of health issues or one of us dying prematurely.

 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
This is a tough one for me since I feel very fortunate that I love what I do. Of course, there are still “bad” days but most days I wake-up excited to go to work. Financial independence is enticing, but the physical and emotional cost of working a job you hate is high, so I would rather do work that I love and feel passionate about, even if it means working longer. And honestly, when you love what you do, it’s an easy choice.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
I’m not going to share the amount we need to have a fulfilling retirement, because too often I have seen people latch on to other people’s numbers as gospel. And it’s not. The only number that matters is your own. The best advice I can offer is do the work to figure out your own number. Identify when you want to retire or reach financial independence and how you want to spend your time. Don’t compare your numbers to others or worry when you see higher and lower numbers. Focus on your numbers and goals instead and review them regularly to track your progress.
4. What will you do after you are financially independent and free from the constraints of a job?
We will spend our time traveling and house swapping around the world to have quality time in some of our favorite places. We will also remain passionately involved in our community through volunteering, taking Yoga,and time with friends. Our girls and family will remain the highest priority.
5. Any other relevant thoughts or advice on the topic?
When I began working professionally, people expected to work until their 60’s and then retire. The idea of retiring in your 30’s and 40’s wasn’t even on the radar of most people. It’s an exciting time because it is a possibility these days. Of course, that does not mean it’s right for everyone. I’ve seen people on both sides be dismissive of one another, and there really is no wrong or right answer. You just need to figure out which one is right for you and your family, then take the necessary steps to make it a reality.

Derek from Life and My FinancesDerek - profile picture

1. What does financial independence mean to you and how are you pursuing it? 
For me, financial independence simply means doing what I want when I want. I don’t necessarily want to be laying on the beach or playing golf every day, but I wouldn’t mind having the option. I see myself helping others with their personal finance bouts and doing a fair amount of writing and speaking (again, on personal finance and my experiences).
So the big question is, “Where am I on my journey?” If you would have asked me this question last year, I would have told you that I was a long way off. But now that I only have $31,000 left to pay on my mortgage (and I plan to do away with all of that yet this year), I am suddenly sensing that I am closer than I previously suspected.
Once the mortgage is paid off, I will be able to quickly save up enough money (within a year or so) to buy a fixer-upper house with cash. I then plan to remodel it myself and rent it out. In the next year, I plan to do this all over again and rent out my second property. Within 5 years, I will own 6-7 properties, have no debt, and will have approximately $5,000 of passive monthly income. Along with my earnings from writing and speaking, this will be more than enough to support me, and will also allow me to continue investing in rental properties. By 34 years old, I will have no job and will have an income that is forever increasing.
2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?
I am a big fan of working for myself because I don’t enjoy answering to a boss that can tell me what to do at any given moment. I also hate the 8am-5pm workday. Why is it that our employers make us work the best hours of the day? This makes no sense, and just writing about this is making me angry, so I’d better stop. In short, I’d rather work a job I hated if it meant getting out of this rat race faster.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
Ever since I started writing about personal finance and had ideas to escape the typical working world, I thought it would be wise to build up a cash flow rather than a lump sum of money. This is why I am intrigued by real estate. I can invest my money in homes and earn an income for an indefinite amount of time. These houses will help me fight inflation and will earn me a consistent income (which just seems safer to me than to invest a large amount of money in the stock market). But, to answer your question, in order to provide myself with $5,000 per month in real estate earnings, I will need to own about $750,000 of properties.
4. What will you do after you are financially independent and free from the constraints of a job?
First, I would explore the U.S. with my Honda Civic and my tent. Then, after having explored every nook and cranny that I wanted to I would begin to explore Europe and possibly areas beyond that (India, China, Australia, etc.). Second, I would teach others how they can gain financial independence in a short time like I did. By being frugal, paying off all your debts, and investing wisely, they can be jobless and happy like I am (or you know, will be).
5. Any other relevant thoughts or advice on the topic?

Life is not about monstrous houses or expensive cars. These are just things and do not provide long-term happiness. Instead, live for relationships and experiences (preferably together). These will provide true happiness.


Jefferson from See Debt Runmobile-logo.png.pagespeed.ce.R3iNjdNLrJ

1. What does financial independence mean to you and how are you pursuing it? 

To me, financial independence come along with carrying zero consumer debt.  This means that you get to decide how you spend the money that you earn, and you aren’t paying interest (which is effectively money for nothing). 

This doesn’t mean that you can stop working, of course, and you may actually have to find new and better ways to earn income, depending on the lifestyle that you want to live.

We achieved debt zero last year, and it was like a giant weight off of our shoulders.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

Nobody should be wiling to stay in a job that they hate long term. This modern age that we live in is full of opportunities and possibilities, and you shouldn’t be willing to settle for something that makes you miserable.  

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

I don’t see myself “stopping working”until I reach my retirement age.  I enjoy pouring myself into projects, and really have no desire to stop. As for an amount, I would like to have a 1.5 million dollars set aside for retirement, to cover all health care costs and to allow for a buffer for travel and daily sushi. 🙂  
4. What will you do after you are financially independent and free from the constraints of a job?
Even if I “made it big”, I would likely dedicate myself to “working full time” to make the world a better place.
 
5. Any other relevant thoughts or advice on the topic?

As a general practice, I wouldn’t recommend that people set large arbitrary goals for themselves to reach at some point in the future.  These goals are far too abstract and progress is far too difficult to measure. Instead, focus on short term tangible wins, and building a better present state for yourself and your family.


Jessica from Mo’ Money Mo’ Housesmephoto2

 1. What does financial independence mean to you and how are you pursuing it? 

Financial independence to me means feeling comfortable and secure with your finances, and never waking up in the middle of the night because you think you forgot to pay a bill. Early retirement and working for yourself are great things to strive towards, but for me at the end of the day my main goal is to have plenty of retirement savings, own some property, and have enough in the bank to never worry about life’s unexpected expenses.

2. Would you rather quickly reach financial independence working a job that you hate or pursue a career that you love and work for many more years?

I’ve always been a true believer in doing what you love. I have of course worked plenty of jobs I didn’t love to pay the bills, but my ultimate goal has always been to work in my preferred career. That being said, if I did have a big debt weighing over my head I would probably put paying it off ahead of finding my dream job. Luckily I was able to pay of my student loan in 2009 and have successfully never been in debt since.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
Maybe 5 million from winning the lottery? Otherwise, I honestly never want to stop working. I really love what I do currently and I being unemployed has never been a desire for me.
4. What will you do after you are financially independent and free from the constraints of a job?
Even if I could afford to leave my current job, I probably wouldn’t. But thinking about retirement, I think I would still be pursuing some passion projects or hopefully working as a landlord on a number of properties I hope to own. Other than that, travelling is a big dream of mine. I would love to be able to travel for big chunks out of the year.
5. Any other relevant thoughts or advice on the topic?
I think financial independence is a great goal for everyone, but getting there and defining what that means is different to everyone. As long as you follow your own hopes and desires and don’t compare them to someone else’s, financial independence will be easier to achieve.

Gary from GajizmoGary Dek - Headshot
 1. What does financial independence mean to you and how are you pursuing it?
My financial independence would mean that I would not need to work to survive, and that I could be selective about the ventures, projects, or job opportunities I take on. While I look forward to financial freedom, achieving it would not mean a permanent vacation. I would simply move on to greater and more challenging objectives, some of which include social change. Anyone can get lucky and be successful once, but to repeat success in a variety of endeavors and industries encourages you to push your limits and talents. My savings rate fluctuates between 50% to 70%, but the focus is not on frugality. Instead, I concentrate on significantly growing my income and investments.
 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?
I would rather quickly reach financial independence working a job that I hate. Again, this ties in to my philosophy on financial freedom. As we all know, money doesn’t buy happiness, but the lack of money causes stress in people’s lives. By having the means to take care of life’s basic necessities, you afford yourself the time and energy to search and pursue the things that do bring you happiness. Additionally, having a larger capital base at my disposal early in life opens up more opportunities such as access to hedge funds, private equity funds, large-scale acquisitions, partnerships, venture capital, and/or a self-funded start-up. One of the reasons the rich grow richer is that, when you have money, people bring more business opportunities to you and you get a first-look.
3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?
$10 million – I like to play it safe. I absolutely love the lifestyle and weather in California, but affordability is not one of this state’s virtues. Furthermore, households with a net worth of less than $3M still need to worry about increasing healthcare costs (cancer treatments beyond insurance coverage can cost hundreds of thousands of dollars), education (in 25 years, a 4-year university will cost $100,000 to $250,000), and increasing living expenses. If I want to comfortably cover all these expenses and still have the cash to start a new business, diversify my investments, and help my entire family, I’d like to overshoot my needs to play it safe. In the words of Michelangelo, “Lord, grant that I might always desire more than I can accomplish.” Why not push your limits and see how much you can achieve in your lifetime?
4. What will you do after you are financially independent and free from the constraints of a job?
Take a year off to travel the world and explore my options. I’m not entirely sure what will come afterwards. I’ll let you know when I get there! =) However, I would recommend everyone do some soul searching. Too often in life, we are so busy with the everyday things that we put our heads down and power through just to get everything done. Many of us don’t have time for introspection and thought, and this is why I believe, every couple months, it is crucial to stop for a day or two and think about the direction of our lives. Am I happy? Do I make others happy? What do I really want out of life? Am I making a positive impact in the world? What are my other options? What can I do to improve, personally and professionally? Am I just surviving or am I really living? Another great quote, this time from Steve Jobs, perfectly explains my point: “For the past 33 years, I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.”

unnamedJon

 1. What does financial independence mean to you and how are you pursuing it?

This is a question that seems to be the hot topic for personal finance blogs. We would define financial independence as when you no longer NEED to exchange your time for money. I emphasize the word NEED because we think there is a real misconception about the definition of financial independence. Most people assume that unless you are crazy you retire and finish working for pay as soon as you possibly can. We have always been told you set a target number to reach and then once you reach it you shut down your working life. We plan to work for pay as long as we have passion for the work we are doing, even if we do not need the money.
We are pursuing financial independence by saving as much as we possibly can, and by cutting our regular expenses as much as possible. Currently we are saving 57% of our $3,800 monthly take home income (about $2166) toward retirement and other savings goals. We have also slashed our monthly living expenses to $1200 per month or 31% of our take home pay, we also value generosity and give away about 12% of our income or $456 per month. While these numbers might seem decentbwe are gearing up to do even more. At the end of July we are going to move from Oregon to New York. My wife recently accepted a job at a university where all of our living expenses including rent, utilities, and food are covered. This will allow us to increase our savings rate to 83%, give away 12% and live off a measly 5% of our income.

 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?

We would certainly rather work in a career that we love and work for longer to reach financial independence. We would also say at the same time that working in a low paying serving profession shouldn’t be your excuse to have to work into your 70’s. We don’t make a ton of money but we expect to retire early because of our intentional choices right now. Teachers, social workers, administrative assistants, and pastors don’t have to work forever.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

Our target number for financial independence would be $2,000,000 or 25 times $80,000, our annual desired income in retirement. We chose $80,000 because we would like to give away 50% of our income in retirement and we know we can live comfortably on $40,000 a year. 

4. What will you do after you are financially independent and free from the constraints of a job?

We have so many dreams about what we will do when we reach financial independence, in fact it is one of our favorite pastimes to dream together about this upcoming season of our life. We intend to travel to places we have visited before but need further exploration, especially in the Mediterranean. My wife loves southern France and I love Italy, and we have decided that one visit just isn’t enough so we plan to go back. We hope to be young enough in financial independence to include our kids in our international adventures. We also plan on volunteering like crazy with organizations we care about because we want to stay busy and because they deserve our help.

5. Any other relevant thoughts or advice on the topic?

 think the only additional advice we would offer is that no matter how little you make you can have a rich life. Financial independence isn’t only reached by those with a big salary, don’t let that be an excuse for you. 


moneyningDavid from Money Ning

1. What does financial independence mean to you and how are you pursuing it?

Financial independence just means to me that I can totally stop earning active income and still be able to live the lifestyle that I currently enjoy. Unlike many others who plan to quit their job, I plan to continue running MoneyNing.com. In other words, my life will be exactly the same before and after reaching financial independence. The benefit though is that I can feel even more relaxed knowing that my family will be okay no matter what happens with the income stream that comes from the site. To reach the goal, I’ve been saving a ton (think more than half of my take home income) for years.

 2. Would you rather quickly reach financial independence working a job that you  hate or pursue a career that you love and work for many more years?

It pains me to say this but if push comes to shove, I would rather be working in a job I hate because I can make up time once I reach financial freedom. Of course, I’m assuming that the job is bearable and that the pay is actually really good.

3. How much money would you need to stop working and call yourself financially independent? How did you arrive at that amount?

Expenses are ever changing but a good start is to shoot for 25x annual expenses, a rough guide based on the famous 4% rule. So a $1 million if your yearly expenses are $40,000, or $5 million if you need to spend $200,000 every year.

4. What will you do after you are financially independent and free from the constraints of a job?

Nothing different, because I’m already living the lifestyle I’m aiming for. Though significant, I see financial independence as just another step in the road, as opposed to the be all and end all that many people make it out to be. It helps that I’ve been thinking about reaching the milestone for years, and have been planning to get there through making many small steps.

5. Any other relevant thoughts or advice on the topic?

Reaching financial independence is a long term goal that requires patience, but the good news is that you can start reaping the benefits of a high savings rate even before you are completely free from financial struggles. Don’t see it as an all or nothing goal. Even little bit of savings will help you feel more relaxed in your every day money decisions, so don’t give up so easily!


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