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Are you familiar with the concept of Financial Independence (FI)? #529

Open kamranayub opened 5 years ago

kamranayub commented 5 years ago

Hey Kent! I've been deep in learning mode the past couple months after I randomly came across the concept and movement of Financial Independence. It's an old concept, around since the 70s, but for whatever reason I've never ran into it or recognized it, if I did.

Being financially independent just means that you've saved up enough money that working for the rest of your life is optional. The concept of "enough" is different for everyone but the rule of thumb is that once you've saved above 25x your annual expenses, you have reached FI and you can now choose to continue working or quit working for money and do what you love.

This concept is simple but it basically changed my life. It's a framework for a feeling I've had forever and a way to accomplish a ton of life goals we have for our family. I have been working on establishing passive income with a nebulous goal of "Do consulting or work independently" but this has provided the clarity I needed to understand my true goals. I never wanted to work 9-5 until traditional retirement age and this was the framework I was missing. Sure, I knew basic things like, always contribute your 401k match amount and more, and contribute to an IRA but that was the extent. I never realized the true power of those accounts or how to leverage them before/after retirement. And investing always scared me, probably because we've been taught it's scary and complex when the reality is much different.

There are a ton of resources and blogs in the community but here's where I'd start if I were you or your readers:

  1. Follow this listening guide for the ChooseFI podcast. Hands down this is the best personal finance podcast in existence, it's phenomenal and will teach you tons of stuff you didn't know about managing money.

  2. Purchase 2 hard copies of the book Your Money or Your Life. One for you and your SO. Read it together and answer the questions together. This is a life changing read.

  3. Read the book The Simple Path to Wealth and learn about index investing and how to do it easily. The content in the book is available free on the author's blog but the book packages it up succinctly.

  4. Check out the Mr. Money Mustache talk and his blog

  5. Share what you learned! This supercharged my life and it should resonate a lot with engineers and other people who do side gigs for passion projects. Imagine just having the freedom to do that, without worrying about money. It's insanely motivating.

Interested in your thoughts! It might be something you'll need to work through for a bit before reflecting on it.

qodesmith commented 5 years ago

@kamranayub I'm intrigued. Listening now.