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The Guide to Financial Freedom
Old 08-21-2018, 04:45 AM   #1
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The Guide to Financial Freedom

There’s no doubt about it Ive been blessed with good fortune when it comes to achieving FI but we did our part too (saving and thrifty living). Sadly things shave changed over the last few years as corporations are giving less and less - the burden of funding retirement has shifted almost completely to the individual and there is a ample evidence too few are taking up the challenge.

Ive taken a stab at writing my list on achieving FI - It’s rough and If you have a minute I’d appreciate your thoughtful input (most of all be kind ).

1) Save first, save automatically just save.
2) Brown bagging it sets the tone for life’s financial decisions
3) Debt like credit cards and the like are the enemy to be vanquished as soon as possible
4) Stuff is an ally of Debt and equally as dangerous.
5) Never leave money on the table
6)Spend a small portion of windfalls if you must (tax returns, 7)overtime, etc) and save the rest.
8)Put Starbucks and the like out of business.
9)Become a YouTube plumber, carpenter and general handyman and never pay for what you can do yourself
10)Always Buy less than you can afford.
11)Education is everything whatever type- (I particularly like technology)

Oh if you’ve had an Ah Hah moment in your financial life that you remember and like to share that as well that would be great.
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Old 08-21-2018, 04:51 AM   #2
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If you aren't making money, you are spending money. Most of my life I have had at least one additional source of income besides my primary job.
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Old 08-21-2018, 04:52 AM   #3
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12. You don't owe your children a living. Only a decent upbringing and a start in life.
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Old 08-21-2018, 05:02 AM   #4
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I like your list, because it's focused on reducing expenses rather than generating income. That's always been my preferred way of doing it.

I would add that it's important not to just save, but to invest. That may be obvious to you, but it took me a while to catch on. I saved pretty well, but it was years before I figured out that just socking money away in a savings account wasn't smart.
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Old 08-21-2018, 05:03 AM   #5
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No. 11: Education is very important. Discipline and mindfulness are everything.

No. 3: Unpaid Credit card balances are the enemy, not credit cards themselves. Used with discipline, credit cards can be a great convenience. Look for a card that is widely accepted, has no annual fee, and offers cash rewards. Determine what you can easily pay off each month, and never charge more than that amount.

No. 12: Be mindful of current and upcoming expenses, and track daily expenditures.
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Old 08-21-2018, 05:17 AM   #6
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12. Marry a very rich woman/guy and skip steps 1-11.
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Old 08-21-2018, 05:32 AM   #7
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As my signature line suggests, the biggest reason I was able to ER 10 years ago at age 45 is being childfree. It has also made my life a lot simpler.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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Old 08-21-2018, 05:48 AM   #8
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I know this will raise lots of "bahs!" from others on this forum, but I would add : "Obtain expert help where and when you need it... but ask a lot of questions before following that advice."

With me working six days a week (at two jobs) and doing the various activities of life and family, there is no way I had the time to become and be an expert at investing. (Nor did I want to be.) I still thank my investment advisor for his help over the past 20+ years. I just consulted an accounting firm to determine the tax challenges of where I am today and will be at age 70 1/2. No way do I know all the ins and outs of what the tax guy called "the "gears and levers" of retirement: the most reasonable age for me to take SS, how to manage my portfolio to reduce SS taxes, maintain my nest egg value while minimizing RMD etc. The consultation was worth the cost.

I love what the tax expert said: "Unless reincarnation is true, you only get one retirement!" At least in my case, I wasn't convinced I would get everything right that first time all on my own.
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Old 08-21-2018, 06:09 AM   #9
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now i avoided all this pre-meditated planning

but out-lived enough family to end up with an inheritance ( arguably two estates unless i resort to selling stuff , which might make it 6 estates in reality ) so no guarantee of a pension in later life

now i was bought up by a frugal family ( not Amish but converting to them wouldn't be a major culture shock .. except for the working hours )

so many tips were never a problem ( credits cards , expenditure and general debt )

second income :- most of my employment left room from a second ( legal ) income , which i just naturally saw as opportunity .

i rate intelligence more important than education , you can always learn the desired skills once you understand which skills are useful ( to you ) or if you really have to , hire those skills as needed .

i would also suggest invest rather than save , but to make that work you NEED to learn a lot about investing ( not just rely on others , for advice )

from personal experience having a full health check at least 10 years away from your desired retirement date gives you a much view of the path ahead ( i didn't and the current progress is very exciting ) ( maybe a health check 5 years out might be overkill and maybe not ).

** Used with discipline, credit cards can be a great convenience. Look for a card that is widely accepted, has no annual fee, and offers cash rewards. Determine what you can easily pay off each month, and never charge more than that amount. **

not for me either i pay up front or lay-by ( wanting , but not having makes me pay the full price quicker )

also the financial gymnastics needed is brain power i can put to better use , elsewhere
there are a few other reasons as well . i might be paranoid but our government gives me plenty of admonition on that front to compel me NOT seek a cure .

( i was way ahead of the Snowden leaks by maybe 15 years or so , i just didn't work for the military )

i think the sweet spot is between reducing expenditure ( as a frugal person not a mega improvement , for me ) and taking income opportunities ( and i don't mean smuggling )
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Old 08-21-2018, 06:17 AM   #10
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As my signature line suggests, the biggest reason I was able to ER 10 years ago at age 45 is being childfree. It has also made my life a lot simpler.
i was born with a charisma by-pass , children were not really an issue ,

the upside is my distant relatives are addicted to litigation , and having no children should have me curled up in the grave laughing hysterically for at least a decade ( no point having a will they will fight over everything anyway )
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Old 08-21-2018, 06:25 AM   #11
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Ive taken a stab at writing my list on achieving FI - It’s rough and If you have a minute I’d appreciate your thoughtful input (most of all be kind ).
If that list works for you, then great.

For me, the list is far too absolute. Debt can be a useful tool when used wisely. And sometimes leaving money on the table is appropriate (this is an early retirement forum after all).

We each need to find our own path. And fortunately there are many paths to success.

For me, an "everything in moderation" approach has worked out well. If you live a good life now and in retirement, you'll always be happy.
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Old 08-21-2018, 06:27 AM   #12
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Be fortunate enough to find a mate that feels the same way about saving and retirement. If one is pulling the cart with the brakes set, it doesn't go far. A great body is fine, but a great mind is much better!!!
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Old 08-21-2018, 06:29 AM   #13
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It is entirely possible to marry someone with both In fact, smart people generally take good care of their bodies too!

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A great body is fine, but a great mind is much better!!!
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Old 08-21-2018, 07:24 AM   #14
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It is entirely possible to marry someone with both In fact, smart people generally take good care of their bodies too!
Touche'

Agreed!
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Old 08-21-2018, 07:52 AM   #15
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This is good practice and something similar to what I published some time ago when we retired. I wrote them initially for Money Magazine when I was featured. (I think a few others here were too).

I call them my 10 rules..... as it was a catchy title.

10 Rules to Retiring Early
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Old 08-21-2018, 08:10 AM   #16
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One of the keys for us has been contentment. When you are content with your life, you don't have the need to fill a void with stuff or trying to keep up with the Jones lifestyle. It's a version of LBYM, but being happy and satisfied with what you have.
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Old 08-21-2018, 08:18 AM   #17
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#10--did that once and it hurt. Had a house built, kept adding extras and more extras. We were young and super stretched on our mortgage. (negative amortization so the payment went up). Bought way more than we could afford (but of course the bank made sure they found us a loan because we had great credit). I never wanted to live like that again. Did it for two years until we were transferred and got out of it.

But I should have known. My parents paid off their house in 3-4 years in the 60s and drilled similar things into me. So maybe it was a good "lesson learned."

I also had it continually drilled into me while working part time while in school in my early 20's. (early 80s) Worked for a tiny company and their "mantra'--seven words--pay yourself first live below your means. So I should have said NO to the crappy mortgage.

Oh and on that job I was making $5-$6 per hour, got paid every two weeks. Every paycheck first thing went to the bank and put $80 into savings.

That crappy mortgage was such a stupid move on my part and it still bugs me.
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Old 08-21-2018, 08:46 AM   #18
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Become a YouTube plumber, carpenter and general handyman and never pay for what you can do yourself
That's one of the biggest reasons we are where we are financially. We did everything ourselves, even before YouTube videos were around. We fixed our own cars, built our own furniture, and even built our own house.

I quit my job when our daughter was born to be a Mr. Mom. At the time, the cost of day care was nearly as much as I was earning at my job, so it was a no-brainer (if not a bit unconventional 30 years ago). Having more time at home meant I could take care of more things myself, which meant we didn't have to pay others to do them. Win-win situation.

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There’s no doubt about it Ive been blessed with good fortune
Yep, same here. We were lucky to buy our two acre property for $20K and built our house for $60K. Fourteen years later it's worth $360K. We paid off the property within a few years and built our house with cash so we never had a mortgage.

My wife was also fortunate to get a great job with the county. The only reason we'll be able to retire early is because she has a state pension that will pay about 2/3 of our retirement income. We're one of the lucky few.

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Always Buy less than you can afford.
We have always believed in living simple. We drive old cars and have never paid more than $4000 for a used car. We live in a small 1456 sq/ft house. It's all the space we need and is easier to clean, heat, etc. More space usually just means more stuff to fill it.

Having said that, we still waste more money than we should, but life is meant to be enjoyed. We eat out occasionally, take small vacations a few times a year, and my wife even gets her Starbucks coffee every now and then.
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Old 08-21-2018, 08:52 AM   #19
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No way do I know all the ins and outs of what the tax guy called "the "gears and levers" of retirement: the most reasonable age for me to take SS, how to manage my portfolio to reduce SS taxes, maintain my nest egg value while minimizing RMD etc. The consultation was worth the cost...
Our lawyer explained it easily. If you retire at 55, take you stash and divide by 35. That is how much you can spend each year over and above any pensions.
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If that list works for you, then great.

For me, the list is far too absolute. Debt can be a useful tool when used wisely. And sometimes leaving money on the table is appropriate (this is an early retirement forum after all)...
I always left something for the other guy when investing. No need to be a pig and try to time the top.
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Is Number 11 a typo or intentional: "Rile". I hope it was intentional!
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That crappy mortgage was such a stupid move on my part and it still bugs me.
So much advice on this forum focuses on saving. And that is most of the solution. But taking a calculated flyer or two can make a big difference to successful early retirement.
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Old 08-21-2018, 08:57 AM   #20
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People here have seen this before but I thought I would post it anyway. From another doctor turned financial guy. One of the good ones IMHO. 'If You Can'

https://www.etf.com/docs/IfYouCan.pdf
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