My Financial Independence Journey » About
About
Hello Reader,
This blog is a chronicle of my quest to achieve early financial independence via passive income, in other words becoming a rentier. I plan to achieve this goal by coupling a high savings rate with a dividend growth investment strategy.
Given how late I started in the game of actually having a career (thank you, needless amounts of education and training), I am to achieve financial independence by around age 45. Why 45? Because some quick back of the envelope math suggests that while this is an aggressive target, it is doable.
On how I aim to achieve financial independence
In order to achieve financial independence, one needs capital. In order to acquire capital, one must save money. A logical corollary of this is that the more money you save, the more capital you can acquire, and thus the faster you can can achieve financial independence. That’s why I aim to save at least 50% of my income.
Factors aiding this goal:
- I have a relatively high income. In the low six-figures.
- I am relatively frugal by nature.
Factors opposing this goal:
- I live in a high cost of living area. No way to escape that without quitting my job.
- I require a certain minimum standard of living to be happy, and thus have no desire to take extreme austerity measures.
- Material things are the only way to achieve status in society and be taken seriously by other people.
What do I intend to do with all this capital? First and foremost, three things:
- Create an emergency fund equivalent to one year’s worth of expenses.
- Consistently invest in dividend growth stocks.
- Learn about and potentially pursue additional varieties of passive income producing investments.
On the origins of my goal to become financially independent
I’ve always worked hard – through school, through more school (grad school), through post-school training (post-docs), and now at a real job. But, the simple fact is that hard work only goes so far. My salary could vanish in an instant with a round of layoffs. My job could rapidly transition from cool to craptacular with a reorganization or a new boss. But so long as someone else (my company) is paying the bills, I have no choice but to grin and bare it. Oh, and scramble like a headless chicken trying to find another job in the event of layoffs or if the work environment sours.
For me, financial independence is all about insurance and freedom. Not freedom from having to work, but freedom from the stress and worry that comes with career insecurity. Insurance against having to make a post-layoff mad dash to a new job that may not interest me, in some new city that I may not want to live, just to pay the bills.
In today’s economy insecurity abounds. Companies don’t really care about their employees. The government isn’t going to be there for you in any meaningful way. You’re basically on your own.
In one job that I worked at, I had a horrible boss. Had I been older and more experienced at the time, I probably could have gotten a lawyer and sued the company and my boss all different flavors of harassment and hostile work environments. But I needed the job, so I stuck with it. Wouldn’t it have been nice to just walk away, rather than hang in there until I was able to land another job?
In another job that I worked at, my continued employment was always in question. Maybe they would have the money to pay for me. Maybe not. And of course, they would never tell me if I was going to be let go until a week or so before my contract ended. So I’d get a month extension here, a three month extension there, maybe another one month extension, then a six month extension. Repeating until I finally moved on to another position. I liked this job and my boss, so wouldn’t it have been better if I could have just focused on doing good work, rather than living in a perpetual state of anxiety over my employment?
Currently, I have a great job and a great boss. But I’m always cognizant that those things could change, especially since I work in a potentially labile industry. Hopefully, by the time the change occurs, I’ll be financially independent, so the fallout will be on my terms and play by my rules.
Sincerely,
Your Humble Blogger
If you want to, you can email me at myfijourney at gee mail dot com.
14 Responses to "About"
Leave a Reply to MFIJ Cancel reply
Material things are the only way to be taken seriously by other people. Personally, I don’t care about those types of people. You must be an extrovert. Introverts tend not to cared about social status, especially the INTJ personality type.
Actually, I’m a textbook INTJ. I’ve spent a lot of time on the outside looking in and trying to understand why people act the way they do. Additionally grew up as an outsider in a very status conscious region of the US, so I also learned a lot through the school of hard knocks. I may not care about materialistic people, but I’m not foolish enough to think that their opinion of me doesn’t matter, because I’ve learned the hard way that it does.
I live in a neighborhood now where everyone tries to outdo each other with cars and other crap. It is a toxic environment, especially since we have kids. We hope to move this spring.
“I’ve spent a lot of time on the outside looking in and trying to understand why people act the way they do. ”
Yeah, me too. I don’t think most are truly happy or have it figured out. Good times with friends and family trump a nice car any day.
I grew up in a place where status was important. Strike one against me was that I and my family were outsiders. Strike two, my family didn’t pretend to have more money than we did. We didn’t drive expensive cars, and I was the only kid without expensive brand name sneakers. I think the best correlation to today’s kids would be being the only kid without an iPhone.
The result of my lack of status was a subtle but painfully apparent ostracism. I do not miss living there.
I was also one of the few kids in my school without expensive trainers/sneakers and it totally consumed me – I was furious at my parents (who also didn’t drive expensive cars) and felt devastated that I couldn’t keep up with the “cool kids”
Difference was, my parents could afford this stuff but just lived frugally (dad grew up in the war and mum grew up in 3rd world poverty), albeit in a nice house. I swore that once I earned enough money I wouldn’t “cheap-out” like them…
But, painful as that childhood peer pressure was, it ultimately gave me the confidence to seek contentment and happiness in non-material things. I still to this day lust after a pair of Nike Air Max but I’ve not owned any yet!
Good luck on your journey!
Thanks for stopping by!
My parents could afford all kinds of stuff too. They just didn’t buy it. So I didn’t get the cool clothes, or jackets, or a car for my 16th birthday or anything else. I also pledged that I wouldn’t be as cheap as they were. We can see how well that pledge turned out.
But we live in a world where our material goods define us to others and thus dictate how others interact with us. I’m quite certain that I could get a lot farther socially if I spent most of my money instead of saving it. I have yet to figure out the best way to deal with this.
I fully sympathise with the balance you’re referring to – its vital to get to a place where you’re comfortable with and accept your social position and personal image (especially when we weren’t able to materially invest in our image during childhood)
That said, I’m not sure that material items can progress this journey significantly. Even if a social door was opened because you drove a new BMW, I don’t think I would feel comfortable or “at home” in such an environment, knowing that I would not be there on personal merit but because I had a debt-funded status symbol. Personally it would feel like I wasn’t being true to myself and would make me quite uneasy
Obviously we wouldn’t get far walking around in rags (I await backlash from the truly ecofrugal on this one!), but spending thousands on status, gadgets and fashion is unlikely to pay back
I think you probably believe this to a degree already as you’ve refrained from excessive spending so far after all, but we’ve all got to find our own balance
So it looks like we’re disagreeing to an extent and neither of us has “the answer” unfortunately. Perhaps a “keep up with the neighbours” experiment would be insightful? Rent a new car and some expensive suits for a month and see what happens?
All the best
Perry
About the only real certainty that I’ve discovered in the world of using material goods for social status is that you have to dress well. Not necessarily Armani suits well, but at least at the level of everyone else in your work environment (if you’re a white collar professional with an office job). I’m still embarrassed at how late in life I figured this one out.
My current goal is to pump some money into my one bedroom apartment. It’s not a dumpy place, but it needs some nice decorations, plants, and the like to make it much more presentable as it’s rather sterile looking at the moment. Also, a fully stocked liquor cabinet and wine rack. Anything I can do to make guests feel comfortable here. I figure this is a lot cheaper than renting a bigger apartment or a house.
Hello MFIJ:
I have just discovered your blog and I find it very interesting in fact.
I am Spanish and I live in Seville, a beautiful city of the southwest of Spain. As you, I am trying to become in a long-term investor and I am looking for my financial independence too. My first equity have been purchased two years ago, so my portfolio is too young!
I have a portfolio with some Spanish stocks, of course (like Telefonica, Banco Santander, Red Eléctrica Corporación, Ebro Food…) and I am introducing in your market with KO, NYX and INTC.
Thanks for your blog and I am going to read your interesting articles and enjoying it!
P.D. Sorry for my English, I am improving it!
Ezequiel,
I’m glad that you’re enjoying the bog so far. It’s great that you’re taking steps to becoming an investor. I don’t know much about Spanish stocks, so I can’t offer much advice there, but I’m sure that the same kinds of evaluation techniques can be applied to stocks anywhere in the world.
Thanks for your reply. Although I have Spanish stock, I am trying to purchase stock in NYSE.
I am going to read you with attention
. Thanks for your work and I am waiting for your next analysis…
Greets from Spain
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