Money can buy a lot of things. But one thing clearly stands above the rest…FREEDOM
Most people today spend their lives in what can only be called financial slavery:
- The bank owns their house.
- The dealership owns their car.
- The credit card companies and student loan providers own a sizable chunk of their future income.
- Consumer loans for bigger TV, fridge and even mobile phones eats into the salary
- Their boss owns every hour between 9 am and 5 pm five days a week.
Perhaps the most clever and insightful observation of the futility of the rat race comes from Ellen Goodman:
Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it.
Is this all life has to offer?
Running out the clock five days a week as you try to stay ahead of your mounting financial obligations and try to scrape together a couple of vacations a year?
Slaving away to be able to afford things that you mostly don’t use?
There has to be something better out there.
What if you owned all your possessions free and clear? What if you had enough money coming in from outside your job to not need your job? What if you had enough coming in to not need to work at all?
In the online world, this is sometimes called FI (Financial Independence) or FIRE (Financial Independence, Retire Early).
This may sound like a pipe dream, but it is something that you can achieve if you set your mind to it. The short version is that is you can get rid of your debt and save up 25x your yearly spending, you can walk away from your job.
How can a reasonable person hope to pull this off? The way I see it, there are four key pillars:
- Avoid debt
- Control your expenses
- Increase your income
- Invest your extra time and money
As Warren buffett said : “If you buy things you do not need, soon you will have to sell things you need.”
So the mantra is to understand the difference between an asset and liability. Control your spending and invest in building assets that complement your income or can generate income in the future.
Hope this was helpful…We can help you plan & invest for any or all of your financial goals…email or call to book an appointment for a discussion – Invest@smartserve.co / 9916804769
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