Financial Independence Is The Beginning, Not The End

doorskySpecial note from Dividend Mantra: Today, we have a guest post from FI Fighter. This post is a continuation in the series of articles I’ve been publishing lately that focus on financial independence and how it can make your life better. But while I’ve enjoyed presenting these articles to you readers, next week we’ll get back to some core articles on stocks and dividends as I update my portfolio and dividend income for February. I guess I’ve just had financial independence on my mind while on my little break. With that said, I hope you all really enjoy the following guest post. And thank you FI Fighter for putting this together!

FI Fighter is an early financial independence seeker who aims to get there at 30. This day will arrive when the passive income and semi-passive income streams bring in more each month than is needed to pay bills. Let the journey continue!

I’m currently 29 years old and have high hopes of achieving early financial independence at the age of 30. I started the journey to early FI in 2012, and have been trying to consistently invest 60 to 70% of my earned income each and every month. In comparison to some of my peers in high-tech, I live well below my means. I’m certainly frugal, but by no means do I feel deprived in any way. Actually, I feel like I have everything I need, so I never feel burned out from saving “too much”. I’m actually just as determined to reach early FI, if not more so, than the day I first got started.

The truth is, motivation comes easy when there is progress being made. Over the past two years, my investment portfolio has grown by leaps and bounds, and the passive income it generates continues to expand. I know that each day of work I put in at the company office is one less day I’ll need to do so in the future. This rising cash flow gives me reassurance that the plan is working. If you haven’t done so already, I would highly recommend you start documenting your own passive income progress each month. In my case, the results are easy for all to see, and the proof is in the pudding. As such, the progress made only serves to add more fuel to the motivational fire.

Slowly, but surely, day-by-day, I continue my ascent up the mountaintop. Eventually, with enough time and persistence, I know that I will reach the top of the summit. I will have reached the Endgame.

Early Financial independence… The Endgame… it’s what we are all fighting for.

As I get closer and closer to the top, though, I’m starting to realize that the term “Endgame” is a surprisingly unfit name to use to describe such a magnificent accomplishment!

The Start of a New Chapter

What is commonly referred to as the “end” is actually more of a “beginning”. The journey won’t conclude when you reach the early FI summit. No, I would argue that once you reach the top, you’ll simply be starting a new chapter in life… One that will be filled with limitless possibilities.

Anyone with aspirations to attain early FI is obviously trying to get there well, well ahead of the rest of society. For those in a similar boat as me, this will mean getting there a good 20-35 years earlier than conventional wisdom.

20-35 years… That’s A LOT of time! Most importantly, that gives you a WHOLE LOT more life to live!

Achieving financial freedom so early will feel like obtaining a second lease on life. You won’t get there old and grey… battered down, and broken. No, you’ll arrive at the next chapter still full of energy and zest. The sun will still be peaking with plenty of daylight to spare!

New Beginnings

What does the future have in store for you? That’s for you to decide! That’s also part of the thrill of reaching the top of the mountain… Finding out what lies beyond… You’ll begin to look around, and when you do, you’ll be amazed that there’s plenty more for you to see. New paths, new roads begin to unfold… Uncharted territory waiting… just begging to be explored.

Financial freedom makes all that possible. It brings with it one prize that all humans covet –

Time.

It’s something that cannot be bought. It cannot be regained once it passes. Once it’s gone, it’s gone forever. Time simply marches on, ALWAYS. And since life itself is finite, the older you get, the more you cherish it.

Why not own time in abundance? Why not maximize what very little you get in this lifetime, by being able to spend it freely as you see fit during the PRIME years of your life?

When I daydream about the future, I can’t help but get extremely excited. For one thing, I know that the 9-5 rat race lifestyle I’ve been living these last seven years will simply become a thing of the past. Once I detach myself from this routine, I know I’ll be free to live the life I’ve always envisioned.

When I reach early FI, I believe the world will start to open up. I’ll be able to wake up in the morning whenever I want. I’ll be able to travel the world, living in foreign countries and soaking up new experiences. I see myself learning new languages, trying different cuisines, and adapting to different environments. I picture myself growing as a person and becoming vastly more cultured.

A common saying is “you only live once” (YOLO), so why not party it up today and worry about tomorrow later? I say, take care of your financial situation early in life, and then you can YOLO it up every seven years, instead. For the rest of your life, in fact!

Break the Monotony While You Still Can

My biggest fear in life is growing stale as a person. I can’t stand the thought of becoming specialized, and I know that the more time I spend at work, the more specialized I become.

Days start to blur and I start to lose track of time. I can’t remember if something happened last week, or last month because every day (M-F) feels almost the same.

That’s scary. But it isn’t near as terrifying as witnessing my own life passing right before my eyes and knowing that I am hardly progressing as a person. We all get older and aging is inevitable. However, I feel like the person who is most willing to try new things and dabble around is the one that will remain mentally vibrant the longest.

Just look at all the older adults around you! How many of them still have a burning enthusiasm for life? How many of these folks still possess interest in trying new things? Over enough time, most people have a hard time saying goodbye to the 9-5 because they have grown so unaccustomed to change. If you spend enough time working for the man, eventually, you won’t EVER be able to let go!

Life is An Adventure!

Never forget, life should be an amazing adventure! A life not worth re-watching on the big screen is one that is not worth living.

You shouldn’t go through life trying to get from Point A to Point Z as comfortably as you can! No, you should:

Experience. Explore. Experiment.

Live a little… Or even better, get to early FI as soon as possible, and live A LOT!

Most people who retire at the traditional retirement age of 65 don’t have a whole lot to look forward to. The sun is setting and the thrill is almost gone. For many, getting to the finish line will mean crossing over with a slew of health problems, low energy, an inflexible mind, and worse, a waning desire to live life.

That’s so incredibly sad. But in many respects, traditional retirement is an actual “Endgame”.

Early FI is different. Vastly different! If you can reach the top of the summit at a young age, you’ll be amazed at how much more there is out there for you to explore. The best part? You’ll be able to do so while the sun is still radiating brightly! You’ll have your health, energy, spirits, enthusiasm, and hunger intact to make the most of each and every day.

Doesn’t that get you excited? Aren’t you ready for early financial independence? Don’t you deserve the best that life has to offer?

I know I’m ready for New Beginnings! How about you?

Photo Credit: nattavut/FreeDigitalPhotos.net

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35 Comments

  1. DM thanks for hosting this post.

    FIF. Great motivational post! Nice to see you sharing over here. There is certainly much to look forward to when you have complete control over your time. I think most share the desire as you and DM to FI very early on so that we can pursue our interest full-time.

    Life has so much to offer and I look forward to seeing how you navigate the FI waters once you’re there. Here’s to clear skies and calm seas once you arrive…

  2. Some people don’t mind working over age 50 or 60. I heard one guy said “I have a good paying job that I don’t mind and I like fancy stuffs and swanky restaurants. therefore, I don’t mind working”. Good for him right? It works out for him. He is in 60’s anyway. Most of you guys want to retire at 40, 40 is a magic number that everybody feels comfortable with. I think that everybody should be able to retire at 40 with at least one hobby that generates extra income, unless retiring with millions dollars. I’m taking to you Mr. Mantra. I assume that you’ll be writing blog even after you retired. Top notch bloggers make $5000 a month. At the speed your blog is growing, you will be find.

  3. Good to see you in these parts FI. It’s funny because I just submitted a guest post to another blogger on this same topic. YES, my wife and I are ready for a new beginning. Actually, we’re having several. Our son is due in a couple weeks. I started my new site, and have a remarkable response so far. After the little guy is born, my wife will step back from 40 hrs/wk to 10 hrs/wk. Lot’s of change, but it’s the culmination of the last 2 years of planning and investing.

    This is one of the best things about our online community. We push each other forward and support each other. We’ve all watched your progress Jay, and now that you’re getting really close……We can’t wait to watch you cross the finish line!
    -Bryan

  4. Jason, thanks for sharing the post by FI.

    As has been alluded to in the post, and others this past week, financial independence is really a matter of options. By freeing oneself from financial constraints, you gain flexibility in your decision-making ability and can explore options unavailable prior to FI. Not one person’s financial freedom will look the same, but the ability to have options is universal.

  5. Awesome take on FI. Too many people think that FI IS the end. One of the guys I work with, asked what I plan to do in retirement. I told him that I have too many things I want to do that I don’t have time to do currently while working 10-hrs per day (with one hour of prep before hand)

  6. FI Fighter,

    the biggest advantage is, that you’ve already identified in your young age, what you can align with shares, dividends and the DGI.

    The time is your friend – and you have a perfect starting position in the race for Financial Independence.

    Best whishes and keep going!
    D-S

  7. Hi Jason,
    After reading FI fighter’s blog and this article “Can $100,000 Invested in Rental Property Retire Me RIGHT NOW?”, I’m amazed with the american real estate. Wow, how it’s possible to find houses so cheap, and to rent it with a 10% or 20% cash return ! Don’t you want to sell some stocks and buy one or two properties ?
    I will appreciate to read your thoughts about investing in rental property with these enormous yields.
    Maybe in the long term (20/30 years) investing in blue chips companies will offer a better yield on cost without any work, but in the first years, rental investing could boost your income and let you financially independent earlier that expected.
    Thank you, and forgive my bad English.
    Eric, France.

  8. Thank you for the post, FI Fighter, I’m happy to see you here. You articulated too many good points to enumerate! I totally agree with “I feel like the person who is most willing to try new things and dabble around is the one that will remain mentally vibrant the longest.”

    Financial independence is simply a much better framework to pursue my interests in life. The soul crushing 9-5 environment is too stifling for real innovation.

    I look forward to seeing your journey unfold after you quit your job. My wife and I are very close ourselves, hopefully in about 6 months we’ll be pulling the trigger. I just can’t wait for the adventure of fending for ourselves and exploring new possibilities in this awesome universe we live in.

  9. For me, direct property/rental investing is beyond the effort i can put into it. I work with wealthy (very smart) individuals who dabbled in this and regretted every second. I’ve heard only 1 success story who made it work. This is obviously market based, timing based and skill based inputs. I wont touch it with a ten foot pole.

  10. Young,

    I’ve always said early retirement isn’t for everyone. While I see no drawbacks to financial independence, quitting full-time work before 40 just isn’t in everyone’s DNA. And that’s okay. I don’t think it’s some kind of noble goal that everyone should strive to attain. It works for me, and I simply try to inspire others with similar aspirations.

    However, I do really hope I’m able to keep writing well after I reach financial independence and no longer work in the auto industry. Writing has always been something I was interested in, but now I’d say it’s a full-blown passion for me. I enjoy engaging with like-minded individuals, and I enjoy motivating people to reach their goals. It makes me feel great to know that I’m able to help others.

    I don’t know if I’ll ever be able to make $5,000/month doing this, but that’s okay because I don’t do it for the money. I do it because I genuinely enjoy it. But there is a chance that this blog will be able to bridge some of the gap between dividend income and expenses even sooner than 40, which would be fantastic. Every day is a new opportunity!

    Best wishes.

  11. Eric74,

    FI Fighter is doing something pretty amazing with rental properties. However, I have no desire to follow in his footsteps.

    I enjoy dividend growth investing because I’m basically a silent partner. PepsiCo has to go out and run factories, distribute products, negotiate contracts, deal with a massive network of employees, market their brands, innovate, develop strategies, etc., etc. However, as a shareholder in PepsiCo I don’t have to do anything but sit back and collect a check every three months.

    With rental properties there’s a lot more to it then that. There’s the scouting of properties, which I can assure you is a lot more work than scouting between 100 or so high quality companies. There’s financing and dealing with banks. And with financing a property it’s a bit different than financing a dividend growth portfolio. I’ve built my portfolio from scratch with no debt because the barriers to entry are much lower. I don’t need to come up with $40k or whatever to buy a property. I just need $1,400 or so at a time to purchase stocks. Then once you get the property you have to decide whether to have a management company run your property, which will eat into your returns. Then there’s dealing with tenants, vacancies, repairs, maintenance, problems, etc.

    Now these headaches come with potentially greater returns, and that’s really the rub. I’m willing to leave a little money on the table by avoiding rental properties because I simply have no desire – I repeat: no desire – to become a landlord. My risk/reward is a bit different with stocks, and I’m okay with that. For exposure to real estate I’ll take my REITs any day and collect the higher yield and slower growth.

    I’m sure FI Fighter will chime in. His path to FI will be much quicker than mine because he’s willing to take on the additional risk, debt, and hassles. I’m choosing a slower road that better works for me.

    Just my take on it! 🙂

    I hope this helps.

    Take care.

  12. Stoic,

    Yes, definitely my main desire for achieving early FI is so that I can free up more time in my day to pursue the activities that I want.

    Some people are cut out for the corporate 9-5 gig, but it just never resonated with me. For instance, if I wake up in the morning and it just so happens to be a particularly beautiful day out, I would like to have the option to cancel plans and just go out hiking in nature.

    Since I’m currently reliant on my employer to make ends meet, that is completely out of the question and grounds for immediate termination.

    That type of lifestyle just doesn’t work for me. Life indeed has way too much to offer. I want to do make sure I do my best to experience as much as possible.

    Cheers!

  13. Bryan,

    I’m very excited for you and your new beginnings. 🙂

    That’s awesome that you have so many incredible things going on right now… Just a few more weeks!

    Yes, I am extremely grateful to be a part of this online community. It’s such a wonderful support network, and one that I’m sure a lot of people don’t have access to in their day-to-day lives. I know when I first started, I had no other friends who were pursuing this path. Everyday, I pick up a ton of motivation and inspiration from following other bloggers, and this site right here, Dividend Mantra, was one of the first I read to get me going on the journey.

    All the best!

  14. Young,

    Yeah, there’s that saying, “if you enjoy what you do, you’ll never work a day in your life.” I believe there’s a lot of truth to that quote… however, once you look pass the surface, most places of employment aren’t quite that accommodating, unfortunately.

    Unless you are your own boss and get to make your own rules, you’ll find that you won’t be able to get away from corporate politics, backstabbing, bureaucracy, etc. in most companies… So, even if you do enjoy your job, as long as you are dependent on it to make ends meet, you’ll have to oblige to somebody else’s rules…

    I’ve been around some amazingly talented engineers who have been let go for really no rhyme or reason. Lots of people trying to climb the corporate ladder, and sometimes the ones in charge only want to promote/recruit others from their “good ol’ boys” network. If you don’t fit in, too bad for you.

    Financial independence isn’t about not working, or just bumming around on a beach at an early age. It’s about absolute freedom. If you enjoy what you do in your career, go at it full speed. If you are financially free though, you’ll never have to put up with anything you don’t like. You have the choice to walk away and not worry about not eating tomorrow.

    And that’s what it’s really all about… I think a lot of us preach to get there early in life so that we don’t have to worry about all the stress, toxicity later in life when things will inherently become more difficult due to age, health, commitments, etc.

    Take care!

  15. writing2reality,

    Absolutely, freedom of choice and flexibility is what it’s all about. And you’re exactly right, no one’s path will look identical… You have to plan accordingly to meet your own goals, ambitions. But ultimately we all want the same thing, and I think everyone has a right to it — to be able to enjoy (find fulfillment/purpose) our finite time on this world as much as possible.

    Cheers!

  16. Liam,

    Too many things to do and too much time to do them… that would be a wonderful problem to have, and I hope we both get there soon, my friend.

    I hear you on the long days (10 hours plus) that don’t leave much time remaining to enjoy other pursuits.

    All the best!

  17. Eric,

    Yes, for the most part high returns (10% plus) in real estate are possible. However, like most things that sound too good to be true, the devil is in the details… These days (2014), the really high returns (20% plus) are getting exceedingly difficult to locate due to the surge in housing prices and the climbing interest rates… These deals were most abundant around 2009-2012 timeframe when foreclosures were a dime a dozen.

    I think Jason summed it up perfectly… Real estate isn’t for everyone, and those are some of the risks you take when investing. The barrier to entry is extremely high, as pointed out since most lenders will require you to have 20% downpayment to purchase for an investment property. With dividend stocks, there’s no minimum, and you can purchase shares a little at a time.

    Stocks are also much more liquid so it’s easier to open and close positions. You have easy access to your equity which is not true for property.

    Also, the one thing that stands out to me the most about real estate is the unpredictability of it all. For instance, you and I can go out and purchase ten homes today… We can buy into the exact same neighborhoods even. The only difference being that you buy a house, and I buy the house next door to it… After 10, 20, 30 years, you might have been lucky to land some outstanding tenants and have the property perform better than your wildest imaginations. You love real estate investing! On the other hand, I might just be unfortunate and land deadbeat after deadbeat… I might have high repair costs and lots of vacancies… After the same timeframe, I might just be totally burned out and want nothing to do with real estate anymore…

    These type of experiences happen everyday to landlords. That’s why you’ll find many who love REI and others who want to avoid it like the plague. Granted, this is an extreme example, but these things do happen.

    With dividend growth investing, it’s much more predictable. Nothing is guaranteed, but if you went out today and bought a basket of quality stocks, you would be almost 99% sure that your investment would be performing 10, 20, 30 years later… Not only that, you would be expecting dividend pay raises in the process. 🙂 Another investor could copy your strategy and track your performance as well.

    Since REI is so much more unpredictable, a lot of investors recommend using conservative math when running numbers… You have to be extra careful in buying right to ensure the property cash flows. This means using the 50% rule, or allocating say 20% of gross rents aside for maintenance/vacancy reserves.

    For myself, I’m using the 3x rule. If my passive income target is say $1500/month, I need at a minimum, 3x that number ($4500/month net cash flow) using rental property before being able to declare early FI comfortably.

    So, I would say REI is higher risk, higher reward. In the end, both DGI and REI are time tested and proven investment vehicles that have helped many get to early FI. They both work!

  18. Even if you are your own boss, running a business is still a job. You’re going to have suppliers and vendors you don’t like, customers you can’t stand, and employees who are difficult, to say the least

  19. FI Fighter,

    Good to see your guest post here. I am glad you are so determined and close to being able to free yourself from the 9-5. Can get some time to enjoy things that are important with the amount of time you have.

    Thank you both Dividend Mantra and FI Fighter for putting together another great article and interacting with the community!

  20. I am absolutely motivated by financial independence, but I don’t ever see myself quitting work completely. I hope to drop down to a part time day job at 40 and spend the rest of my time pursuing other interests. You guys are both an inspiration. Keep up the good work!

  21. Thank you Jason and FI Fighter for your detailed answer.
    Like Jason I chose dividend investing, mostly because it’s a passive income I can manage worlwide and the stocks market were cheap in 2012.
    In the long term I think to have 2/3 of my assets in stocks and 1/3 in real estate (I imagine one day to pay a mortgage with dividends).

  22. I’m always fascinated by the comments of the younger generation who see those who retire at 60 or 65 as not having enough time to enjoy life and look forward to much. Really? I’m 77 and enjoy every day to the fullest, having traveled and worked around the world for more than 40 years. I still work seasonally and enjoy the breaks in between.

    Having great globs of money does not guarantee happiness. And, retirement from the 8-5 workplace does not guarantee happiness. It’s just another stage of life full of ups and downs, challenges, and triumphs. What I have learned along the way, is that the journey is what makes the difference. Enjoy each moment, each step towards financial freedom. Once you’re there…it’s just another goal met. The amazing thing is the human mind then just thinks up another goal, another hill to climb. It’s the journey of life.

  23. Great Post! It is so important to remember that life ought to be lived as an adventure. Reaching FI helps facilitate that adventure. If more people realized this, they would be willing to make the very sacrifices that you have started to make. Thanks for sharing!

  24. Spoonman,

    Thanks, I’m glad you enjoyed the post.

    Soul crushing… that’s a good description of how I also feel about the 9-5 grind. It can be very stifling at times, and I know in high-tech, when things get really busy, 9-5 is just about the bare minimum someone has to put in. It’s very common to work 10 hour days and have to come in on weekends as well.

    This is all fine and dandy when first starting out, but it gets pretty old, pretty quick over the years.

    That is amazing that you and your wife will potentially be able to call it quits in just six months time. Very exciting and I hope you have a blast post-FI.

    Infinite possibilities await! All the best. 🙂

  25. D-S,

    Yes, the sooner you get started, the better and less years you will have to put in. Compounding is most powerful when you have time on your side.

    Take care!

  26. Dividend SWAN,

    Yes, I’m very much looking forward to having some free time to myself to do the things that I want. I really can’t wait until I reach early FI 🙂

    Appreciate the support and all the best to you!

  27. Addison,

    Financial independence is a wonderful thing for anyone to achieve, even if you do have plans to keep working. There’s absolutely nothing wrong with that, and I even picture myself working again in the future post-FI.

    I just never, ever want to work for corporate again. I need to have freedom of choice and the ability to walk away should I choose to.

    Getting to part-time at 40 would be an amazing achievement. Best of luck to you on reaching your goals.

    Thanks for the support!

  28. Although i happen to be one of the younger generation, I’m glad to hear from someone in the older generation telling it how it really is. Thanks for the peek into the future and the solid advice as well, life is definitely about the journey…

  29. Davidmichael,

    That’s awesome that you are 77, enjoying life and still going strong! Much kudos to you and I can only hope to be so fortunate in the future.

    I think for the younger generation, it’s wanting to get to early FI so that we have the choice to say “no”. You see so many millennials starting out the rat race straddled with so much debt… and all these doom and gloom articles from the media saying that future generations won’t be able to retire until 80 or so…

    It’s pretty depressing stuff. There’s nothing wrong with working at a late age, provided you enjoy it and find fulfillment. Sadly, I just really don’t think that’s the case for many people. I can’t imagine it being much fun working passed 65+ not by choice but by sheer necessity.

    We all want to find happiness in this world. And it’s different for everyone. Financial freedom simply opens up more avenues for you b/c you no longer have to worry about the time (dependence) element.

    Option A: You reach early FI. If you still can’t find happiness and find yourself missing work, by all means go back. FI doesn’t prevent you from doing that.

    Option B: Don’t care to invest or manage money until late in life, barely scrape by from paycheck to paycheck, and finds yourself miserable at work… You don’t have the option of just saying, “screw it. I’m not happy, I’m going to stop working, FI instead.”

    I’d much rather go with Option A.

    All the best!

  30. Leonard,

    Yes, it’s about enjoying the ride on the way to the destination. It’s possible to have it all. I recently came back from Hawaii and we took the Road to Hana. A very windy road, cruising at a snail’s pace. I still loved every moment of it, and the destinations we reached along the way were even better.

    I liken the journey to early FI like that. You don’t need 100% financial freedom to enjoy some of the benefits. Having the option to go from full time to part time work would be a huge accomplishment in itself.

    Then again, even just a tiny bit of passive income does wonders… My first dividend was for $10 and it made me a much more confident, less stressed employee 🙂

  31. I’m with Jason on the real estate, i totally get why some folks want to own property and lease out…for me, after sitting down and working it all out, i just figured with a REIT you get all the benefits of rental income and virtually 0 cost, no expenses when toilet floods, don’t have to deal with annoying tenants and so on 🙂 Obviously the risk is the REIT implodes but i’d like to think that is a low probability with the quality ones.

  32. Awesome post!! I’m always happy to see people committed to FI, since I think the philosophy is spot-on. Why delay freedom until your 60’s … when you can experience it in your 30’s or 40’s, instead?!

    In defense of people in their 60’s, I will say: If you maintain solid health, strong friendships and a great sense of adventure, you can have a ton of fun in your 60’s, 70’s, 80’s, and beyond. My 73-year-old parents have a more thriving social life than I do!

    But, that said, it’s extra-awesome to experience FI in your 30’s AND in your 60’s — and every decade in-between!

  33. Thanks DM, great post. As someone in the early stages of gaining financial independence, I always believed knowing why you want it and what you plan to do once you’re there is just as important as the journey to financial independence.

    I’m not saying mapping out step by step what you want is necessary, but as I heard someone say once before – you don’t need google maps directions to where you want to go, just a good compass.

  34. I’m down with the FI plan, and find myself in agreement with FI Fighter in principle. However, no offense to FI Fighter, but being 29 and having not yet crossed that bridge makes his talking about life in early retirement so authoritatively a bit presumptive and premature, don’t you think? Again, I’m down with the plan and have the same aspirations, albeit at a bit older age (54), but just think the article could be better presented as more of a hopeful dream given the author’s age and position. If this were written by MMM or Nords or someone else who’s been FIRE’d for some time, it would resonate more. Anyway, I applaud the enthusiasm and the message, but just think FI Fighter could have tempered the delivery given the circumstances.

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