I’m Already Financially Independent

futuremeAs many of you already know, I started my journey to financial independence back in early 2010. I was deeply in debt, didn’t have much cash, and knew relatively little about investing. Poor decisions with money for most of my life led me to a position I didn’t really feel comfortable being in. The idea of working to earn and earning to spend only to repeat this process over and over again until I was old and used up made no sense to me and I desperately wanted out.

If poor decisions led to a poor financial position, could great decisions then not lead to a great financial position?

I decided to find out.

So here I am near the end of the fourth full year of my path. I’m on pace to earn almost $6,000 in dividend income this year. That’s about 33% of my long-term goal of earning $18,000 in dividend income per year by the time I’m 40. Considering I’ve got eight years to go, I’m definitely on the right track.

But I often tell people I’m already financially independent, and I’ll tell you why I say that.

The Future Me Is Waiting

I explain to anyone who will listen that there’s a me that exists in the future. He’s 40 years old and already lives off of passive dividend income. This future version of myself is simply waiting for the me of today to catch up and become financially independent.

Financial independence is nothing but a foregone conclusion in my mind. It’s actually already happened. I simply have to go through the motions today – leverage the superpower of consistency, stay persistent, save a high rate of my net income, and invest in high-quality dividend growth stocks at attractive valuations.

Every time I buy a stock, it’s like adding a brick to a castle that, in my mind, has already been built.

The me of 2020 already exists in my mind. He’s completely free. He lives without fear of going broke or having to work for the rest of his life. The decisions he makes aren’t based around money at all, but rather maximizing time and happiness.

The Power Of Belief

I truly believe that I will be financially independent eight years from now, that I will catch up to the me that exists in the future. There is no doubt in my mind that the me of today will become this me of the future. Once you envision something and believe in it with all of your heart, it’s almost impossible for anyone or anything to deny you it.

Equally so, if you don’t believe that you’ll reach a goal that you set for yourself, you most likely will fail. The power of belief is real. Every action I’ve taken over the last five years and every action I’ll take for the next five is fueled by belief. Belief that I can save and invest my way to financial freedom. That I can change my own reality. That I can own my time. That the me of today will one day meet the me of the future and they’ll be proud of each other.

Reverse Engineering

Once I realized that there was a me that existed in an alternate and future reality, one where I didn’t have to slog down to a day job I despised until I was 65 years old, I quickly figured out that I had to reverse engineer my way to him. After all, if this me of the future became financially independent, then there were steps that had to be taken to get there. Luckily, I could deduce the steps I had to take by drawing a line from the finish point back to where I was.

But the key is to start small. Focus on what what you need to do today. You don’t climb a mountain by running as fast you can to the top. You plan and plot each move. There’s a map you follow. You can see the end, the beginning, and where you’re currently at. You strategically climb forward and upward with intent, each move bringing you closer to the end and further from the beginning.

When I first started this journey, I put a basic map of my own together. I wrote down all twelve years of my journey with the corresponding age and dividend income I anticipated I’d need to earn to keep me moving up the mountain. Extrapolating that far out into the future is difficult and not necessarily 100% accurate, but it need not be so. One can adjust as they go. The key is knowing where you’re going, how you’d get there by tracing your steps backward, and then making the journey from start to finish.

The Paradox

What I find interesting is that this me of the future exists in my mind. But he will only become reality if the me of today continues to make the moves necessary to make financial independence a reality.

It’s like the future me that’s motivating the me of today to get in gear and do what’s necessary to become financially free only exists as long as the me of today takes those necessary steps to attain freedom. If the future me is a mirage, the me of today is walking in the desert, each step bringing me closer to the mirage and salvation. But it’s only upon actually reaching the mirage that I realize that it was actually me all along; that I was motivating myself to become something greater. And then I actually become what I imagined I already was.

What this paradox teaches me is that I will be whatever I want myself to be. If I want to become financially independent, then that’s what the mirage will look like in my own mind. And that’s what I will strive for, eventually becoming one with that vision.

You are what you think you are. If you think you’ll never amount to anything and you see the future you as broke and working until 65 or beyond, then that’s exactly what you will be and your imagined poor future will become your reality. Likewise, if you imagine yourself to be financially independent and wildly successful, that’s the future that you’ll be making a reality. The future you and the you of today work together toward one common goal. Align them toward financial independence and it will be yours.

Conclusion

This article is a bit different that those I usually put together. I usually write about more concrete examples, as my journey to financial independence is based in the here and now on real numbers. But I think it’s also important to drift a little bit into the more hypothetical and philosophical areas of financial freedom and success, because recognizing and exploring the mechanisms that keep us motivated allows us to stay in control of our destinies.

Although I’ve never mentioned in my writings that I believe this future me exists where I’m already financially independent, I usually mention it to people I meet in person. This vision is a backbone of my own success. I 100% believe in this future me, where I’ve already achieved the wealth and success I’m currently striving for. It’s simply my job now to meet that future me and make tomorrow’s vision today’s reality one step at a time. Though I think it’s a foregone conclusion, I also realize that the paradox that exists means the me of today has to continue to putting in the hard work necessary to give life to the vision.

The power of belief is not to be underestimated. Envision what you want and go after it with all that you have. Once you have complete faith and optimism on your side, nobody can stop you from achieving your dreams.

Are you already mentally financially independent? Does a future you exist, motivating you to become that person? 

Thanks for reading.

Photo Credit: iosphere/FreeDigitalPhotos.net

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148 Comments

  1. Wow. This reminds me of a time travel movie. Let’s name it “Back to Financial Independence”.

  2. I think it is also important to enjoy the process and the ride getting there but, I fully agree with your statement “The power of belief is not to be underestimated. Envision what you want and go after it with all that you have. Once you have complete faith and optimism on your side, nobody can stop you from achieving your dreams.” Very well said! Keep the faith.

  3. Truly inspirational stuff. I very much enjoy your writing and how optimistic your outlook on life remains. After finding you through MMM’s comment section I have began studying up on Dividend Investing. I find it fascinating. Thanks for all the hard work you put into each posting.

  4. FF,

    It’s absolutely important to enjoy the process. Life is a journey, not a destination. Likewise, financial independence is the same. I actually wrote an article a while back on how FI is a journey and a destination, where it’s important to enjoy both.

    But on the journey to the destination it’s important to always have faith and belief in yourself. You will one day become the vision you see for yourself.

    Best regards.

  5. Hi Jason!. Yes, quiet a different post from your usual line. At first, when I read the title I though “oh!, maybe Jason finally won the lottery and will now discontinue his quest!” 😉 I’m glad you won’t. As you know I’m following a very similar path and now I cover almost half of my ordinary expenses. I will consider myself financially independent when I reach three times the income I get now from dividends. That’s still a long way to go for me. I’m not as young as you are (I’m 43 now). Keep the good posts!

    http://www.dividendogma.com

  6. Great read but you know my mantra… “don’t ignore the present you at the expense of the future you.” You seem to have a great balance these days as “non-essential” spending has come into your monthly income/expense report more frequently these days. I think it’s great. The key as you mentioned is about staying consistent/persistent. While we all experience the ups and downs of life, one thing that I want to remain consistent is my monthly contribution to my dividend stocks. So far so good on that front. Keep up the great work.

  7. Woodreaux,

    Thank you for the kind words there!

    I wasn’t sure how to put this idea in writing. In my mind, the concept is crystal clear and I can actually see what I’m aiming for. But it’s tough to convey that in a clear and concise way with words. This was the best I could do right now.

    Glad you’ve stumbled upon the blog and dividend investing. I hope you find as much success with it as I have. It’s a very tangible way to about achieving financial independence.

    Take care!

  8. Great vision Jason,

    Without your vision and without the dividend income, you are already financially independent because you are doing what you like to do – writing, which rewards you well enough to cover your expenses. Dividends are bonus now. You are a great inspiration for thousands of us to start investing and create a freedom vision. Keep it up your good work.

    My freedom journey started in 2012, and every month I am making a small step towards my vision – $25000 by December 2024.

    Keep move forward..

    Regards,

  9. Jose,

    You’ll get there. The key is that you’re on the path and you’re making the moves necessary to bridge the gap between the financial position you’re in today and the position you want to be in. 🙂

    Keep it up!

    Cheers.

  10. DivHut,

    Right. It’s definitely not about ignoring anything. Rather, it’s embracing something. Embracing the position you want to be in, and aligning the you of today with that vision, so that the two eventually become one. It’s a tough concept to put into words, but I think it’s important to explore it. The belief must always be there, because without belief there cannot be hope. And without hope there cannot be success.

    Thanks for dropping by!

    Take care.

  11. Very good article! Personally, to be successful in most anything, you must have a belief in yourself, a goal, and the drive to make it happen. I like the analogy you presented here and the concept of reverse engineering. I set realistic goals for myself, such as my $200 in dividend income for this year. I’ve easily passed it at this point, but I knew I had to take baby steps in this long journey we are on. I’ve set a goal for $1000 in 2015, so I’ll keep setting small goals that eventually will lead to the main objective. The key, IMO, is consistency over time and not allowing yourself to burn out or give up. I can definitely visualize myself with an early retirement and very comfortable financially in my early 50s.

  12. FJ,

    You’re right. I’m about as close to financial independence as one can be without actually living off of passive income. Although, all the same, the vision I had of being able to write for a living was there all along, motivating me to make the mirage a reality. I’m not financially independent quite yet, but this sure makes the journey to the destination a lot more enjoyable. 🙂

    Keep up the great work over there. $25,000 by 2024 would be fantastic. I imagine that my own goal of $18,000 by 2022 puts me on a somewhat similar track to yourself.

    Best wishes!

  13. Powerful perspective, Jason. Empathizing with a future you is clearly very motivating. Future me is still working, but probably not in an office or for anyone else. Future me is spending more time working on creative endeavors like music, textile arts, and gardening.

  14. Congrats on where you are in life. Just don’t get over excited about financial independence. It never is what you expect it to be. Wealth has its own burdens and stress levels associated with it. Take the time to enjoy life along the way. In the end, all you have that matters is value of time well spent.

    I wish you the best.

    Respectfully,
    Dennis McCain

  15. I sometimes try to envision my life in 5 or 10 years, and I am now doing it in a financially secure frame of reference. In 5 years, we could be debt free, except for the mortgage. In 7, perhaps we have the mortgage paid off, too. In 10, perhaps we are ready to retire. I like thinking about how my life will (or could) change based on those scenarios. If we are debt free, that means I don’t have to work. What would I do if I didn’t have to work? Would I choose to work part-time to further advance our financial goals or would I stay home? Being able to look ahead to the future like that is motivating. It’s also refreshing and exciting, while I am surrounded by a job I don’t love.

  16. Another inspiring post Jason. I always envision myself reaching the mirage you are talking about and its not easy walking on that dessert but as you do it on a day by day basis you learn to enjoy it. Its not for every one but I do know its the right path for me. To some people they see a dessert as a hot hostile environment, but it all depends on a person’s perspective. I have to admit that at first it was a foreign territory to me, I had to give up so many things but learning to let go opens up a door to another one. Less is more. A dessert becomes an oasis! Thank you very much Jason!
    FFF

  17. Agent,

    Absolutely. Without a goal you don’t know where you’re going. And without the drive and belief, you won’t get there anyway.

    Consistency is definitely important. Saving and investing for a few months here and there isn’t going to get the job done, if you want to become financially free.

    Keep up the great work. Wish you the best of luck with your $1,000 dividend goal for 2015. That’s not too far behind me, as that’s what I earned in 2011. 🙂

    Cheers!

  18. Kate,

    That’s a great future you. Spending time on what matters to you is what’s most important. That’s where happiness lies, not the paycheck. The future you and the you of today will one day merge, and you’ll be working on projects that bring a lot of value to your life.

    Thanks for stopping by!

    Best regards.

  19. Dennis,

    I definitely agree that financial independence isn’t a panacea to life’s problems. If you’re the type of person that’s unhappy with a BMW because your neighbor has a Mercedes, financial independence isn’t going to improve your life. Happiness comes from within, but how we spend our time also has a major impact on that. And FI allows you to spend your time how you want.

    I can say from experience that being able to spend my time on writing and investing as a type of “job” has brought about a tremendous change in my perspective on life and overall happiness level. I can only imagine that being truly free to pursue pretty much anything in life can only improve on that further.

    Thanks for dropping by!

    Best wishes.

  20. Ah yes, “knowing is half the battle” – I say this not to be cheeky (shout out to the UK readers), but to say that knowing what you want, how to get there, and what sacrifices need to be made to make it happen are really what is important.

    And let’s forget about the theoretical financial independence you seek, you’re living it day in and day out. You are doing exactly what you want to do, and just so happen to be making money while doing it. Freedom tastes good, and you’re happiness and well-being has reflected that through your writing over these last seven months.

  21. Kirsten,

    I suppose trying to anticipate our future is a form of escapism. But I think it’s also a form of “improvism” (I know that’s not a word). 🙂

    While it’s important to take each day as a gift, I think it’s also important to identify with a future you. The one where you’ve largely attained the things you want out of life and where you’re spending your time on what matters to you. But one should know what does matter to them. If you don’t have any idea as to how you’d spend your time if you have it all to yourself, that’s something to be worked on. I personally never have enough time to do all the things I want to do, so it’s always been mind-boggling to me when I hear how some people wouldn’t want to quit their jobs because “they’d be bored”. I’m not sure if that’s a lack of identity, but I suppose it’s tough to create your own identity when you’re spending most of your waking hours being what others want you to be.

    Thanks for stopping by!

    Cheers.

  22. That’s a nice thought process Jason. Too bad most people wait their entire lives before they reach 62 or 67 or 70 before they are financially independent.

    The journey to FI is pretty exciting though, isn’t it? I like the process a lot..

  23. DM,

    I love it! To stay the course we have to be able to conceptualize or visualize the future of where those sacrifices will take us. This post was a good reminder of one way to do that.

    I, too, am celebrating the payoff of my second of three rental houses that I vowed to pay off two years ago. Due to changing circumstances, I am also now able to join the ranks of DGI. Stop by and see what’s changed and where it’s taking us.

    I now enjoy about $1,000 more income per month due to having met my goal. Like you I’ve worked my proverbial butt off to get here. My present self is here today (24 months later) thanking my past self for sticking to the plan. My future self will be doing the same now that I get to start buying dividend growth stocks. Wait….who am I??? Beginning to feel like Scrooge with the past, present and future me’s.

    Thanks for the wonderful post today!

  24. Hi Jason

    As ever, love your posts. I think everyone who has started on their planned approach to the future is already Financially Independent. I believe it’s not just about having enough money or income, by about a state of mind. If you are actively taking steps to plan for your retirement (more than just accepting your employers pension scheme), and have a concept of saving to control your own future, then you are already independent of your employer or the state controlling everything about you. Even if you can’t earn enough to cover your bills, any investment income is more than you would have had if you had just spent everything for the today you.

    Once again, thanks for your inspirational posts, and look forward to keeping up with your great progress.

    Best Wishes
    FI UK

  25. W2R,

    Ha. Wasn’t that the motto of G.I. Joe? 🙂

    Freedom does in fact taste very good and it’s my intention on remaining free for the rest of my life. I always knew it would be wonderful, but now that I’ve had a glimpse of the possibilities I’m more motivated than ever to spread the word, educate, and inspire others to reach their own version of freedom.

    Appreciate all the support. I know 2015 is going to be another exciting year for many of us. Keep it rolling!

    Best wishes.

  26. DGI,

    The journey is very exciting. I’ve found that to be the case all along, and perhaps most so these days. But I’ve done things I never thought I could/would do and I’ve learned things that I thought was beyond my comprehension. And all of these experiences have made me a better, stronger, and wiser person along the way. It’s wonderful.

    I know there’s some software or app out there that will take your picture and “age” you so that you have an idea of what you might look like 30 or 40 years down the road. Kind of hokey, but that might serve some value for those that lack the ability to envision their future. I had a hard enough time running around a dealership and catering to multiple parties for 50 or so hours every week at the dealership at 30 years old. I COULDN’T IMAGINE doing that at 60. Not only would I be physically worn out, but mentally so as well. Just because you love what you do now doesn’t mean you’ll love it for another three or four decades. Financial independence allows you to change your mind without consequence. Try new things. Learn. Grow. Change. Be a better you. That’s what it’s all about.

    Best regards.

  27. Curtis,

    That’s fantastic there. The past, present, and future yous are all aligning together to make your future better and brighter. That’s wonderful, isn’t it?

    Hard work pays dividends, literally and figuratively. Sounds like you’ve already figured that out and then some. Keep up the great (hard) work! 🙂

    Best of luck with the new direction with dividend growth investing. Sounds like you’ve done well with rental properties, while dividends will only add to your passive income and improve the overall passive nature of it all.

    Cheers!

  28. Great stuff. It always boggles my mind that people want to work till 65 THEN do their lifelong dreams. Why wait till then? It’s far better to retire earlier and enjoy your life when you’re young.

  29. FI UK,

    Absolutely. It’s about a state of mind as it is about anything else. You can earn $1,000,000 per year in income, but if you lack the state of mind necessary to put that money to work for you and imagine a future where money doesn’t really matter, you’ll always be beholden to those paying you that $1 million income.

    Appreciate the support and kind words. Glad you enjoyed the post. This one took me a lot longer than usual to really put together, as I had a hard time framing it just right. But I think the general gist of it is easily understood. 🙂

    Keep up the great work!

    Best regards.

  30. Tawcan,

    Absolutely. It’s a shame that more people aren’t attempting it. I’ve never said financial independence is for everyone, but I think a lot of people out there would love the opportunity. Unfortunately, they’re either not willing to put in the work or they just can’t imagine it to be possible. The latter of which I’m trying to change, while the former is a fundamental personality issue that I can’t really help. But the expended effort is obviously well worth the reward.

    Cheers!

  31. Awesome! I think 99% of people don’t have a plan, or don’t know what to do to get there. If you asked most people how much they would need to retire, and why – they wouldnt have any idea. This is a good time for me to reassess, recalculate, and plan now.

  32. FFF,

    It’s definitely not the path for everyone, but I know for sure I’m walking the exact path I should be if I want to achieve my dreams. As I once wrote, one must question whether the bigger sacrifice is living below your means or working for most of your life. I’d say most others are actually going to sacrifice far more than me over their entire lives. They’ll then question how I got so “lucky” so as not to need a job, forgetting that the seeds were planed long ago. It’s a shame, but I’m doing all I can to spread the message.

    I’m glad you’ve found your oasis in the desert. It’s out there if you’re looking for it. 🙂

    Cheers!

  33. envisionhappy,

    I agree. I just don’t think planning for the future is something people place a very high priority on. Perhaps to their own detriment.

    I never planned at all throughout my 20s and I found myself in a very precarious situation. Failing to plan is planning to fail.

    Thanks for stopping by.

    Take care!

  34. Awesome post DM. I’ve often though about this idea and how it’s really one of the biggest reasons most people don’t do enough now to set themselves up for the future – they don’t think about this actual person in the future that is themselves! And that future person is real!! I always have some trouble keeping this idea front of mind and am always looking for ways to do so, but you’ve put this into words really nicely. It’s no wonder you’re tracking along so well towards your goal when this is such a huge part of your mindset!

  35. The difference between success and failure is that the successful folks never give up. You’re close to achieving true concrete financial independence. Just stick to it and you’ll get it! Great post as always.

    Cheers.

  36. I love this post! I think of my journey every single day to keep me motivated! I think just as you that the belief is incredibly strong and can take you places you wouldn’t believe possible(have you read “The Alchemist by Paulo Coelho?). I go to sleep every night thinking about my journey and waking up the next day filled with motivation and energy to reach my goals.

    Graduate as number 1 in class (think you call it validictorian or something?)
    Work as much as I can during my education
    Become one of the best construction engineers here in Sweden
    Live frugally and invest as much as I can of my hard earned money
    Have a yearly dividend income of $25 000 by the time I’m 40 (14 years from now)

    You all guys out here i the blog world keeps me motivated! I’m thanking you all for sharing your wisdom with us!

  37. If you don’t believe you will be financially independent then who will right? If you can’t indulge yourself in what 2020 you would be doing, it would take away from your imagination of how you plan to live your life and enjoy your journey.

  38. Hi Jason,
    Nicely done. You continue to inspire me.
    “The decisions he makes aren’t based around money at all, but rather maximizing time and happiness.”
    An excellent goal.

  39. Jason,

    That future you is absolutely real. And the you of today will one day meet that person. Will you like what you see? Will the future you be proud of the you of today? These are things I think about. Not every single minute, but it’s certainly part of my thought process.

    Glad you enjoyed the post. I’ve been wanting to get around to this subject at some point, but sometimes the words just aren’t there.

    Thanks for dropping by!

    Best regards.

  40. Henry,

    Agreed. I’ve had many points in my life when giving up would have been easy, where bad decisions put me in a really tough spot. But I always fought against that, even when, at times, I was my own worst enemy. And willing myself past my own mistakes as well as the hardships others placed upon me made me who I am today, which is to say stronger, smarter, and more determined. I think anyone who’s fought through hardship knows how good it feels to come out the other side victorious.

    Appreciate the support. You’re doing great over there as well. Wish I would have started as early as you did! 🙂

    Cheers.

  41. Martin,

    Glad you enjoyed it. This post was special to me. I’ve been meaning to write it for a long time now, but just never could get the words together just right. I’m still not sure it’s exactly what I wanted to say, but it’s good enough. 🙂

    I know exactly how you feel about waking up with motivation and energy. I feel the same way. I’ve never been a morning person – I’m still not – but I do wake up with a clear mind, knowing exactly what I want to do and how I’m going to go about doing it. Knowing that every day is an opportunity to better yourself is such an energizing feeling. Makes you want to almost attack the day.

    Sounds like you’re doing fantastic over there. $25,000 in dividend income by 40 would be a wonderful accomplishment. That sets you up for a pretty easy life, where the decisions you make from there won’t really revolve around money much anymore. That’s pretty freeing. 🙂

    Keep it up!

    Best wishes.

  42. Steven,

    I have a hell of an imagination. Sometimes it gets the best of me, but it sure makes the journey more fun. 🙂

    But you’re right. If you don’t believe in yourself, who will?

    Thanks for dropping by!

    Take care.

  43. On of our issues is that we haven’t quite decided who we want our future selves to be. But we’re trying to do things now that will give us options in the future when we might have a little more focus and direction.

    Once I have a plan in place though, I never doubt that I won’t be able to follow through. I might decide to change course, but hopefully that will be because I’ve figured out something better that I want more.

  44. Nice article. It’s important to look beyond the material and into the overall experience of attaining FI or anything for that matter.
    Feelings are the currency of the human experience. You must have a yearning to achieve your goal(s) otherwise, as you wrote, you will not achieve it.

    All the best to you.

  45. Hi Jason,

    I was just wondering if you ever looked into the downfall of not paying into Social Security and Medicare? Assuming you completely stop paying payroll taxes (social security and medicare) on job wages and only taxes on dividend income by age 40. Would you have enough credit to qualify for Medicare? Is this a concern to you? I am asking because one day I would also like to retire early but by age 60. I think by than I will be qualified for Medicare. Your thoughts are appreciated.

    Thanks,
    Frank

  46. I like this. The mind is a powerful thing, and combining motivation and a positive attitude creates a perfect storm of success.

    The truth of the matter is simple: there is very little luck in this world. Everyone living in the United States (or, quite frankly, any first world nation) carries with them a hell of a lot more control over their lives than they may think – or even want. People’s lives are a direct result of what they put into them.

    It may be convenient or easy on the psyche to blame failures on “bad luck”, but there is almost always something that we could have done to change the outcome.

    Your successes and failures in life are a direct result of the choices that you make. If you expect your life to fall apart, then it probably will! If you expect to retire by 40, you’ll be FREE AT LAST by the time that you are 40.

    Count on it.

  47. Emily,

    It’s definitely important to envision what you want out of life and what that might look like. I would bet most people don’t have a real clear idea of what they’d do if they all of the sudden didn’t have to worry about a job or similar responsibilities any more. But you have to ask yourself tough questions, like who are you? We’re more than our jobs. 🙂

    Thanks for dropping by!

    Cheers.

  48. Dylan,

    Absolutely. You must look beyond just the numbers and really decide who you are and what you want out of life. Only then does the journey become visceral and much more worthwhile. I talk about the numbers a lot because that’s measurable progress, but this journey is much more than numbers. It’s real life.

    Thanks for sharing! 🙂

    Best wishes.

  49. Frank,

    Medicare requires you to be over 65 years old and you must have paid Medicare taxes for at least 10 years. So one just has to make sure they work (and pay Medicare taxes) for at least 10 years.

    I hope that helps!

    Cheers.

  50. Steve,

    What you believe is possible and strive toward is very likely what you’ll be. I’d say luck certainly plays a part there, as I could have just have been as easily born in Bangladesh instead of the US. That’s winning the “ovarian lottery”, as Buffett puts it. But hard work is the bigger part of it. We definitely have control over our own destines in countries like the US in this day and age, which speaks back to luck.

    But, absolutely, if you believe you can retire early and do everything within your power to make that vision a reality, you’ll get there. You have to want it. You have to see it. And you have to work for it.

    Thanks for dropping in! 🙂

    Best regards.

  51. “I’m Already Financially Independent”

    Independent, Yes … financially independent, not really :).

    You still have a long way to go. Its only $6000 /year which is too low in these days and time. But its still good if it makes you feel happy !

    Keep working, there is lots of hard work to go.

  52. DM,

    Many years back, I read the book “Think and Grow Rich” and the one thing that I always remember is the idea of a burning desire to achieve some goal. You may not know exactly what has to happen to achieve it, but if you take a “Failure is not an option” approach, the path to success will reveal itself as you make constant forward progress. There will be hurdles along the way, but a relentless commitment will ultimately lead you to your destination.

    Thanks for the post!

    MDP

  53. MDP,

    “…but a relentless commitment will ultimately lead you to your destination.”

    Agreed 100%. I’ve made mistakes along the way, but I’ve largely been relentless over the course of the journey thus far. And I think if you want something bad enough, the relentlessness will come naturally.

    Sounds like a good book. I’ll have to check it out sometime.

    And you’ve been a great example of relentlessness over there yourself, as you were tearing it up for most of the year. That hard work will pay dividends for the rest of your life. 🙂

    Thanks for sharing.

    Best regards.

  54. I love your website. Your story is inspirational and your goals an aspiration. I am not as young as you are but still try to save a lot and invest every month. It is hard making ends meet on a teachers salary in New York City. I have been dreaming of moving to a place where the cost of living is lower and affordable even if I am not able to find a teaching job. I hear good things about Texas…

    What would the value of your portfolio be in 15 years based on a 5 percent annual return and the current dividend yield, if you stopped making any contributions? Have you ever done that math? just curious…..

  55. “Great Scott!!” Haha, I like this perspective. It reminds of of a picture that I saw a couple months back of an older homeless man asking “Why did you rob yourself?”

    I have talked to many friends about this type of investing and I can see that it goes in one ear and out the other, yet they always complain about never having any money to do anything. They also complain that the wife and I hardly ever go out anymore, just kinda goes along with having a 8 month old. They don’t understand my way of thinking. Do I go out with the wife and have a carefree couple of hours to possibly feel like crap later? Or can I take that money and invest it where it will be able to give the whole family greater things in life?

    I’m sure that when my journey gets me to where you are currently a lot more heads will be turning, and like myself and many others have thought “I wish that I would’ve done it sooner”

  56. Great article and a nice departure from the sometimes clinical “I bought x share of z here’s y.” Don’t get me wrong, those are great reads too, but the process of becoming financially independent is quite simple: spend less than you earn, invest the difference. Lather, Rinse, Repeat. The greater the delta between intake and outflow, the more you can invest and thus the faster you’ll become FI.

    The challenge, is controlling the emotion and your habits along the way. I’ve been really getting into the idea of the past, present, and future self lately from a book (The Tao of Capital) and I love the concept! Basically, I want to look back in 1, 3, 5, 10 years etc. and have my present self give my past self a high-five, all the while knowing my future self is going to be setup for even greater success.

  57. Powerful and inspiring stuff, thanks!

    A year ago, I would never have believed in myself and what can be achieved financially just by planning and being focused. Now, I am really starting to believe. A couple more years saving and investing under my belt, I have no doubt that I will totally believe.

    The future me is still a little fuzzy, but I can see her and she seems to smile a lot already!

  58. Jason,
    Love it! Reverse engineering your future self, indeed. It’s funny, my brother always used to say that he was going to work until he died, and he did. Actually, not to bring you down, but he had a heart attack at work.

    Anyway, having a vision and sticking with it is really the way to go. When I started with my current employer, I told my wife that I would stay until I qualified for a 30 and out package. That date actually passed in August, but since it was such a (relatively) short time until my pension maxes out, I will be retiring the end of March. We did the things that made this possible such as paying off the house by the time I reached 50 and having money saved for our daughters to go to college, maxing out the 401k and Roth IRAs, etc. Goals, you have to have goals. Then you have to commit to them and make them happen. Only way to get to your destination. One step at a time, as they say.

    Now I’m trying to visualize my future wife and me. Will we be in Michigan or Florida? With both daughters here, it looks like we stay. But if we join you in the Sunshine State, our future daughters could always visit. At any rate, it’s going to be great. I have already gone on 4 day weeks to practice.
    Best wishes!
    KeithX

  59. Joe,

    Glad you enjoyed the post. 🙂

    I agree. Reaching financial independence is simple, but not easy. The process isn’t difficult to understand, but much like losing weight, it’s easier said than done. Human nature tends to get in the way of these things.

    “Basically, I want to look back in 1, 3, 5, 10 years etc. and have my present self give my past self a high-five, all the while knowing my future self is going to be setup for even greater success.”

    Couldn’t agree more!! Sounds like you will be giving plenty of high-fives! 🙂

    Thanks for sharing.

    Best regards.

  60. Weenie,

    Belief is really powerful. Once you believe in an idea, it can become reality. It all starts with believing.

    I think our future selves are smiling brightly, and for good reason! 🙂

    Cheers.

  61. I saw your comment regarding receiving $18,000 in dividends by 2022. Do you have a post with all of your future yearly goals? I am curious to see how you expect you should progress in the future.

  62. KeithX,

    That’s sad about your brother. Sorry to hear about that. You hear about those stories and never think it can happen to you or someone close to you, until it does.

    I have a a lot of respect for workhorses, and I’m certainly a hard worker myself. And I’m also keenly aware that our society wouldn’t function very well without all the people making it so. That said, I don’t think there’s anything intrinsically glorious about working your whole life for an employer.

    Just having the choice to retire in more than one spot is a pretty great opportunity. I wanted to move back to Michigan to be closer to family, but in my heart and mind Florida is a better place to live. But that will obviously vary depending on your personal circumstances. And I’m sure you’ll enjoy it either way! 🙂

    Best wishes.

  63. blahblah903,

    I don’t publicly project my goals that far out into the future because a lot can change between now and then. Same goes for any other goal I might try to project, and the accuracy might vary. But I like to publicly write down goals one year at a time because it’s easier to progress and track that progress that way. That said, it appears I’m on pace. 🙂

    Cheers!

  64. The whole time travel thing reminds me of Interstellar 🙂 If only we could travel through the 4th dimension and see ourselves in the future!

    But really, no matter how you spin the situation, you’re (as per the title) already financially independent. I consider the fact that you no longer rely on a day job a sign that you’re already free.

    You know, I had this roadmap to FI all worked out when I first started investing a year ago. I’ve had to scrap the plan and make a new one – my dividend income increased way faster than I had anticipated! That’s a first world problem if I ever did see one. 🙂

  65. That’s an interesting way to think outside the box, Jason. 🙂 I like the following quote from a Vsauce video.

    “You only live once, but living once means living many times as a series of similar but technically different people who know each other but only in one direction, and who can help each other but only in the other direction.”

    Some scientists say that time is the fourth dimension and if conscience beings are smart enough they will be able to escape the confines of time and look through it like flipping through the pages of a book. But humans don’t have that high level of mental capacity so we can only see time as a straight, continuous path.

  66. Amit,

    Glad you enjoy the website. I try my best to produce high-quality, inspirational content on a regular basis. Means a lot to me that there are readers out there like yourself that enjoy it. 🙂

    I’ve heard good things about Texas as well. No state income taxes like Florida. If I didn’t live in Florida, that would be one of the few other states I’d consider. Austin and San Antonio both seem nice.

    “What would the value of your portfolio be in 15 years based on a 5 percent annual return and the current dividend yield, if you stopped making any contributions? Have you ever done that math? just curious…..”

    I actually wrote about something similar not long ago:

    https://www.dividendmantra.com/2013/08/a-guaranteed-millionaire/

    Using your numbers, it would be a shade under $385,000. That’s using a simple compound 5 percent return. Dividend reinvestment should amplify that.

    Best of luck finding the right balance over there. I imagine it’s tough in NYC, which is why I’m in a low COL area. Trade-offs with everything, however.

    Stay in touch!

    Best regards.

  67. Steve,

    I need a DeLorean. 🙂

    Heads will probably turn quite a bit more when you get close. Imagine your friends’ reactions when you tell them you’re retiring early. That’ll be priceless.

    Keep it up!

    Take care.

  68. PIM,

    Well, I’m not actually financially independent. The article was about visualizing a future you who is financially independent and striving toward that. So the title is referring to this “future me” that is FI.

    I thought the title might throw some people off, but the content has all the answers. 🙂

    Take care!

  69. Liquid,

    I like that quote. I’ve never heard it before. Very true and very insightful. Thanks for sharing that. One of my new favorites. 🙂

    That’s a really interesting thought there about time. The recent movie, Interstellar, kind of went down that path, where time didn’t exist in a linear fashion in certain aspects. Imagine being in a position where you could pick and choose moments to revisit or change. Really interesting. I mentioned a paradox in the post, but I wasn’t necessarily referring to the paradox involved in time travel.

    Of course, time as we know it is heavily associated with light. Some of the far-off galaxies that we see through a telescope are actually like looking back in time, because their images took so long to get to us. Really weird when you think of it like that.

    Thanks again for sharing the quote!

    Best wishes.

  70. Seraph,

    Ha. No spinning. If I stop writing, I stop earning money. Nothing “independent” about that. But I’m working my way there. 🙂

    That’s great that you’re ahead of where you wanted to be! Stick with it and I’m sure you’ll continue to surprise yourself to the upside.

    Thanks for dropping by.

    Cheers!

  71. DM,

    Great article – definitely don’t mind you having more of these, as they help us reflect on where we want to be, making sure we are taking accurate steps to get to that future self as well. I had a crazy idea in my mind to be financially free by 30. This gives 3.25 years-ish left and I have projected dividend income aiming closer to the $4.9K mark – obviously very far away. I think there are a few things that I am on track to make happen to burst through some limits, and am excited for what’s to come.

    Goal setting is huge, goals help alleviate a lot of the aimless walking that we may do in our lives and I couldn’t stress the importance of goal setting enough. It’s then all about the experiences that take you there and grasping as much out of life as possible on the way as well.

    Thanks again Mantra – definitely being apart of this realm/community has been satisfying – I love writing and giving myself to these articles – 2015 is all I can say, very excited!

    Talk soon DM – glad you’re doing well.

    -Lanny

  72. Hi DM,
    Just started following this blog and its certainly providing myself with inspiration! I (25) just started my own journey towards FI, and despite only having a few thousand in shares currently, I can see how easily the numbers seem to add up. I’m investing in Australia, and whilst many of the stocks you talk about are completely unknown to me, I can see how you make the choices and can see how the value you find can be reflected in stocks on the ASX.
    Keep up the posts, always a great read!
    Cheers,
    James

  73. Lanny,

    Man, that would be great if you could reach FI by 30. That would be up there with some pretty legendary individuals, like Pete and Jacob. I’m pulling for you! 🙂

    Setting goals is indeed huge. In fact, it’s necessary. Trying to achieve anything in life without goals is like driving down the road without signs or a map. You’re basically lost. You have no idea where you’re going or where you want to end up. And you and Bert have been great about setting aggressive goals and largely meeting them. Keep it up! 🙂

    Thanks for stopping by.

    Best regards.

  74. James,

    Congrats on starting your journey at 25! That’s fantastic. At 25, I was worth less than $0 and wasn’t even thinking about becoming financially free. I only knew I was unhappy in the auto industry at that time, working way too many hours. I wouldn’t see the way out for a few years yet.

    Glad you find inspiration here. That’s exactly why I write and share my journey with the world. You’re changing your whole life over there. The you of 35 years old is going to be extremely thankful that the 25 year-old version of you is doing what you’re doing. You’ll have so many options at such a young age. Keep it rolling!

    Best wishes.

  75. yeah I read it but it was such a fantasy letter about you and your dreams :). Ofcourse I cant read every word of it since its all about The future old DM.

    Surely different article but lengthy nevertheless. Not among your good articles but anyway will see what you write next (about investing is what I would like to see).

  76. Hi Jason,

    Great topic, thanks for sharing the DM mindset.

    When I was back at Uni (10 years ago) I used to think that positive self believe was overconfidence or arrogance, and I didn’t give any credit to the power it possessed. I’m glad to say that when I opened my mind to it and practiced it, I found the power it can generate.

    One of my freakiest examples was a couple of years back when I was Best Man at a wedding. I had the dreaded best mans speech to prepare and I was intensely nervous about it. To put it in perspective, I used to be scared of public speaking and would avoid it at all costs. The wedding was in front of 150+ people too. In the build up to writing and practicing, I was reading a lot of Steve Pavlina and practicing his positivity approach, smiling when I’m talking, acting like you’re confident. Fake it until you make it type of thing.

    Low and behold, it worked. During the wedding day, people kept telling me how cool and calm I looked, and said things like aren’t you nervous. I faked it but believed it when I said, “No I’m fine. I’m excited and it’s going to be a lot of fun.” I believed myself. I delivered the speech and I loved it. I had a good reception and a lot of positive comments afterwards,

    I know it’s a little off topic, but I suppose what I’m saying is, I totally subscribe to this way of thinking. I’m still learning and trying to develop my mind, but the older I get, the more I realise how amazing it is. We can manipulate ourselves to have unbelievable outcomes.

    It’s nice to be FI isn’t it! 🙂

    Huw

  77. Well said. I feel much the same way. Mr. FW and I are so committed and focused on our goal of hitting FI and moving to a homestead that we’re already there in our minds. It’s easy for us to stay on frugal autopilot and just keep saving and investing until we hit that date in 2017. You’re so right that once you truly visualize it and focus on it, the castle is already built! Awesome post!

  78. “Financial independence is nothing but a foregone conclusion in my mind. It’s actually already happened.”

    YES!! YES!! YES!! A superb way of thinking. Just found your blog and what a first post read 😀

  79. Hi Marty McFly, oupss Jason! 🙂

    It seems like you found the Grays Sports Almanach! 🙂 (ahh Back to the future was such a great movie)

    You are so right indeed. I’ve always achieved success in my life because I had a dream, a goal. And I always made sure to pave the road to my success, picturing myself in my mind as being already there.

    Setting goals and vizualizing ourselves being successful at reaching them is of most importance! Athletes use that technique all the time. It gives confidence and with confidence we can achieve a lot.

    I still can’t believe I’m now earning more than a 1000$ per year in dividend income and that I have achieved that in less than a year of work. I now aim for 2000$ and I picture myself as completely free at 45 (12 years from now).

    You’ve already achieved a lot yourself and I would have loved that my future me would have come to kick my ass 5 years ago! 🙂

    You’re halfway there already. Keep the good work. You’re an inspiration for all of us and in fact the future you is the one who kicked the ass of the future me so he could go back in time and kick my own ass! I Know I’m not the only one here in that situation.

    Cheers!

  80. Hi Jason!

    What do you think of that the BBL spin off South32 will probably be listed on the Australian stock exchange and so will your spinoff shares be? I’m afraid the brokerage if I want to sell them will be very high for that foreign stock exhange. There won’t be that many spinoff shares neither, do you think South32 will pay a dividend?

  81. Congratulations on a very personal and difficult subject to articulate. One other big word and concept that should be added is discipline. Most people I come across lack it. They talk a good game (and I have been as guilty as any on more than one occasion), but lack the follow through. when I go out on walks and observe the garbage put out on the front lawns for pick up, it always amazes me to see the 3 year old tv’s discarded for the next new one. It is really a pet peeve of mine to see the waste in time and money that this country is used to and encourages. I could easily afford a new tv every 3 years but would rather watch a 20 year old version and save the money. Continue the good work!

  82. I am right there with you. I am also about 8 years away (targeting age 45). I can picture coaching my kids teams, taking slow vacations, and relaxing instead of worrying about work. I can do all of that because my portfolio will be enough to support all of my goals by that point.

  83. Great post! Visualization, and setting goals is arguably the most important thing you can ever do in life! Most successful people have a constant goal to meet. Once that goal is met, it evolves into something even greater. I have experienced this in my own life. It is also nice to see tangible results to keep you motivated. This is why dividend investing is so fantastic. When that check lands in your brokerage account, it is REAL money that you can cash out, reinvest, buy groceries with, ect. I wish more people would realize the value when it comes to investing instead of brushing it off as gambling, or something that only rich people can be successful at. This is the additude of the majority of baby boomers that i work with. Most seem to have no clue on how to invest, what their investments are doing, ect. This motivates me even more to make a diligent effort in my 20’s and 30’s so that when i reach their age, I will be in a COMPLETELY different position.

  84. Deep, so deep I almost fell asleep (<– paraphrasing old song). Good rant DM. It's good to teach people why they need to make goals.My future self thanks your past self for teaching other people's future self that they exist.

  85. Huw,

    That’s a great story there. If you tell yourself something over and over enough, it becomes reality.

    You hear this a lot in other areas of life, such as when people lie often. They tell themselves a lie over and over again and believe it’s truth. So when they lie, they don’t actually believe they’re lying. They actually talk themselves into an alternate reality. Perception is oftentimes more important than the truth.

    Same goes with success. If you tell yourself that you’re going to be successful over and over again, you’ll have no choice but to believe it. Then the actions you commit from that point forward will all be aligned with that perception. I truly believe without a doubt in my mind that I’ll be financially independent, so to think otherwise would just be silly. Everything I do is aligned with that goal, so I can’t imagine failure. There are setbacks along the way, but these are nothing more than challenges to be overcome.

    Thanks for sharing the positive perspective! 🙂

    Best wishes.

  86. Mrs. FW,

    That’s fantastic. In your minds, you’re already there. It’s a foregone conclusion at this point. So the FWs of today are simply allocating resources until you meet the FWs of 2017.

    It’s funny, but I imagine this me of 2022 looking at his watch. Like “What is taking this guy so long?” Something like that. He’s already there, and I’m simply catching up.

    You guys are doing great. Keep it up!

    Cheers.

  87. So I have a question for you, and maybe you can write more about this. I am not asking this in any condescending manner at all. I just want to understand the thought process you have gone through. Why do you not continue to work for an employer, even if it is at a job that does not bring satisfaction. Even if it was for another one to two years, your income from employment (in addition to your side writing), would add all that much more to your account and grow it that much faster. Or, why not just work until you are 40 and compound that income. You could really see your dividend growth really sky-rocket with the additional money from a paid job. You stated previously that you were making somewhere around 50k annually. (Possibly less, with business changes that affected your income). Even so, that is a lot of money not going into your coffers. You already know what your end goal is, retire by 40 with x amount of dividend income. Why not sacrifice, in the employment arena, for the ability to reach that goal even faster? Thanks for your time, love your blog, and appreciate your transparency.

  88. Allan,

    Ahh, I WISH I could find that Almanac. 🙂

    There’s a lot of ass kicking in there, isn’t there? That’s basically what it is. The future you, once you visualize him/her is motivating the you of today to strive toward whatever that future version of yourself is enjoying. And that works for most anything, athletes being a great example. I was a competitive bodybuilder back in my youth, and in my mind I had always already won a contest before I ever even trained for it. So I visualized myself winning the trophy and doing interviews and all that. So when I actually won, it wasn’t a surprise at all. I had really already won before I ever even entered a contest. It’s the same with financial independence. If you already know that you become financially independent by a certain time frame, then that’s the truth. That’s the future reality. And the choices you make from there are simply merging the two realities – the one of today and the one of the future.

    It’s certainly a way to build confidence, but it’s also a way to stay consistent. After all, we don’t want to keep ourselves waiting, do we? 🙂

    Thanks for dropping by.

    Best wishes!

  89. Mr Zombie,

    Glad you found the blog! This was a bit of a different post than I usually lay out, but it’s a topic I’ve been meaning to visit for some time now. Glad it was your first exposure. 🙂

    Stay in touch!

    Take care.

  90. swedendividend,

    “South32’s head office will be in Perth, Australia, with a regional head office and global shared services centre located in Johannesburg, South Africa. South32 would be an Australian incorporated company but, reflecting our global shareholder base, is intended to have a primary listing on the Australian Securities Exchange, a secondary listing on the Johannesburg Stock Exchange and a standard listing in London.”

    Emphasis mine.

    Source: http://www.bhpbilliton.com/home/investors/news/Pages/Articles/New-Company-to-be-Named-South32.aspx

    Cheers!

  91. wtd7576,

    Absolutely. I substituted the word consistency, but it’s all the same. It’s about visualizing where you want to be and willing yourself there. It’s just like losing weight. People may talk about losing weight, but when it comes time to eat the discipline goes out the window. Same with saving and investing. Actions speak louder than words, and only consistently applying the principles necessary to get you from Point A to Point B will allow you to be successful.

    Thanks for dropping in!

    Cheers.

  92. Vawt,

    “…because my portfolio will be enough to support all of my goals by that point.”

    I notice you used the words “will be”. Not “may be”, “hopefully will be”, “might be”, “should be”, etc. It’s a foregone conclusion. 🙂

    Enjoy the coaching, vacations, and relaxation! It’s waiting for you.

    Best regards.

  93. Josh,

    You will be in a very different position. Not only that, but you’ll have your whole life ahead of you. That gives you enormous opportunity to change and grow as you see fit.

    Financial independence isn’t the end. It’s the beginning. At that point, you can take on projects that mean something to you, add value to the world in a way you see fit, and spend your time however you want because you’ll own all of it. 🙂

    Cheers!

  94. Joe,

    I put you in a trance, huh? 🙂

    Glad you enjoyed the content. I suspect our future selves will all be very grateful our current selves are making these moves. Each step is closer to the top of the mountain and further from the base.

    Cheers!

  95. David,

    Right. That’s a good question. And I’ve addressed it before a few times now.

    Financial independence is ultimately about ownership of your time and your freedom. If a job that you don’t enjoy is wage slavery, then financial independence is freedom. The sooner one can escape the former for the latter, the better. Some don’t even believe financial independence in the sense I prescribe (covering all of your expenses via passive income) is the best/fastest way to go about it, but building your own business or something along those lines is. Either way, it’s about maximizing time and happiness.

    I was able to leave my full-time job for work that I have a lot more passion for – writing. And my income hasn’t really declined all that much, thanks to years of hard work and building a platform here. Furthermore, the blog was growing to the point to where it was either writing or the auto job. I couldn’t do both anymore. To choose a job I didn’t enjoy over something I enjoyed immensely for a few extra bucks would really be missing the whole point of everything I talk about here, and writing has way more potential for income anyway, in my view.

    It’s really a personal decision how you go about life, money, financial independence, and spending your time. That’s why personal finance is so “personal”. But I would never recommend someone work somewhere they hate over something they love if the monetary difference isn’t that great. If we’re talking making $200k/year and being able to achieve FI in a very short period of time (a few years or so), that’s one thing. But giving up $50k in the auto field wasn’t really that big of a leap for me, especially when I was able to visualize success with writing.

    Hope that helps!

    Best regards.

  96. Just wanted to say congratulations on your success so far. You should be, and are, an inspiration to others! Wishing you success as you continue you journey. I will not comment on your goals, they are yours and you are meeting them, that is all that counts.

    DJ

  97. DJ,

    Thanks so much. Appreciate that. I’m honored and humbled to be in a position to inspire others. Financial independence is extremely realistic for so many people out there if they’re willing to make the changes necessary to achieve it.

    I hope you are on pace for your own goals. 🙂

    Best regards.

  98. Hi Jason, Just curious about you thoughts on BBL. I have 27 of your freedom fund in my portfolio. BBL is tanking and some analysts out there are projecting a $25 share price. Any thoughts? Best to you and Claudia, Dan

  99. Tommy,

    Indeed. Once you know what you want and envision it, you’ll have no choice but to work toward it and make it reality. You’ll become what you thought you always were, thus self-fulfilling the prophecy. 🙂

    Cheers!

  100. Dan,

    Your previous comment said it best:

    “Also BBL is a great big company that will fluctuate but in the meantime it is paying a great dividend which I am reinvesting into more shares.”

    Which analysts are projecting a $25 share price?

    Cheers!

  101. Hi DM

    Your version of financial freedom is to be able to do the job which you love while at the same time using this income to invest in asset which brings about further passive income. You are doing an FI on compounding effect, that’s a multiplier effect down there which you have attained.

    Looking forward to see your 2015 goal and the challenges you have set.

  102. Hi Jason, I found it while web surfing, but cannot find it again. Maybe I was seeing things :>) … I appreciate you reminding me about my first comment. Best, Dan F. , Encino, California; and yes, there’s a McDonalds every half mile!

  103. I know what you mean there Jason….i’m a bit further ahead in my journey but i feel financially independent already it won’t be that far in the future that i really am – and i’ve also decided to live a bit more like i am. One of my goals is to travel to the places i always wanted to go and haven’t been yet so i’m putting that in action (slowly!) now rather than waiting til x years in the future. I’m doing well now and at the end of the day we’re only saving money in order to delay spending it. There’s no utility to money unless it is spent. This is all easier said than done tbh as i hate spending $ and really enjoy watching it grow unabated!

  104. Yours is a sound approach, Jason.One of the best ways to achieve a goal is to envision yourself having achieved it. The mind transforms when you do this. I quit smoking this way: just closing my eyes for ten minutes a day, envisioning myself having fun as a non-smoker.

    The stuff works.

  105. Hi DM,

    This is a somewhat esoteric post compared to your usual writings :). I liked it a lot though! When you feel like you are on the right track to meet your goals, I find it very encouraging to think about the future. It motivates me to keep going and do even better. On top of that, the satisfaction of knowing you are following the path you want, makes you happy in the present. All in all, it makes for a very enjoyable journey towards a very enjoyable destination 🙂

    In my book, financial independence is having full control of your time and making an income out of a combination of work that you enjoy doing. So, for me, you are already financial independent in the present, because you clearly like writing and analyzing stocks and you can earn an income from those sources without having a boss or the potential to be fired.

    Keep it up!
    Dividend Venture

  106. B,

    That’s a great point there. It’s kind of like financial independence on steroids…where you’re able to enjoy some of the reward now while investing for even more reward later. 🙂

    Appreciate the support. Looking forward to what 2015 brings all of us!

    Take care.

  107. Dee,

    Congratulations on your success thus far! 🙂

    Sounds like you’re striking a right balance there for what works for you and your situation. And that’s what’s most important. I think those of us seeking/attaining financial independence are getting utility out of money. We’re just spending it on freedom rather than a bunch of stuff. Different perspective is all, but the money is being used. And it’s being used in a much more meaningful way in regards to maximizing happiness, in my opinion.

    Thanks for dropping by!

    Best regards.

  108. Thoughts on what that means, exactly? Sounds like for a US-based investor it would mean favorable dividend treatment, although I’m not exactly sure what it would mean to try and buy/sell the stock on a foreign exchange. Then again, within 5 years a position in the company would likely be 1% or less of investments, so might as well hold on and enjoy.

  109. DB40,

    Congrats on that. That’s a difficult thing to do. I’m sure you’re far better off now for it. 🙂

    I know I’ve come across something in my time about visualizing your own success. For me, it just comes naturally. Always has, even when I was a kid. If you really want something, you’ll see it before you ever get there.

    Thanks for dropping by!

    Cheers.

  110. DV,

    Esoteric, indeed. I wasn’t sure how well it would be received, but it’s something I’ve wanted to cover for some time now. It’s the best I could do with it.

    “On top of that, the satisfaction of knowing you are following the path you want, makes you happy in the present.”

    Absolutely! Some people complain that the reward is all at the end of the tunnel, but it’s not really so at all. The journey itself is part of (most of?) the fun. You’re growing, learning, changing, and becoming more “you” every single day. Reaching financial independence is just one more step in life, becoming the you you really want to be.

    Yeah, I’m about as close to FI as one can get without being completely independent of active income. I still have to write and do some other things in order to make a living, but it’s certainly incredibly enjoyable. I’m blessed to be in this position, but I also know there was a lot of hard work on the front end. Like reaching financial independence, it feels like a blessed position to be in, but there is a ton of hard work that goes into it. Some people may question that hard work against the reward, but I can tell you firsthand that if FI is anything like my life now, every second of hard work is worth it. 🙂

    Thanks for stopping by!

    Best regards.

  111. http://ycharts.com/companies/BBL/dividend_yield

    According to this, it appears a 4.5% yield is roughly on the upper end for the past few years for BBL. Given a current yield around 5.7%, this implies roughly 27% upside if the stock only goes down to a 4.5% yield.

    Given a 10% discount rate, that’s somewhere ~2.5years.

    I was marginally interested before, but it’s getting close to the point where I can’t ignore it any longer. I don’t see a decline in structural demand in the need for most commodities (though oil is debatable on a 15+ year horizon). If it stays below 49 (~5% yield), seems to be a very solid buy with a terrific total return in the next 5 years.

    I need to read further about if/how the withholding for an ASX based stock would work. The demerger creates some complications, so I still need to think about that a bit.

  112. Ravi,

    Right. The favorable dividend treatment would be there because of the US-UK tax treaty (if the new company even pays a dividend). As far as buying/selling on foreign exchanges, I generally try to avoid it. It appears my brokerage, Scottrade, makes it somewhat easy to buy/sell foreign stocks with no extra commission fees. I’ve never done it, so I have no experience with it. Generally easy to avoid them and buy/sell ADRs, but I’m not sure if we’ll have a choice with this one. However, as you said, it’ll be a very small position for some of us, including myself.

    Cheers!

  113. Ravi,

    Yeah, I’ve never seen a yield this high for BBL during the entire time I’ve watched it and/or owned it. The same could be said of a few other stocks, however, due to rising dividends over the last few years combined with some panic across commodities.

    BBL appears to be in the bargain bin, from all I can see. I’m sure net income will be impacted during H1 results, but any disruption to earnings seems to be more than priced in here. And, as I stated during the last valuation, even if their earnings power is permanently halved, this is still a steal. I personally didn’t have any intentions on making it a large position, but it’s really cheap here. Mr. Market clearly hates this stock.

    Best regards.

  114. Great view on goals. You really do have to be able to visualize and believe in your goals. So long as you’re headed in the right direction, eventually you will get there (not sure where I read/saw that, but definitely applies here).

    As I’ve been doing my homework, it appears my next move (tentatively) will be into energy. Most likely into services/equipment or offshore drillers. Seems those two sectors have been hit incredibly hard (50%+) from some highs in the past year, although with considerable risk going forward.

    Two that really caught my eye in the first bucket are SDRL and RIG. Both have been pummeled by being over-leveraged and seeing the oil prices decimated this year. SDRL stopped the dividend, and RIG probably will soon. Most importantly, the stocks have been punished severely. For SDRL as an example, they paid $1 qtrly dividends, so within the next 5 years, I don’t see it unreasonable to perhaps find them resume a $0.50 dividend (2.00 annually). Based on current levels ~$12, yield on cost could be a whopping 16%.

    Serious margin of safety there.

    Further safety by the fact that the big oil majors could start buying up these companies while they are weak at a discount to book value. This would not be preferable to staying independent, but another element to add more safety.

    I don’t see a structural change in the industry which renders the sector un-viable in the future. Anyway, still doing the research to find the right play, but this case alone definitely warrants further analysis. There are definitely at least two situations which could turn a favorable return for getting in soon. Wish I had more cash!! I don’t want to keep dipping into savings like I have been lately.

  115. Ravi,

    I certainly think there’s some value in energy right now, though some stocks, in my view, could still move a lot lower. That said, I recently added to a stake in one of my energy investments. But I’d rather stick to proven, high-quality stuff here. And SDRL definitely doesn’t fit the bill.

    I was telling anyone who would listen to avoid SDRL over the last couple of months. I even wrote a comment not long ago over at Seeking Alpha describing their FCF. But all anyone wanted to talk about was the dividend. Funny how investors get blinded by that big yield. They must forget it’s cash money that can’t just grow on trees.

    SDRL is a poorly run outfit, in my view. They’ve been bleeding cash for a long time, and that was with high oil prices. I can only imagine what kind of trouble they’ll be in with low oil prices. Add in a lot of leverage and you run the risk of bankruptcy.

    If they turn it around, it could be a solid investment. But that’s a risk I wouldn’t want to take on, and no income coming my way means I’m not being paid for my time to wait it out.

    Cheers!

  116. Keep up the good work, DM. Having the right mindset is half the battle. I hope you don’t quit your “job” of writing this blog when your day of FI comes 🙂 When that day comes, it will be life as usual because the journey to FI is a permanent way of life, but won’t it feel good to know that you are working for fun, rather than for the money.

    As for me, I am also not actually financially independent yet, but I have the mindset to become so. I probably won’t quit my day job till my annual dividends can cover my expenses at least 2 to 1, maybe even 5 to 1, similar to the interest coverage idea, because stocks are inherently risky and there is always a risk dividends may be cut. If I can get a margin of safety of 5 to 1 coverage, that would be quite adequate for me.

  117. JTF,

    Thanks for the kind words!

    I definitely plan to continue writing long after I reach FI. I’m hopeful I can keep this up for many, many years. 🙂

    We all have to find a comfort zone. I would (and do) obviously feel comfortable with a level much lower than that, as achieving a 5-to-1 ratio would have kept me working probably well into my 60s. And that would defeat the purpose of everything I’m doing. But as long as you’re doing what’s right for you and you won’t be kept up at night, then more power to you!

    Best wishes.

  118. You definitely caught me with that title, good job. I also agree that the mindset must be present today to allow you the freedom later. I cannot wait till I reach FI, and Ill swing by Florida to grab a beer as to cheer to the FI lifestyle.

  119. RichUncle EL,

    Would love to grab a drink when you’re FI! 🙂

    Though, I rarely (don’t?) drink alcohol. Wouldn’t mind grabbing a Coke or something, though.

    We’re both on the path. It is an inevitability now. Just gotta keep cranking away!

    Cheers.

  120. Hi DM,
    You are certainly an inspiration for a lot of us….
    How do you generate income from your traffic? What ad platform?
    I also noticed your recent repeated investments in BBL, which I have owned for 2 years now. Do you know how newcorp will impact us, here in the U.S.? Will we receive ADRs or cash? Those cycles in commodities are quite a ride….but I feel that for the long term, u can’t get much better in this space….
    Keep inspiring us and congrats for your engagement 🙂
    Waki

  121. Waki,

    Thank you. Appreciate that very much. 🙂

    As far as my blogging income goes, I broke that out this summer. The information is still pretty relevant even if the income has grown:

    https://www.dividendmantra.com/2014/06/blogging-about-blogging/

    The information regarding the demerger can really only be found via BHP Billiton itself. Anything else is a rumor. That said, this is the most current information that I’m aware of:

    http://www.bhpbilliton.com/home/investors/news/Pages/Articles/New-Company-to-be-Named-South32.aspx

    I hope that helps! 🙂

    Stay in touch.

    Cheers.

  122. Hey DM, I’ve enjoyed reading your articles and following along here on your site. I’m doing something very similar (the investing part, not being frugal. my wife wont go for that). I have a question for you. How do you intend to be FI at 40 off of only $18k a year from dividends? Isnt that very little, especially since $18k in 10 yrs is like $12k in todays dollars? I probably missed something right? I’m thinking you were going to live off dividends alone and not work.

  123. JC,

    Glad you’re enjoying the site thus far. 🙂

    $18k in 2022 (eight years from now, when I’ll be 40) would actually imply needing almost $22k, factoring in 2.5% inflation. However, I find that CPI doesn’t necessarily work vis-à-vis for real expenses in the real world. At least, not for me. Food goes up quite a bit, but that can be countered with adjusting your diet. But my other expenses really haven’t. My auto insurance has decreased over the last few years. Health insurance fluctuates. Gas is cheaper now than it was a couple of years ago. My biggest expense – rent – has actually trailed inflation by a large measure. So it really depends. To just look at CPI and automatically assume that your expenses will go up by the same exact amount would be naive, in my view. That really assumes that you can’t adjust at all, which is a hallmark of this strategy and goal (retiring/becoming FI extremely early). To just sit around and watch inflation eat up your expenses with no action on your part is akin to sitting in the office and wondering why you’re still there 20 years down the road.

    Best regards.

  124. DM

    Your post is something that anyone who wishes to live a financially independent life needs to figure out for themselves. Our culture propagates this feeling of discontent if we are not conspicuously consuming. I am a teacher and I see this same unbalance of consumption and social referencing in my students who are totally stressed because they are in challenging classes, doing every extracurricular activity under the sun and expect to achieve at an “A” level. Furthermore, they are only satisfied to get into the most prestigious universities and go into crazy levels of debt. It seems we are starting over consumption habit at a young age in various ways.

    It is through the self reflection that you are modeling that folks can truly figure out for themselves what is important. Visualizing financial independence/retirement is critical to happiness when you get there. Furthermore, practicing financial independence is important. I am lucky with my job, I get extended periods of time off to practice retirement and pursue other interests.

    At age 51, I have made many frugal decisions and am basically financially independent. I go to work knowing this and it really changes my mindset and feel I am doing the best teaching of my career right now. I will be putting my chalk down at age 54 with a passive income of 110% of my current income. 70% will be from my pension and the other 30% is from dividends. It is interesting watching people’s reaction to someone in my financial situation. They think I won the lottery. There was no luck, just hard work and conscious decision making. One person asked me how I mananged to get to my situation. I told them my family lives on half our income and I invest to other half. They remarked that would be impossible for them to achieve, even though they make more than my family. The choices we make…

  125. Brad,

    Great comment. And congrats on your financial position. I know firsthand what kind of hard work is necessary to put yourself in such a spot. 🙂

    “There was no luck, just hard work and conscious decision making.”

    Amen. There are no secrets. You simply have to want it and make the correct decisions to get it. It’s easy to come up with excuses and think someone “won the lottery”. Much more difficult to actually do what’s necessary to win your own lottery.

    Thanks for sharing your story. Sounds like you’ve already envisioned your own freedom; thus, you’ll know exactly what you want it to be when you get there.

    Keep it up!

    Best wishes.

  126. Dawn,

    Thanks for the kind words. I certainly hope to be in such a position some day.

    It’s a shame that the public school system isn’t more proactive when it comes to teaching finances. Maybe that’ll change at some point. 🙂

    Best wishes!

  127. Hey there,

    Long time lurker and reader. I’m curious as to what your plans are for your family and if you are currently living on $18k/year. It sounds like you are earning a little over $50k and saving a little less than half that so that means you’re probably living on closer to $25k, granted your expenses may drop but often times if you’re planning on having kids they tend to go up – especially any unforeseen health issues. I had for a long time planned on a similar strategy until recently when I decided to do more investments into rentals for more cash flow quicker although it comes with higher risk and it’s relatively less passive. I still think it’s a better approach for me personally, have you explored the options and given it any thoughts?

    Best,
    Max

  128. Max,

    Appreciate the readership! 🙂

    We don’t actually plan to have any kids (and we cannot biologically). So that’s out.

    As far as expenses go, many of my current expenses will be dropping off the budget here pretty soon. I still think $1,500/month is a reasonable target.

    Rental properties are a great way to build income, but they’re far less passive than dividend growth stocks. I’m not even close to handy, so they’re just really out for me. I prefer REITs as my real estate play there. Though, I think an intelligent hands-on real estate investor can do much better with rental properties in the right market. Just not for me, however.

    Thanks for dropping by!

    Best regards.

  129. Hmmm,

    Yeah if you don’t have kids then it looks like your budget would give you room to continue your same level of expenses – once you’ve paid off your student loans, engagement ring, and car – you’d be at $1540 and I’m sure you could shave off a few more places here and there if you needed to.

    I suppose that’s part of my worries as well – I’m currently on track to have about that much within a year or two from rental income. However, with the SO who wants kids and my own desire to be able to fund more travel, more charity work (donations/scholarship funds), and an increased activity/amusement fund for extreme sports/yoga/martial arts/gymnastics I guess I worry that once I get there I’ll keep wanting more and more and not knowing when I have “enough”. Although now I’m living off much less than that proposed budget.

    I imagine in your budget your SO is also helping to pay for some things and has her own income that you did not include? As you hinted in your post of marrying budgets…. My SO is fairly frugal but it’s also because she never had money to spend and as her income increases I’ve noticed so has her spending – although granted a lot of it is going towards paying off student loans.

    I’d also like to see more details of your on-line income and how you’ve grown that over the years when you get a chance.

    Thanks again.

    Best,
    Max

  130. Max,

    Right. Some of those expenses will be gone. And there’s always the chance that we might live car-free again in the future. 🙂

    My significant other makes and spends her own money. It has neither a positive nor negative net effect on my ability to save and invest. If anything, I may be burdened (probably not the appropriate word) with additional expenses in the form of helping her along, if she desires to work less than full-time. So that may be something that pops up way down the road. We’ll have to adjust if that’s the case. Of course, many of my projections factor in $0 of active income, which is probably extremely conservative and unrealistic.

    As far as your situation goes, you’ll have to find the right balance. There’s few things in this world I’d rather own than my own time, and that includes “owning” experiences like travel. Just me. Everyone is different. With increasing wants comes increasing expenses, which requires increasing passive income. Always trade-offs.

    These articles might help:

    https://www.dividendmantra.com/2014/04/whats-the-bigger-sacrifice-living-below-your-means-or-working-for-most-of-your-life/

    https://www.dividendmantra.com/2014/09/dont-succumb-to-omys/

    As far as my online income goes, this article explains it:

    https://www.dividendmantra.com/2014/06/blogging-about-blogging/

    Best wishes.

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  134. I hear a lot of Napoleon Hill, Zig Ziggler and Anthony Robbins in what you are saying and you are 100% right. Zig said you have to be before you can do and do before you can have.

    The future you is the Be and to have that you have to do. I like the way you put it because it is more spelled out and easier to understand.

    I liked Zig’s saying also but it took hearing it quite a few times to understand it. Napoleon Hill also says a smiluar thing in that with out the picture of exacly what you want and expect it is hard to create the roadmap to get you there.

    He also says by doing these thing you are talking about you help your subconscious mind understand what you want and that it does not know reality from fiction.

    if you paint a vivid enough picture for it of what you want and work on making the subconcious take notice of your desires followed by lots of work and persistence, you can have anything you desire in life.

    The key to this whole thing is getting it to the subconscious mind that does not know any limit to bypass your conscious mind that knows everything you can’t do and because it does stops you from getting your true desires.

    if you can do this the plan is not as important as the why because you can always change the plan if you have a big enough why if the plan does not work.

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