What is your vision for your life? You only get one shot at this and every day is a gift! In medicine, I am frequently reminded of the brevity of life, and the gift it is to be alive every day.
Write down your vision! Go ahead. Stop reading and write it down.
Were you able to come up with a vision for your life? It is hard, right?
Of course your vision involves YOU. But does it involve God? Others? Stuff?
Take some time to define your vision. People who write down their vision are more likely to be or become millionaires. Interesting.
Get your family to write down their visions, particularly if you are married or have kids.
How much did stuff play into the vision. People do not really get things because of the thing. They pursue the house, the car, the job because of the way they think it will make them feel.
Now the hard part. Chart a course for your vision. Chances are this will involve money/assets, education/self-betterment, hard work, and a few unforeseen blessings. Do not obsess over the end prize to the degree that you stop having fun; laughing along the way.
One of the most stressful aspects of life is managing your wealth (or lack thereof), and as we say in medicine, this is a modifiable risk factor. There are many other stressors that are out of your control, but personal finance need not be one of them. Poorly managed money can destroy your family, and be an undue burden for a lifetime that impairs you from spending your limited time on earth with meaningful intent!
This is why I am an advocate for a component of your vision being ‘Financial Independence.’ If you are new here, this is where I explain that the nature of FIREd (Financial Independence. Retire Early. done), is one of freedom and peace. The Retire Early component need not be misunderstood as doing nothing, but instead the ability to do what YOU want to do with your vision as your spend your most precious resource: TIME.
My goal in spending my free time writing this to you is that you catch the FIRE! What if there were more you could do with your life if you weren’t under ‘The Man’ and his oppressive thumb?
The bottom line is that it is possible, my friends, to be a financially independent millionaire in the long term with only a few small good decisions every day! Even with a low salary! If you did nothing more than invest $458/month into low cost index funds in a Roth IRA from 22 years of age until retirement age, you would easily be a millionaire. Add on 3-8% 401K contributions per year with your employer matched funds, and you are easily looking at a 3 million dollar figure! Double this if you are married and both working!
This is classic compound interest at ‘average’ rates of return in the stock market. No wonder Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.”
If you are saving about 15% of your income, you will have a solid retirement, but only if you work until you are 67!
Mr. Money Mustache created this extremely helpful chart delineating how many years of work before you could be financially independent with a stash that would ‘never’ run out. (AKA The point at which you would be Financially Independent). Notice that it does not matter how much you make but the % of what you spend and save.
If you can’t save 15% or more as an American working class individual, you have a few choices to get there:
Budget and Spend Less. Better Yourself and Make More. Optionally you can work more than 40 hours per week. It is actually pretty fulfilling to do so! Get an extra part time job or ask for overtime where you can learn more and develop yourself, plus demonstrate to your superiors that you are a notch above the rest!
Besides, now that I am a father, I can see very clearly that I do not want to be financially forced to work overtime in the future, when I could be spending meaningful time with my children. Particularly when you are younger, it pays to work your hardest, longest hours, allowing for years of compound interest to build your nest egg on your path to financial peace and freedom.
Lastly, I started this blog 1 year ago (although new to posting on The Super Daddy), and I cannot tell you how impressive this readership is!! Exemplary. Some of you are legitimately showing up yours truly! I love hearing your stories and thoughts.
The goal is to reach financial independence at a young age so that in living like no one else today, you can LIVE like no one else tomorrow. I view money as an incredible but impermanent form of security to enable you to serve God and to transform lives. Why settle for a vacuous existence at the beach collecting sea shells?