Fast-tracking Financial Independence

Black man heading outThere’s a small, but growing, group of people fast-tracking their way to financial independence. Some people who’ve been really serious about their goals can stop working, if they want to, while still in their thirties.

I’ve run across three good blogs about this, one from someone in his early thirties, the second one from a mid thirties guy, and finally one from a sixtyish year old.

The steps are pretty simple. Save 50% or more of your income. Invest the savings in a low-fee indexed stock fund (and don’t touch it). Avoid debt. Nothing too radical about those.

Then, after saving 25 times your average yearly living cost (which has likely been dropping along the way) you’ve reached financial independence and can safely (without running out) withdraw up to 4% every year from your (accumulating) saving.

That’s the broad brush picture. Some like owning rental homes too, or not owning a home at all. The particulars vary from person to person, but they all follow the simple three-part recipe I just mentioned.

It seems shocking to the average overspent American, and even to those who aren’t overspent. The people who’ve done this lived well below their means, drove old cars, stopped eating out a lot, and that sort of thing, but they didn’t endure hardships. They lived and continue to live like their grandparents or great-grandparents did, simply and frugally.

“What if everyone saved more, consumed less, and worked less after financial independence?” some will ask. I’d say it’s not an issue because most people won’t do it.

Over the years I’ve been asked for advice on how to live the way I do (similar to the fast-trackers, but slower). I found that after sharing a few steps and mentioning they’ll need to live on a bit less money while increasing their available time and quality of life, no one I can think of really wanted to pull the trigger. That’s why I don’t think most people will change their work-to-consume mindset.

Most of the fast-trackers seem to find that after stopping real work, they do a similar amount of productive stuff each day, it just doesn’t feel like work anymore.

The like-minded people building financial independence might create a “successful revolution” that has nothing to do with protestors taking over the government, but more to do with an uncommon idea becoming common in a short period of time.

P.S.  A side benefit of all this is bringing people back to the rhythm of the planet. Anyone with a scientific background can see how quickly we’re affecting our planet, but most consumers are blissfully unaware of the direct connection between shopping and destroying. For example, the world loses thirty something football fields of forest in any given minute while during that same minute we’re producing 114 cars…