Financial Independence: Another Name For Freedom

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I have been an avid reader of personal finance for over 35 years.  Maybe because of my business finance background or maybe it is something else, but it just seems to resonate with me. 

 

I have devoured books and podcasts about financial independence because I wanted to have the freedom to do the work I enjoy on my time. 

After my triplet girls were born, I became focused on this goal.  A friend of mine told me that in a “blink of an eye” our girls would be grown and away from home.  That seemed crazy after swaddling them in their baby blankets, but wow…. was my friend right!  It has gone fast, but I took his advice and focused on financial independence.

The equation I arrived at to define this freedom is: “Financial freedom” = [passive income + earned income from work I love to do] > my living expenses.

If I solved this equation, then the time freedom that I wanted would be at hand.  I focused on three factors to solve this equation.

  1. Building passive income from investments
  2. Maintain a reasonable standard of living
  3. Earn money doing work that I enjoyed

Generate passive income.   For me this means investments that generate dividends, interest, or capital gains from stocks and bonds.  I am comfortable with investing in the stock market using a simple approach with index mutual fund investments.  Others have invested in real estate with collecting rents or other assets that generate income without the need for labor hours.  Whatever works best for you and your risk profile is the right choice.  The idea is to create income streams that don’t require your labor effort (or at least a minimal amount).

Keep your living costs reasonable.  It was so easy for me and my family to inflate our lifestyle when the kids came along.  My wife and I worked hard for many years and felt the desire to have certain things that we could afford, and were “nice to have”, but not “gotta have.”  Being able to defer some spending that really was not going to make any difference to us in the long run made sense.  We lived below our means, but never felt deprived.  Simple family experiences were cherished versus the nice electronic gadgets that would not buy me my freedom.

Earn money doing work you enjoy.  So often I would hear friends or colleagues complain about their jobs, but they would not change.  Why?  Not always sure, but some may have felt stuck given lifestyle choices or fear of the unknown at the next business.  I didn’t always enjoy my work at times, but my attitude was one that I always took away some learning.  How could each new job or position help me get closer to financial independence and at the same time enjoy the journey?

Financial independence or freedom, whichever rings true to you, is both a mindset and a math equation.  If I had the right mindset and I understood the math behind it, then the time freedom with my family would be solved.  Are you ready for take your time back?  Let me know if I can help you.

Cheers to your freedom!
Mike

What does your second half look like?

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I read a book a while back titled Halftime by Bob Buford. It spoke to me because at the time I was turning 50, and the book outlined the difference between the first half of our life versus the second half.

Now that I am further along in my second half, I find myself reading articles about how to stay vibrant physically and mentally. It’s been said that “health equals wealth” and my intention is to be on the journey with continued health as a focus.

Below are six habits that resonated with me from a recent article on this topic:

  1. Mindset of Abundance
    Worrying about money at any age is not fun. I sure don’t want to worry about it in my older years. The abundant mindset was a game changer for me, and it not only included financial, but also spiritual, work, and relationships. The way I practice this comes with making sure any business opportunity is sourced with the right resource. If a referral comes to me, but it’s not quite the right fit or maybe my bandwidth is such that I couldn’t meet the client needs properly, then I actively help them find a better resource. Even if that means referring them to a competitor. It’s the “Pay it forward” mentality and the idea that there is an abundance of work out there for everyone, and what comes around goes around.
  2. Take Care of Your Spirit
    Do you ever feel not present, or your mind is racing all over the place? Or someone asks you a question, but you really didn’t hear it, and you must ask them to repeat it again? I have been working on a practice where I focus on my “active listening” skills and intentional mindfulness exercises to be present. It is not easy, but in today’s fast paced world, it is necessary. As I age, I am realizing that spiritual fitness is just as important as physical fitness.
  3. Goals
    I have generally had goals most of my life. Not always written down, but goals that helped me go to where I wanted to take my career. Eventually as I got older, I began to write down my goals and reviewing intermittently during the year. I have kept copies for the past 15 years and it’s amazing what I accomplished towards the life that I wanted to lead. The goals kept me focused, engaged, and motivated. Where I needed to pivot, I did. Some goals changed or were dropped, but I had a goal because I wanted to be “intentional” with my life and business.
  4. Take Care Physically
    When I was young, I took a lot for granted and didn’t feel that I would ever wear out. I pushed myself physically as an athlete. Well, I did better than some…my weight is still good, nutrition is on solid ground (except for the chocolate that I enjoy), and my strength is rebounding. Get a good night sleep. It is the most underrated aspect of recovery that is necessary for us to continue running the marathon of life.
  5. Do Work You Enjoy
    Enjoying what you do as a profession nourishes the body and your spirit. Long-term health and happiness are a function of a healthy and satisfied mind, and work that fulfills these attributes will give you inner satisfaction.
  6. Choose Your Relationships Wisely
    The emotions of others are contagious. Be mindful of who you hang out with because as Jim Rohn once said, “You are the five people you hang around the most with.” If you are not hanging around with people who you want to emulate, then time for a reset.

Cheers to your 2nd half!