Pursuing financial independence is a journey to financial freedom, but some of us fail to notice the opportunity the journey offers. We may have some vague idea of what financial freedom or financial independence would feel like, but without actual reference points of experience, it can be more difficult to “sacrifice” for tomorrow’s sake.
When I look back at 2016, I feel this was the year where all the changes came together for the better.
After studying and reading for countless hundreds of hours on personal finance, I finally started to connect the dots.
Knowledge is useless without doing the hard work of physically taking each step on this crazy, scary, and beautiful green path to money, freedom and security.
The opportunity of reaching Financial Independence became our reality.
Naturally, it is a humbling experience to know an excess of income can be used to generate more income. In fact, this is a very powerful piece of knowledge that has inspired countless books reciting the same message: make your money work for you.
What is the best way to get started? How does anybody mirror our results and go from saving 20% the previous year to reaching a 60% savings rate by the end of the year?
Reaching Financial Independence boils down to understanding the opportunity and bracing for the journey to financial freedom.
What do I mean by opportunity and what do I mean by bracing for the journey to financial freedom? I mean seeing real life examples of people who have “been there, done that.” It helps to see people who are in similar life circumstances, facing the same adversity each day. (7 case studies on this later on down)
Understanding opportunity means we never interrupt compounding interest. This might sound simple, but we all know plenty of older friends and family member who wish they had started investing sooner.
If we spend money inefficiently, then we are losing out on all future gains and the gains on those gains. $100 spent today may feel like a $100 loss, but the reality is the loss could be as high as $1,000 or more when viewed from an investor’s perspective.
Opportunity means we cut out the negative spend or negative mentalities that are preventing us from reaching our goals.
The journey involves a million missteps combined with a million course corrections.
Lucky for us, people online talk about their missteps and further reinforce the opportunity by explaining what they did to course correct.
At the start of 2016….
…we were still trying to align our money goals.
…our net worth was far into negative territory to the tune of -$40,000.
…and most of all, we were not confident or passionate about investing.
At the start of 2017…
…we were completely on the same page with our money goals.
…our net worth was now positive and above $0!
…we became confident in and passionate about investing.
We started to see investing as a way to make up ground against the ever rising and snowballing liability of retirement.
We loved regaining control of our lives.
We identified the opportunity to excel and eliminated any obstacle (specifically 17 strategies to save $50,000 last year for our specific situation) that would take away from our overarching goal. Bottom line: we opted for the best choice instead of a “good” or “better” one.
I can’t say it enough, but our emotional and psychological well being transformed far faster than our net worth.
One of the common misconceptions is this notion of making large “sacrifices” today, but we couldn’t disagree more. By putting our money to work for us, we felt like we were only gaining more.
No more were we able to doubt the possibility that existed for us and many others.
So, what changed for us on our financial independence journey after we identified the opportunity?
What was the catalyst that led to a remarkable investing year?
I will dive into the 3 money transformations that directly help our investments on Thursday — so be sure to check it out!
What would a financially free life look like to you? How would added confidence & clarity improve your investment choices? How would you benefit from seeing your investment portfolio grow to the point where it can cover your lifetime expenses?
P.S. – Welcome to what I’m calling the Distilled Dollar Investing Crash Course: 3 articles sharing the biggest investing takeaways from my journey in pursuing financial independence and in creating financial freedom in my life!
I spent waaaay too much time developing the content over these next few posts and I am extremely excited for you to be viewing it now! So, be sure to check back on Thursday, June 15th, when I’ll discuss the investing transformation we underwent in 2016 along with the 3 Investing Transformations required for anyone to master money.