Why financial independence, you’ll ask me. And I’ll answer: why not? Do you like to work like a madman all year-round just to be able to afford a few weeks of vacation? Spending those few weeks completely burned out, unable to stop thinking about work? Trying to do everything we’d like to do in this ridiculously short period of rest and then go back to the office, burned out… from our vacations? Then, what do we do? We do it all over again! Rinse and repeat until age 65!
Do you like having to depend on an employer to pay the bills? Bills that are often directly related to the costs of working? We pay for the car, gas, insurance, maintenance, to get to work. We buy clean clothes to look professional (yes, yes, even with video conferences!) You buy a house or rent an apartment near your place of work to save time, but it costs more money. Or we move farther away to save money, but we waste time in traffic (and ultimately, time is money!)
Tell me seriously that this is your dream life.
Choose a job you love, and you will never have to work a day in your life.
Yeah, right. It’s a nice saying, but it’s far from practical from a financial standpoint. Doing what you love rarely makes it easy to support your financial needs, present and future, nor does it ensure a comfortable future. For example, I love knitting. However, I know for a fact that if I traded my current job as an insurance analyst to open an Etsy store and sell slippers, I would not have the same financial comfort. At least, not by doing things in that order.
Of course, we all aspire to financial independence in one way or another. However, what I am aiming for will not happen in 35 years. In fact, it’s more possible that it’s going to happen at 35. At that time, once my financial future is secured, I’ll knit my phentex slippers.
Utopian, you might say? So what can be done to achieve this goal that seems unattainable for the majority of people? What can be done to leave the 9 to 5, the rat race, to be able to enjoy life and fully grow?
Here is a very simplified approach, but one that sums up the essentials:
- Lower your expenses
- Increase your income
- Save the balance
- Invest your savings
- Live off passive income
Much better qualified people than I have explained (and successfully applied!) these basic principles.
Notably, a recent segment on L’indice McSween was touching on the subject. You can watch the segment here (French only). Pierre-Yves McSween also wrote a book on the subject, Liberté 45, which will go on sale on October 7, 2020. I am particularly looking forward to having his opinion on the subject, as an accountant from Quebec. It’s going to be enlightening, for sure!
In addition, I strongly recommend that you read the following books:
- La retraite à 40 ans by Jean-Sébastien Pilotte
- Quit Like a Millionaire by Kristy Shen and Bryce Leung
- Your Money or Your Life by Vicki Robin
- The Simple Path to Wealth by J.L. Collins
To me, those are the most complete books on the subjet. Of course, there are plenty other interesting books and I recommend them here. In a frugal mindset, I recommend you get them at your nearest library. 🙂
I want to make a special mention for the first book on the list. To say that just a few weeks ago, I could not even have recommended a Quebec book on the subject! Fortunately, since September 16, we now have our own Quebec reference on financial independence and early retirement. Thank you, Jean-Sebastien, for sharing your journey towards retirement at the wise age of 39! 😉
It’s here for an excerpt (French only). Gets you dreaming, right? Of course, Jean-Sebastien has not reinvented the wheel. He applied the right principles with an iron discipline and achieved his goals. What I find particularly exciting is seeing someone from our province do it. It doesn’t just happen to others.
But it’s all well and good, a couple of steps to follow, but what does it look like, in practical terms? How can the steps mentioned above actually get someone to financial independence at such a young age?
I will try to give you concrete examples of how I apply these steps to my personal situation in a series of upcoming posts. The process has been gradual in the last three years and remains a work in progress. Like my aunt would say: “We have a lifetime to work on ourselves.” However, I follow the basic principles with discipline and I always seek out to do more and better, always to get closer to my goal.
In the next posts on the subject, I will, of course, include the numbers accordingly, so that you can see in concrete terms the impact that the various steps towards financial independence can have.
How about you? Have you ever thought about financial independence before the “normal” retirement age? I guess if you came across my blog, it’s not by pure coincidence. The beginning of a reflection, at least, must have begun. If so, I urge you to stay tuned for my next tickets. Maybe these will encourage you to do some calculations, some changes… to realize that financial independence is more within your reach than you thought.
As always, feel free to leave me a comment. It will be my pleasure to interact with people who share my interest in personal finances and financial independence.
Until next time!
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