I started this blog nearly two years ago (does time ever fly by), and since then I have written series of posts covering a wide range of topics, such as buying your first home, how to invest for your retirement, and building your path toward financial freedom. I have greatly enjoyed writing about all of these topics, but I feel it is time to start adding a bit of focus to my writing, and to strive toward a laser-like intensity toward the ultimate goal of achieving financial freedom.
I have started out on a new journey of entrepreneurship, and in a way, I am living out the dream I have strived toward for a long time now. I have not yet reached financial independence, and I might still be a while away from there, but I am on the way. My writings will continue to be personal, and I will continue to write under the frame of this new mindset and stage of life.
THE CHANGES AHEAD
To give you an idea of where I want to go, one of my favourite series is the one on living to 100: Investing in your future. I really do believe that there are changes coming that are going to completely change the way that we live our lives, and blow open many of our common biases and ideas about the way that things work.
On my other finance site, Financial God, I delve more into the political and moral morass that we find ourselves in, and I also share some of the amazing technological changes coming down the road that have the potential to radically change our lives, for better or worse.
To put it concisely, while it might not be the end of the world, I do think that 2012 is the beginning of the end of the world as we know it. Things are going to continue to change from here on out, and the questions on everyone’s mind will always be: “How does this affect me?” and “What can I do to prepare?”
A NEW FOCUS
I still believe in the motto of “maximizing your life EV”, even more than I ever did before. EV is an acronym for Expected Value, and it is another way of saying “let’s do what we can so that we don’t just live for the present, nor do we wait until the future: let’s make things better over our entire lifespans”.
How can we do that? I still believe that personal finance is one of the important pillars supporting this goal. A sound foundation needs to include the following components:
- A high savings rate.
- A healthy buffer between income and expenses.
- Low-cost and efficient investing for the future.
Once the foundation is in place, we can build it up and make it stronger over time, and we can eventually use it to support our long-term goals. I am a strong believer in financial independence and freedom from the rat race, so those are the most important goals to me. Here are some of the things that can be achieved through a solid financial foundation:
- Income-based financial independence.
- Wealth-based financial independence.
- The freedom to live the life you’ve always wanted, whether it be freelancing, staying at home with your kids, or starting your own business.
MY OWN PATH
My own path has been both traditional, and unconventional. It has been traditional because I have gone to university, graduated with honours, and I worked in a corporate setting at a good job in a good environment. I had debt, I paid it off, I struggled with low-income wages, made financial mistakes, and learned from them.
This path is not a bad one — work for a few decades, pay off the mortgage, and build up a nest egg big enough to take care of me and my family for the rest of my life, by the time I retire. It is also a very linear path, with not as much room for exploration, trial & error, and risk & reward. For many people, that is not such a bad thing. I never thought of myself as entrepreneurial in the past, and I think that there are many good things to be said for a linear path, so long as one sticks to the basic personal financial foundation.
My path has also been unconventional because I have since decided to give up the stable salary and go and work for my own, even at the expense of a greatly reduced level of income. I have gotten used to a high rate of savings, so my lifestyle has not had to suffer too much even though I have just started out. I am only just beginning to forge down this path, and I don’t yet know where it will lead, but I have greatly enjoyed the experiences and the opportunities that I’ve had until now.
I am not a “get rick quick” guru, and I can’t promise you that the less-beaten path is an easy way to riches. What I can promise you is that by laying down the foundation, you will give yourself the choice, so that you can have the freedom to try one path or the other, and maximize your own life EV.
WHAT’S IN IT FOR YOU?
This site wouldn’t have much of a purpose if there was nobody around to read it. I want to know: Why is personal finance important for you? If you had a bit more money or freedom, what would you be able to achieve? I would love to hear your own stories.
personal finance is becoming more important because I am finding all the stuff I am missing/that is passing me by due to the debt that is drowning me. if i didn/’t have this debt, i could have bought our family home. instead, it is being sold and we will be loosing it…my grandfather bought it ~65 years ago and it was my main focal point/place growing up and the base of all my good memories….
I’m truly sorry to hear that, JK. Is there any possible way that you can turn things around at this point? There is also always the hope that you can turn around your situation in the future and get the house back. Never give up hope!
Hi Kevin, I am in the process of fixing my own financial situation (slowly but surely) and a friend actually expressed interest in buying the place as a rental property due its price and then sell back when I am able. We shall see…
I really hope it works out for you guys!
It is kind of hard to admit, being a personal finance writer, that I am not financially independent yet. But in truth, that is the sole purpose of why my brother and started our blog. Even though we are not financial gurus, we thought the best way to increase our financial knowledge was to research topics and write about them ourselves. And not to mention the fact of networking with smarter and like-minded individuals.
When we receive our desired income, we want to help our other family members (our older brother and cousins) to achieve the same thing, by creating an asset that will serve them income for a long time!
Hi Kolton,
I agree, that is a great way to learn! I have learned many things simply by researching and writing about them. I am not financially independent to the extent that I would like, but I am hopefully on the way there. 🙂
I’m still working on trying to make the linear salary path more flexible. Luckily as a teacher I have opportunities that most people don’t. Maybe I’ll just become a professional eBook writer (and yes that was a shameless self promotion for the free eBook I released today).
I will help to promote at the next weekend reading. I skipped out the St. Patrick’s edition but I’ll be back this weekend. 😉
I think, for the most part, is work-life balance. We knew that as we climb the corporate ladder (which comes with higher pay), we inevitably need to dedicate more time in our work, which takes a big slice of family time away. At times, it is detrimental to our health even. I want to live longer – you know, Dalai Lama said something like… what baffles him about humanity – is that one sacrifices health to gain wealth, and then spend all the wealth to regain health. But many people just don’t realize that is the result of ‘upgrading’ our lifestyle – if we were to keep things Zen-like simple, I think, we just need a sustained income stream, not a bigger pay. Nonetheless, we need to provide for our family, ensure they have good life – not affluent, but reasonably good – like, you could afford to send your kids to college, etc.
I suppose if you don’t have knowledge in personal finance, you wouldn’t care less on saving, living within your means, avoiding bad debt, investing, planning for college education and retirement. You tend to just focus on the things in front of you – current big salary, flashy cars, etc. And in a job market where retrenchment and cost cutting is the norm, it’s you are leaving your livelihood to the hands of another party should the income stop coming in.
So I think, PF also helps me to realize and plan what I need to do now so that I could achieve what I want and need to do in the future.
I really enjoyed reading this comment, LCF. That brings a lot of points home for me, as well. Sometimes it’s easy to lose sight of the bigger picture.
First off, I like your perspective, based on what I’ve read from you over the last 2 years – so I think you’re on your way to success.
Anyway, why is PF important to me? Well, it puts food on the table and pays for needs first and foremost 🙂 Other than that, it is a way to add comfort and security (or at least the perception of such) to life, and even a way to have hope for some real aspirational things. Putting it all together, I see personal finance as a way to help improve the quality of my life – even positively impacting other areas of life such as health and relationships.
Gotta ascent the Maslow pyramid somehow. 😉 I also enjoy reading your perspectives. 🙂
I like what I’ve read here to this point and I think I am definitely going to like the new focus you are planning on taking.
Let’s see, I struck out on my own 9 months ago. I wouldn’t say that I am financially independent by any stretch, but I am on a definite path to get there. Having the freedom from my job has allowed my to better distill my own idea of what it means to be free, to more fully implement that idea and to focus my energy on getting more fully independent. It’s a never ending journey, but now it’s one that is fulfilling and rewarding as well as one that I am happy to be on.
And you’re also in the process of moving into a new place in Bangkok? I definitely need to read up more on your adventures.
Not really in the process, we’ve been here since last June. We will be in the process of moving soon though as we are finding Bangkok to hectic for us. Currently thinking Chiang Mai, Hua Hin or Krabi. So, definitely keep coming back and find out about our time in Bangkok and the differences between there and our new place.
Long term we will probably end up back in the US because of my daughters education, but that is 3 years away. We are also considering a year or two in Mexico, Costa Rica or Chile. Very much in the planning and research phase at this point though.
Oh maybe I read an old post or misread something, I thought I read that you guys were moving into a condo there. 🙂 I visited both Chiang Mai and Bangkok, and I think I preferred Chiang Mai actually. Bangkok was fun but I was overwhelmed after only a couple of days, especially by the touts!
I will definitely come back and check out more about your adventures. 🙂
That’s why I like to read your blog – I am also on a hound-dog like trail for financial freedom, and realize it will not happen overnight. I like what you have going on here, and I enjoy getting the opportunity to live vicariously through your posts about freelancing.
Thanks, MMD. I’ll have more posts coming up soon about this. My approach is a bit different since I didn’t have the six figure salary or have the six figure business. I do plan to get there but gotta climb up many rocks, first. Hope this keeps the journey real for others that see many in the end-game but didn’t see the journey along the way.
My husband and I are both personal finance gurus – plain and simple. Starting in 2004 – at the age of 21 we began investing, researching, charting, tracking and setting goals for our finances. It’s safe to say it’s a big hobby for us both. We began our blog as a way for us to track our goals and research, analyze and report on all-things financial. Yes… i think we’re geeks.
If we had more money and freedom we’d be quitting our day jobs, moving out to the country, and spending our days hiking, canoeing, gardening etc. We have dreams of getting away from the city… and living a more simple life.
I love your plans. 🙂 I don’t plan to stay at my current spot forever, either, and you guys were far ahead of where I was at 21. Freedom 48 is a great goal, and maybe you can get there even earlier. 🙂
I like your core pillars to success. Having that buffer between expenses and income is key. PF is important to me because it gives me choices and options. Sure, I live a traditional lifestyle, but at any point in time, I can quit and try something different if my job ever starts sucking, or if I have a family emergency. If true tragedy strikes, I don’t want to be thinking about how I’m going to deal with the crisis…and pay the bills. I want to know that I can quit my job, buckle down and live frugally until the crisis is averted.
I’m really looking forward to hearing your journey.
Thanks, Sandy, I will keep you up to date. What did you guys decide about the new house?