Saturday, November 10, 2012

In time

          One of the most recent challenges i have is strong sense that i do not have time for anything, but even when i stand still it still running at ever increasing speed.
I think that the main contributing factor is number of responsibilities, non-value added things i involved in. It does clutter the life and takes away precisions moments when you could simply sit and dream.
            An analogue with personal finance is buying thing you can afford but do not need. Over the period of time their number grows and you do need to replace them. It eats up and limit the potential savings you could make.
Positive moment that i am so stressed about lack of time that i can work almost anywhere, when i have a moment to myself.
          On the other hand (to be brutally honest) i feel like i have not made any measurable progress in educating myself towards financial independence. The savings have been made do not count, as i always been pretty careful (scared do not have money). Yet again i spent  perhaps 2000 hours blogging, reading and commenting on the posts. It gave me a unique insight into personal finances but sometimes i wish i spent that time reading books and learned fundamentals about modern economy.
        What i understood that for the most of the people financial independence is a challenge  and life long process with no silver bullet. Some of us on a higher salary or (and) with no kids achieve better results but with the real returns of 3-5% on the investment  one cannot expect an early exit.


  1. There is no easy way to financial independence but you can easily make more than 3-5% on your money and reach it faster. Simply put, you need to have as much money saved as possible, which can be achieved by spending less and trying to earn more.But financial independence is different for everybody. For some it is doing nothing all day on the beach, for others it is working part time at a job you love without needing the paycheck, etc. On your lifestyle will depend your number, the money you need to be financially independent.

  2. I think anything is possible if only we had enough time to do it. But it's a shame we often don't. If I could have any super power it would be the ability to control time. There are lots of good books out there on finance and economics, but I still find the best rule of thumb is to figure out what works best for you as an individual. But the more knowledge you have the better choices you can make. I feel like the magic number for myself to be financially independent is 1 million 2012 dollars at today's interest rates. But I know it's a moving target because I could have a family in the future and my target will need to change. My only hope is that the future wife shares the same values as I do on financial stability and will add value when we become a single household.

  3. If you have a plan, you are already half way there. In my opinion, drifting is dangerous.

  4. Pauline,

    It is what I am honestly trying to do - identify essential expenses and cut the rest. Save as much money as possible towards financial independence. But I think we are mixing return on the capital and savings rates. Let's look at 2012 :

    I earned 3% or $5,400 while saved $55,600 However the whole idea is not about savings, but stop doing it at some moment in time. Preferably before retirement age.


    You are absolutely right. Financial independence is totally moving target. While yourself you could happily live of $ 1 million with the family it is a different matter. The other thing is inflation. If you are going to spend all your income, you could not maintain your principal and eventually it will hurt your income.

    Thank you for encouragement. I am trying to follow it doing religiously family budgeting and saving as much as I can. Now I need to focus on right investment vehicles towards the financial independence.