Is Financial Independence Possible?
I, go back and forth on the vision of the future. The pendulum keeps swinging back and forth on whether financial independence is even possible. At work it seems impossible. There is an aging workforce who may not even have the option to retire. If they can’t retire, could we even consider financial independence? I ask a lot of questions. Prodding constantly; trying to figure why they didn’t save up enough money to retire.
People at work constantly say they can’t afford retirement. Not sure why because people at work drive super fancy cars, wear nice clothes, go on nice vacations, and have nice McMansions. I’ve heard some visitors say “wow your parking lot is full of super sleek cars!” So it makes me doubt if we’ll ever get out of the rat race.
My parents don’t have a retirement fund. No, they didn’t overspend their money. They immigrated as blue collar workers and really had no financial education in terms of investments, etc. My parents can save. They are penny crunchers, but they have no clue as to how to invest. Their earning power over the years has not been high. This is a huge problem in the low income immigrant population. A problem I plan to start tackling soon. So their retirement is dependent on their children. This puts a lot of pressure on both my brother and I.
Well, my brother is not necessarily aware of this pressure since he’s only 16. But he will in a couple of years. One of the reasons I’m pushing him so heavily to do well in high school. While I don’t believe in the education system (I think it’s completely broken…topic for another day), I believe it’s one of the best ways for children of low income immigrant families to get out of the cycle of poverty. I’m not the only one. My first boss in high school (I worked for a non-profit) is a prime example. He would remind me of this quite consistently. He came from a blue collar neighborhood in Illinois where you were expected to stay forever working for the factory and have babies. He says his mom never forgave him for leaving, joining the military, going to med school, and rising up to colonel and chief of staff. But it was what allowed him to take care of her in her old age. So, I constantly think about my parents’ retirement. Is anybody facing a similar situation?
After coming across Root of Good’s blog, I got a little more motivated. His main points are living a modest lifestyle and saving. We only need around $40,000 a year to live a modest lifestyle. He wrote a step method to do look at your savings. If a $1,000,000 is your goal, then start with $10,000, and then do $50,000, then, $100,000, etc. Treat every goal like a milestone.
I, also, ended up reading FI’s plan on how he plans to retire by 30. He’s built up passive income through rental properties and dividend income. He’s done great! He’s going to exit the corporate world next year. Pretty great!
So, maybe it’s not impossible. If we never try, we’ll never know. So I’m using a combination of Justin’s (Root of Good) method to set goals. I’ll be talking more about my own personal goals and our goals as a couple in a follow up post.
Do you think financial independence is possible? Are you working towards it?