Thursday, March 26, 2015

Plans for Financial Independence: Part II

Last week I wrote about my plans in regards to financial independence.  You can read that post here: Plans for Financial Independence.  We all have different priorities and needs in our lives so you can't make a direct comparison and see that you're 20+ years from financial independence and others are 1-5 years away.  Don't get discouraged in the least and just remember that you're on your own journey.

If you don't remember at the end of the post I asked you all the following questions.

(1) When do you project you will reach your crossover point?
(2) What's your plan when you reach your crossover point?
(3) Which option do you think I should go for?

 The following graphs show the poll results as of 3/25/15.




First off congratulations to the 5 of you that have already reach financial independence.  As well as the 11 of you that expect to hit your crossover point within 1-5 years.  You're in the home stretch now.

One thing to remember is it's hard to really compare where you're at compared to other people.  We all started our journey at different times and have varying requirements for expenses.  Some of us have a full household to support and others are single.  Don't get discouraged if you fall in one of the 10+ year categories because your life circumstance is likely much different from others.

The majority of you lie in the 10-20 year range which is great.  You're most likely early in your journey to financial independence and the biggest thing I can emphasize is to come up with a plan and stick with it.  While it might seem like there's still a long way to go you will eventually get there and most likely faster than you expect.  Keep up the good work and stay focused!


Almost 70% of you plan to retire early in order to pursue other interests.  Personally I think that will be my main goal but I'll still continue my blog and hopefully be able to earn at least a little side income from that.  I haven't ruled out part time work but there's so much more that I want to learn and explore and who knows maybe one of the hobbies I'd like to spend time learning will also lead to some side income potential.

I was actually quite surprised at how many of you, about 21%, plan to continue working at your current job.  Although I imagine you'll start stressing a lot less about the work once money isn't an issue.  Changing careers is also another option for me.  There's two possible careers that I have in mind for myself and that's teaching and something finance related.  I think changing careers, or at least the financial freedom to do so, is a huge perk to being financially independent.  You can try working at start-ups since your own financial house is in order or you can go work in a profession that you're more passionate about.  


I have to admit that I was a bit surprised to see how close the votes were for the last question.  The percentages don't add up to 100% because some people chose not to vote in this question.  But 56% of the votes went for Option 1 which was to continue working at my current job until full financial independence.  That means that 44% of you thought that Option 2 was the better choice which was a modified FI where I work my current job for 5 more years or so and then scale back my work schedule.  I go back and forth between both choices as some days Option 1 seems better and other days I can't wait for Option 2.  I honestly expected Option 2 to be the higher selection although that might have been because it was at a time when I really didn't want to be at work.  I'm not sure which road I'll eventually go on because Option 2 would require anywhere from 3-5 more years at a minimum.  While I'd love to scale back my work right now it's just not realistic at this time to do, so all I can do is continue saving and investing to build up my dividend stream.

Thanks to all of you that participated in the poll.  It's pretty cool to see where we, as a community, sit in regards to our financial independence plans.  One thing thing that question two reinforces is that financial independence is all about freedom.  It's the freedom to go and spend time with family all day.  Or continue working at your current job.  Or change careers.  Or go back to school.  Or dedicate time to all those hobbies that you never had the time for.  Freedom is what we're all searching for and the most comfortable way to do so is through reaching financial independence.

11 comments:

  1. Whichever you choose, the Lizard King is pulling for you. Gogogogogogogo!!!

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  2. I'm not so surprise by your result on question #3. Such changes are scary and fear is a powerful thing to restrain people... Sometimes though, you gotta stop questioning and make it happen. It scares the shit out of me to see everything we own and go for a RV trip with my family, but I feel we need to do it. It might take you 3-5 or even 10 years, but you'll find your own way, at one point, to make it happen. ;-)

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  3. I'm surprised Option 2 wasn't the major winner here. With this crowd focused on financial freedom, you'd think achieving a form of it earlier would win out. Look at what Dividend Mantra has done. Best of luck whatever you decide.

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  4. Interesting results, JC! So much to think about but ultimately I'm just happy to have found DGI in the first place. I'm excited to continue to follow your journey and see where it takes you from here :)

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  5. This was totally cool to see where i stand and it made me feel like a part of this Retire early community!! I am one of the 7 who said over 20 years i am just starting my path that you guys have inspired me to take SO THANK YOU! i have a 5 year old and 19k of student debt im investing only 4% of my income as it stands as the student debt decreases i will boost that and hopefully when THOSE 11 people are reaching their crossover point i will be proud to say i no longer have to wait 20 years maybe ill only have to wait 10. Congrats on all the people who are in the promised land you are all an inspiration.

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  6. Nice stuff JC. Surveys like these provide great insight into people's goals and plans and can help others to see where they stand and whether they are on the right path.

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  7. Having a clear plan and staying accountable is definitely crucial. I doubt I'd stay at my current job.

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  8. Thanks for this very interesting survey. I hope to be in a position to scale down in about 10 years but often like you, I want to call it quit way sooner. Taking it one day at a time... :)

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  9. Thanks for sharing the results of your polls... very interesting. Not having started earlier in my life, I'm definitely not even close to reaching the crossover point. Fortunately, I love my job and want to continue doing it for many years to come, even if I do somehow reach the crossover point.

    Good luck and take care!
    FerdiS

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  10. With my current numbers:
    Assuming 7% annualized stock return, I will have about 205k in the taxable account when I hit 35 which is around $500 per month. Not enough for me. Maybe 30-40% of what I currently need. If I rented out my house and made a small profit, then went RVing or lived in Thailand, definitely doable.

    Once I pay off some short term loans (<5 years), maybe get another promotion we might be talking about a different story.

    But I did just get back to investing after a 7 month hiatus following the purchase of my home!

    On my way.

    WE

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