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  1. #1
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    Financial Independence..! How do you plan it?

    So.. We get a job. Our life goes normal. Wake up in the morning, come back home, watch TV and sleep. Wait for the Salary every month end. Boss might take an advantage as he know that you're dependent on monthly salary. If you loose the job, everything crashes to ground. How do you plan to be independent of all these? I want to know, how I can keep myself UP even though I hit the ground. I started studying Economics. Trying to understand investing. Not sure how it might pave a way for me. I want to take your suggestions.

  2. #2
    Senior Member Azure Nomad's Avatar
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    Re: Financial Independence..! How do you plan it?

    Pay down debts first so you can save more and frees up credit to be put to use. But if you have debt that is high start with a small savings and snowball it. Start with 5% of your monthly salary to be saved and then increase it to 10% by the end of the year.

    Best rate of return at the moment are through stocks and mutual funds. But it requires active investment to see a payoff when it comes to stocks and mutual funds.

    So, to keep it simple you need to start to build basic savings.

    1. Enough to cover one month expenses
    2. Move on to save enough to cover 3 months expenses
    3. Save enough to cover 6 months
    4. Save a years worth of expenses

    Once you reach that point you can diversify your investment and savings options in my opinion. But paying down debt should always be 1a while saving/investing is your 1b.

  3. #3
    Senior Member O.G.'s Avatar
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    Re: Financial Independence..! How do you plan it?

    Nomads advice is spot on above. You might want to add in some of the below.

    Always live beneath your means. Just because you can afford something does not mean you need it.

    Never buy anything new, when used will do.

    Know the difference between things you need, and things you want.

    There is a huge difference between being a cheapskate and being frugal. Being frugal means taking the time to spend your money wisely. It takes me 40 hours a week to bring home my paycheck. I owe it to myself to spend a good amount of time shopping for the best deals on the things I need.

    Saving money on the things you purchase is the same thing as earning more money in your paycheck. The money you saved can be put in the bank to speed debt payoff or build your personal reserve fund.
    "People are always angry at anyone who chooses very individual standards for his life; because of the extraordinary treatment which that man grants to himself, they feel degraded, like ordinary beings."
    - Nietzsche


  4. #4
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    Re: Financial Independence..! How do you plan it?

    I'm a awful investor, but I can help you. Getting started is tough, take's hard work for not much gain. But if you can keep earning a little more than you spend, it will get better. Go slow and steady at first. If you try too hard, it's easy to lose what you have gained.

    I'm an American, and I like my stuff, which is why I'm a rotten investor. Have to say though, sometimes the quest for something turns out to have as much or more value as the thing itself. Another cruel trick of fate is how appealing stuff you can't quite afford look's.

    As you get older you will realize life's all a trade off. More of this requires less of that. Maybe this sound's dumb, but you'd be surprised how many people fail cause they got to have everything.
    Drop the needle!

  5. #5
    Senior Member Eskorteprinsen's Avatar
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    Re: Financial Independence..! How do you plan it?

    I only buy new stuff when I need them.F ex.I have a sofa from the year 2000,which buy the way my mother always tells me to buy a new one, when she visits,once a year.LOL.
    Paying down debt, and never use/have credit cards.
    Buy things/foods on sale.Use a bike to work if possible....I did for 20 years, and used the subway during the winter.Its worth checking out guys on youtube,who talks about prepping;"The prepared mind" f ex.Some great hints, how to be prepared, if shits hits the fan.

  6. #6
    Senior Member Victor's Avatar
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    Re: Financial Independence..! How do you plan it?

    Quote Originally Posted by O.G. View Post
    Nomads advice is spot on above. You might want to add in some of the below.

    Always live beneath your means. Just because you can afford something does not mean you need it.

    Never buy anything new, when used will do.

    Know the difference between things you need, and things you want.

    There is a huge difference between being a cheapskate and being frugal. Being frugal means taking the time to spend your money wisely. It takes me 40 hours a week to bring home my paycheck. I owe it to myself to spend a good amount of time shopping for the best deals on the things I need.

    Saving money on the things you purchase is the same thing as earning more money in your paycheck. The money you saved can be put in the bank to speed debt payoff or build your personal reserve fund.
    A lifetime of wisdom here, fantastic post sir!

    One small tip I'll add -- if you're looking at buying something, ask yourself two questions. 1 - how many hours (after taxes and deductions) of my life will this item cost me? Is it worth putting in that much time that I otherwise might not need to? 2 - if this isn't something that I need, how long will I keep it? I find myself thinking longer over things that I don't think I'll keep forever.
    Pain is unavoidable. Suffering is optional.

    "Love is for poets." -- Connor MacLeod of the Clan MacLeod

  7. #7
    Moderator Thomas Covenant's Avatar
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    Re: Financial Independence..! How do you plan it?

    Saving money on the things you purchase is the same thing as earning more money in your paycheck.
    It's even better. You get taxed on an earnings increase, but not on savings you make (at least not yet!)

    In the UK, someone earning 60,000 and spending 40,000 is a lot worse off than someone earning 30,000 and spending 10,000.
    I work in financial planning. I am interested in metal (all kinds), miniature painting and PC gaming. I live in Scotland.

  8. #8
    Senior Member Hoser's Avatar
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    Re: Financial Independence..! How do you plan it?

    Spending your evenings watching TV is just about the worse thing you can do if you have any desire at all to break out of 'normal'. That's why 'normal' people are fat, lazy, shitheads.

    Work out, read, learn. Anything but consume mindless entertainment every night.
    "If you live a life of even moderate mental and physical discipline, you find yourself cut off from the mass of men."
    -- P. D. Mangan @Mangan150









  9. #9
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    Re: Financial Independence..! How do you plan it?

    Thank you all for your valuable suggestions. All your suggestions are totally new and are some really basic steps to save money. Really wonderful..! I totally agree - Debts are not be carried on your back anytime. This is my first target as I'm neck deep($70,000 -- Lol..) in educational loan. However, saving money like Nomad suggested, increase savings by time is good way to preserve and stay in safe position. It's very true that just because we can afford t doesn't mean that we need it.

    When I reach home, I keep learning some courses and also I started studying investing(Very vast subject). That's pretty much I do. From all the suggestions I sure got very good picture on saving money progressively as the time passes and discipline on spending. Although I'm a foreigner to USA, assuming that I may stay longer(Not sure of my long term plans), is it good choice of taking a step further by investing on own house on mortgage? I know that'll eat away lot of monthly salary, but not sure how much advantage I can make on the house investment. I see many people buying homes on mortgage. I make 50k/yr and joined my job very recently. I want to cut down as much as I can on any expense so that I can repay my loan asap. Also, I'm allowed to have only one active source of income and any other income I may look into must be passive(Reason why I'm looking into investment)! Any suggestions on any other passive income sources are greatly helpful.

  10. #10
    Senior Member Unboxxed's Avatar
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    Re: Financial Independence..! How do you plan it?

    A lot of wisdom here. I always gotta tell a story.

    When I was starting out and got my first apartment after the rest of my family left the city and moved back to our home state, my paycheck was humble at $126.50 per week (in 1975). Being new to the company, I was approached by a representative of the credit union to which all employees belonged and was asked if I wanted to join. I said ok but I only did a payroll deduction of $3 a month. Three bucks was the absolute limit (!) until I realized on the next payday that I had actually signed up for $3 twice a month. I laugh now, six bucks, but back then I about shit, I was so scared that I would run out of money and have no place to go.

    Then suddenly, in the midst of my all-around fear, something in my brain just snapped, and I completely changed from being in fear to being in control. I cannot explain why. I remember the moment to this day. I immediately upped it to 30 dollars twice a month. I guess I saw that saving money would save me.

    Soon, I upped it to 50 dollars. But, I would actually save 55 instead. After 10 deductions of this at 55, I really had the value of 11 deductions at 50, but sooner, and I did not notice the difference to what I left myself to spend. When I later increased it to 75 dollars, I saved 80 instead. When I upped it to 100 dollars, I chose 110 instead. Then 155. I always pushed myself the few dollars more. I had a job with stepped pay increases and when I received an increase, I added all of it into a new higher payroll deduction. I did not let the increase dictate the timing of a new spending level.

    The trick for me was always to withhold it from myself and live on the rest. They called it "paying yourself first". I've been a saver and a power saver all of my life. The best thing I ever did was to live like I made less money that I actually did. Tomorrow always comes. Save money even when you think you can't. You can.
    The two most important days in your life are the day you were born and the day you find out why. - Mark Twain

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  11. #11

    Re: Financial Independence..! How do you plan it?

    Quote Originally Posted by genie View Post
    So.. We get a job. Our life goes normal. Wake up in the morning, come back home, watch TV and sleep. Wait for the Salary every month end. Boss might take an advantage as he know that you're dependent on monthly salary. If you loose the job, everything crashes to ground. How do you plan to be independent of all these? I want to know, how I can keep myself UP even though I hit the ground. I started studying Economics. Trying to understand investing. Not sure how it might pave a way for me. I want to take your suggestions.
    1. Practice minimalism in your daily life and personal finances.
    2. Eliminate your debt as expediently as possible. There are some fairly nifty techniques to do this.
    3. Save 6 months to 2/3 years of a cash runway for expenses.
    4. Practice FI/RE (Financial Independence / Retire Early). Your savings rate has a direct bearing on how soon you can retire. The higher the savings rate, the sooner you can retire.
    5. Invest the surplus in passive index funds.

    There are many others things you can do, but this will be an excellent start for you.

  12. #12
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    Re: Financial Independence..! How do you plan it?

    Quote Originally Posted by Victor View Post
    A lifetime of wisdom here, fantastic post sir!

    One small tip I'll add -- if you're looking at buying something, ask yourself two questions. 1 - how many hours (after taxes and deductions) of my life will this item cost me? Is it worth putting in that much time that I otherwise might not need to? 2 - if this isn't something that I need, how long will I keep it? I find myself thinking longer over things that I don't think I'll keep forever.
    Didn't ruin my life or anything, but following this advice would of saved me some serious coin over the year's.

    Trouble is, it's no problem to look back and see what you should of done. but it's not so easy out on the street.
    Drop the needle!

  13. #13

    Re: Financial Independence..! How do you plan it?

    This is a deeply personal subject but I feel it is within the best interest of everyone to learn some of these principles in no particular order.


    - If you make a $100,000 (after taxes) and spend $100,001 of it you are bankrupt.

    - If you can't afford 5 of them you can't afford 1.

    - Stop hanging out with broke people who make shitty financial decisions. There choices could
    inadvertently bring you down.

    - Reinvest profits. I've found my best windfalls have come when I sacked away money I could afford to lose and then purchase equity or a commodity that later went up in price. This is not fullproof because you will directly risk your capital and could lose it. I've also lost money, or had money go stagnant in illiquid investments this way but it's better than just sitting on cash which will get slowly eaten by inflation.

    - Watch transaction costs. You can buy an oz of silver at the time of this writing for $18.5. Now try to sell it. Take into account the cost of things like shipping, tax, and other incidentals when making financial decisions. It might seem like a great deal, but then ancillary costs could push an otherwise attractive investment to go negative.

    - Sweat Equity and learning skills can pay dividends. I'm not saying learn a trade but taking a cooking class could save you a shit ton of money eating out if you are willing to make some of your own meals.


    Most financial advise is deceptively simple, but we live in environments which make following it tougher than it could be. Take living in New York City. It's going to be very difficult to get ahead if one spends 50% of his after tax income on housing.


    Disclaimer - All of these statements are my opinion as guy who has no state or federal licenses in securities, tax management or asset planning.
    because even solitude is better than evil company. - Bartolomeo Scala

  14. #14
    Moderator Thomas Covenant's Avatar
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    Re: Financial Independence..! How do you plan it?

    All good advice Free and Clear. I have a license from the society/FCA and can back up your comments.

    Your point about trading costs also applies to funds. If you invest in them, only review them annually and don't switch them all the time!
    I work in financial planning. I am interested in metal (all kinds), miniature painting and PC gaming. I live in Scotland.

  15. #15
    Senior Member Hesiod's Avatar
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    Re: Financial Independence..! How do you plan it?

    How I got ahead...

    Target a decent paying job, do what it takes to get there, college or whatever.

    Save like crazy and don't waste money on daft material objects or women, streamline your cash. That includes wasting money on items that depreciate fast like cars, keep your car simple and efficient to run, this will also keep the gold diggers away. I gave the outward impression I had fuck all for decades.

    If you can buy a house rather than rent then do so, and pay it off as soon as possible, then after you have payed it off and got your savings back up your boss has NOTHING over you. Your now free! Best thing is your boss isn't.

    If you do get a woman to bang from time to time be vigilant of your spending on her and streamline that as much as possible, you want to be milking it for free or as cheap as possible. Not wasting money on meals or holidays.

    Streamline your outgoings as much as possible, practice the art of streamlining spending, this will not only in turn grow your money faster it will also make the money you have last longer should you decide to retire early or take time off work, it's a double edge sword, don't be wasteful.

    Get to this stage and feel your true sense of freedom from the rat race, good luck young Jedi.

    Oh and lastly, throw away that damn television!
    "Whoever has trusted a woman has trusted deceivers." .... Hesiod

    If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much




  16. #16
    Senior Member Azure Nomad's Avatar
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    Re: Financial Independence..! How do you plan it?

    I agree with others that the other side of the equation is to spend less. This is where I learned how to cook and prepare my own meals, how to do basic home repairs, big home projects or even repairing old desks and tables by restoring them with cost effective finishes and a little sand paper. You would be surprised by what people "throw" away and what you can do with some sandpaper and a wood finish.

  17. #17

    Re: Financial Independence..! How do you plan it?

    Great advice here... I'd say you really have to resign yourself to accepting that you will probably have to learn to love living like a monk- unless you've just already got a ton of money. Get used to saving and doing without and learning all you can about personal finance, risk management, economics, investing, etc. Two great books to check out are "Your Money or Your Life" and "The Ultimate Cheapskate's Road Map to True Riches." Both will totally change how you view money and how to use it to benefit yourself instead of playing to the interest of others and they will bust common money and consumer-centric myths.


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