FIRE and the implausible millennial movement to save, invest, and quit the American workplace – Vox.com

Part of Issue #12 of The Highlight, our home for ambitious stories that explain our world.

Rebecca, 33, grew up in a single-parent household and graduated from college with a music degree in 2008, at the pit of the recession. She lived paycheck-to-paycheck until she took a job at a Fortune 500 company while putting herself through business school, at which point she paid off about $15,000 of student loan debt she accumulated during undergrad.

Rebecca felt the pressure to earn. Since she was 23, she has financially supported her mom, who was laid off in 2008; its one of the reasons she left music. It was really all about money in the beginning, she says.

But she quickly discovered, as she wrote on her blog, I dont like to go to work.

It wasnt the work that Rebecca hated; it was the work environment, the Sisyphean cycle requiring deft navigation of office politics and frustrating management, early mornings, and the surrender of nights and weekends in order to climb. On her blog, she would describe the relief that washed over her at the end of a workday, writing: I get home, plop in front of the TV to block out the miserable thought that this [is] my life until birthday #65.

So, for seven years, Rebecca who blogs under a pseudonym and asked that her real name be withheld to keep her financial information confidential and her husband, a freelance musician, saved and saved, and invested and saved. They made a combined low-six-figure income, though his was sporadic and hers steady. They also received two inheritances from her grandfather and father, money they put directly into their investment portfolio.

The less they spent on lattes, clothes, new iPhones, and the like, the sooner she could leave fluorescent-lit 9-to-5 life behind. Rebeccas goal: to amass a net worth of $1 million by the end of 2019.

Rebeccas extreme retirement plan wasnt necessarily of her own design. She was inspired by FIRE a movement that takes its name from the acronym Financial Independence Retire Early. FIRE is buzzy and blog-friendly, attracting followers in their 20s, 30s, and 40s who reject the notions that income earning must steer the bulk of adult life, and that the reward of retirement must wait for their golden years. What if, they propose, a better plan is to live frugally, save intensely, and retire in the prime of life?

Guesses at how big FIRE has become are vague at best, but there are some clues: There are currently more than 700,000 members in an active Financial Independence subreddit founded in 2011, and popular blog and podcast network Choose FI has registered more than 1.6 million downloads to date. Another FIRE-related blog, Mr. Money Mustache, reported last year that it had been accessed by more than 30 million unique viewers since 2011.

In November 2019, Rebecca hit her target and retired. But as her FIRE date drew near, anxiety crept in; she feared walking away from a high-paying job. Rebeccas mom totally freaked out when Rebecca shared her plans. So did her in-laws. Who could blame them? Theres a not-insignificant amount of risk involved in FIRE, as the stock market roller coaster and economic ripple effect in the wake of the coronavirus pandemic have recently made worryingly clear. Not knowing whats next is really scary, and I didnt think it would be as scary, Rebecca told Vox before leaving her job. I think about it all the time.

Her fears are well-founded, particularly for her generation. Many millennials were laid off in the Great Recession (8.7 million total lost their jobs across all generations), or struggled to find paid work after graduating, and many are still playing a losing game of financial catch-up as a result. Today, millennials remain strapped with an unprecedented student loan debt crisis and ballooning housing, health care, and child care expenses. As a result, they overwhelmingly put off homeownership, medical and dental visits, and having kids because they cant afford it. All the while, but especially now, evidence has grown that another economic crisis may be imminent.

The rise of FIRE runs strikingly counter to that financial picture. How can anyone dream of quitting their job when they can barely stay afloat?

Yet the existential dread Rebecca felt about work is far from uncommon. Gallup has reported that more than half of millennials describe themselves as not engaged at work, or not emotionally and behaviorally connected to their job and company. That dread, and a growing sense of burnout, may in fact be feeding millennial interest in FIRE. The Harris Poll found in 2018 that Google searches for Financial Independence Retire Early rose 96 percent in five years.

If you have a conversation long enough about FIRE, you end up getting into this existential crisis of, like, What are we doing here? says Scott Rieckens, 36, a filmmaker who chronicled his familys entry into FIRE in the documentary Playing With Fire, released on iTunes late last year. Because it is about your time, this nonrenewable resource. ... So what are you going to do with the life that you have left, right?

Financial freedom, as FIRE proponents call the salvation bequeathed by quitting their day jobs, comes with a cost, however. Saving intensely some FIRE leaders recommend saving 50 to 70 percent of your paycheck is an expense in and of itself. To get there, FIRE requires life optimization to the extreme, optimization that can edge out folks without a 401(k) or more than $400 in the bank at any given time, those who dont make six figures by 30, those who dont have partners with whom to split the mortgage, and those who have $40,000 in student debt. And in the end, no one, not even a millennial with a million in the bank can say for sure that the hustle to save will result in the thing that eludes them: happiness.

FIRE is more complicated than telling your boss to get bent, hightailing it to the beach, and never answering another high priority email again.

The first and most crucial part is the FI: Financial Independence. Achieving FI is what the movement, and all of its corresponding blogs, podcasts, forums, and subreddits, hinge on.

Adherents to the FIRE model reach FI by obeying an austere financial diet: Cut spending, eliminate bad habits, pay down debt, and come up with target numbers for how much net worth to accumulate and when to accumulate it by. To come up with their FI number, FIREs followers multiply the total amount of their yearly living expenses by 25. This formula uses whats known as the 4 percent rule, derived from a 1998 academic paper referred to colloquially as the Trinity study that recommended withdrawing no more than 4 percent of your portfolio (savings, retirement funds, stock market investments, etc.) every year post-retirement. According to the US Bureau of Economic Analysis, the average American saves a little more than 8 percent of their annual income after taxes. FIREs followers aim to save half, if not more.

Financial independence and its pursuit predates the term FIRE by a few decades, going back at least as far as the landmark personal finance book Your Money or Your Life, which became a bestseller in 1992 after its co-author, Vicki Robin, appeared on Oprah and shared with the audience some simple math: If it takes X time to make Y money, and you need Y money to buy Z stuff, then stuff equals time. When Oprah waved her hand over a rack of jewel-toned clothes and asked Robin to impart her algebraic wisdom, Robin who retired at 24, in part thanks to an inheritance from her grandmother responded, This is six weeks of your life.

But Robin and her co-author Joe Dominguez proffered a solution: Become financially independent, i.e., accumulate enough net worth to quit your job, and you will be freed from the binds of stuff because of the plain fact that you will no longer have a seemingly endless supply of money with which to buy it. The book didnt lead legions to embrace extreme frugality en masse (though Your Money or Your Life sold 600,000 copies in the first five years, and more than 1 million to date). It did, however, attach a personal price tag to capital-W Work, and would become a foundational text for other folks desperate to find a way off the hamster wheel of capitalist life.

Your Money Or Your Life didnt lead directly to FIRE either, exactly. Tracing FIREs history is tricky, in part because its tenets were developed on disconnected personal blogs, largely helmed by people who either believed that theyd discovered some secret sauce, or who discovered one another (and Your Money or Your Life, whose co-author was eventually considered FIREs godmother).

Its even unclear when the FIRE-specific brand took off. The movements reluctant and beloved de facto leader, Pete Adeney, doesnt even know. Your guess is as good as mine in this department, he says via email.

Adeney, 45, doesnt love the name FIRE. He prefers retired to fired or FIREd, which is how some prefer to describe their voluntary unemployment status. More specifically, he prefers Mustachianism.

Youd be forgiven if youre not familiar with Mustachianism, a philosophy of financial freedom through badassity that Adeney spun out of his popular blog, Mr. Money Mustache. But within the FIRE community, Mr. Money Mustache is required reading, a colorful compendium for anyone serious about achieving FI, and Adeneys word is near-gospel. A former software engineer, he retired at 30 and started the blog in 2011 to proselytize his idiosyncratic version of personal finance. (It was his blog that inspired Rebecca.) More a Gen X-er than a millennial, and having long settled into retirement, Adeney serves as a model within the FIRE community of what is possible.

Once you are off the [tread]mill, youll feel like Neo did when he unplugged the suction cups from his pale naked body in The Matrix and looked around at the other imprisoned humans, Adeney blogged in his very first post. Holy Shit!, you will say. Ive been living in this ridiculous slave world and never noticed...and everyone else still is! WAKE UP DRONE PEOPLE!!!

Its supposed to be a bit of a cult, Adeney told the New Yorker back in 2016. The rest of society oppresses us. We have our own symbols. The bicycle, the hatchback. Adeneys language is evocative, to say the least. Americas Car Clown culture and Exploding Volcano of Wastefulness aside, Adeney is after a revolution. [A]s we lift up the poorest among us, we also need to cut back the environmental destruction that we rich people are causing, Adeney who says his annual expenses in Longmont, Colorado, are under $25,000 tells Vox via email. Culture, he says, must change from the top down.

In many ways, it already is. Were in a moment in which giving up stuff, not acquiring it, is an aspiration. Look to the declutter craze inspired by Marie Kondo; the zero-waste movement that celebrates reducing ones garbage output to one mason jar a year; and the trend away from consumerism with the Buy Nothing Project. Millennials prefer experiences to stuff, we hear again and again.

If the popularity of these concepts is any indicator, the idea of freedom from capitalistic tendencies isnt so abhorrent for plenty of people. Striving is a millennial way of life, and in that way, were a generation primed for FIRE. As Robin told the Wall Street Journal last year, millennials understand that the system their parents built is coming apart.

Adeneys ascetic lifestyle is clearly inspirational to those who have followed his blog over the years. The message is also transfixing, channeling our worst fears about capitalism and our powerlessness over stuff. Most of our spending is a sign of weakness, Adeney told The Tim Ferriss Show in 2017, and its a bunch of stuff that we do to compensate for our weaknesses, because we couldnt solve the problem in a smarter way. For Adeney, its not really about luring the American workforce into early retirement, but instead about breaking moneys grip on the masses, about the end of Work to Buy and Buy to Maintain. Abstaining from consumerism is evidence of piety, restraint, and dedication to the cause.

But the flip side of this message is that those who still participate in that cycle are weak and dont have Adeneys problem-solving skills. FIREs bootstraps outlook, however, isnt necessarily accessible to the vast majority of Americans who work not to buy, but to survive. Nearly 17 million households live in poverty, including 5.3 million households headed by a millennial; and credit card debt is a major hurdle for millions of US households, too, with more than half of credit card holders owing debt. A quarter of US adults have no retirement savings, and 28 percent dont have a rainy day fund for emergencies. Any single one of these factors could make it impossible to retire early, let alone a combination.

Adeney acknowledges that hes not talking about the working poor or to them when he makes these sweeping statements. As he puts it to Vox, Getting rich people excited about consuming less is by far the most effective way to [protect the environment], which is why I mainly write articles targeted at my fellow wealthy Americans.

Elizabeth Willard Thames, who blogs about her young familys frugal lifestyle, has been candid about how privilege allowed them to retire early to the woods of Vermont. On her blog, Frugalwoods, she catalogs a number of factors that made her and her husband, in her phrasing, advantaged from birth: They were raised by parents with college degrees, they didnt grow up in poverty, their families are loving, intact, and they are white. She also cites a number of smart decisions weve made thanks to our privilege, namely that they went to college, have never been in debt (apart from their mortgage), worked in high-paying jobs, are healthy, and delayed having children.

I wish I could say that if everyone would just save a little more, and live a bit farther below their means, and avoid buying an SUV, theyd be able to quit their jobs and live the life they crave, writes Thames. But thats not the reality. Theres structural privilege inherent in our ability to pursue financial independence at a young age.

Personal finance expert Erin Lowry, author of Broke Millennial, is a self-described cynic when it comes to FIRE, though she understands its appeal. Its aspirational in a lot of senses, she says, to have that level of autonomy over your life at such a young age, to feel like you can opt out of the traditional workforce and have a lot of control. However, there are certainly some pieces of the puzzle that do not fit together quite as neatly as it sometimes gets presented.

Sometimes (not always), an inheritance eases the road to FIRE, as it did for Rebecca and Robin. Sometimes (not always), a successful career in a lucrative industry helps, as it did for Adeney. Sometimes (not always), one-half of the household continues to earn income. And often, early retirement means leaving the grind, only to change careers.

Much digital ink has been spilled on FIRE blogs and forums about the definitions of work and retirement, definitions that dont necessarily align with how critics, average Americans, and the dictionary define both. Many FIRE-ers continue to work. Operating real estate rentals and picking up side gigs are two common FIRE recommendations, not to mention pursuing passion projects.

This is where FIRE draws some flak from its critics. While FIREs seductive premise is that followers can retire early and quit work wholesale, some of the most public-facing FIRE-ers arent living solely off their savings and investments. Their work, often FIRE-related, translates into money podcasts monetized through ads, blogs that earn money through ads and affiliates, speaking engagements, book deals, etc.

Our Next Life blogger Tanja Hester, who declared herself retired at 38, does not monetize her blog, and calls for income transparency among other FIRE bloggers. She has noted she did receive a small advance for her book published last February, appropriately titled Work Optional.

Thames monetizes her blog through affiliate links, earning a commission each time a reader buys something through that link; she also made money off her book deal, and her husband continues to work remotely. [W]e work because we enjoy what we do not because we need the money, Thames writes on her blog. This is the extraordinary privilege of financial independence.

True dictionary-definition retirement, FIREs followers argue, isnt the goal, anyway. Its being able to do what they want. And sometimes they want to make money albeit in a different way.

I quit my job, which was very comfy, and made a lot of money in terms of what I was doing, but I wasnt happy, says Jamila Souffrant, 37, of her former life as a commercial real estate executive. Souffrant and her husband, who live in Brooklyn with their three young kids, paid off debt, saved and invested $169,000 in two years, and left corporate America behind. (Her husband continues to work as a teacher.) She started her blog, Journey to Launch, to chronicle her path to financial independence by 40; now the blog, along with a corresponding podcast and her personal finance business, are Souffrants full-time work. This is a freedom that everyone looks for and wants, she adds.

Theres freedom, too, many in the community argue, to decide how intensely to FIRE. For that reason, the FIRE community uses certain tags Fat FIRE for less stringent savings and a longer road to upper-middle-class retirement; Lean FIRE for minimalist lifestyles and retirement ASAP at whatever cost. Barista FIRE for those picking up part-time work in retirement (such as becoming a barista).

Fat and Lean and all the rest are largely irrelevant labels for Kiersten and Julien Saunders, though they dont abide by frugality dogma on the one hand, and are well on their way to financial independence on the other. FIRE, for them, is a little bit of art and science, says Kiersten, 35.

Kiersten adds that despite the current lack of diversity, the community is one of the more welcoming ones shes participated in, and the space is changing for the better. But the disparity, they say, comes down to cultural differences. There are expenses they prioritize that are specific to their lives as people of color that might otherwise be considered expendable by FIRE die-hards.

Kiersten cites self-care as critical in helping people of color heal from microaggressions and trauma endured in daily life, and high-quality day care as essential in giving black children, and black boys in particular, the best chance at lifelong success. Their budget, as a result, doesnt resemble some of the more spartan budgets elsewhere in the FIRE world. We give ourselves the freedom to let life happen, and then stay on the path to the best of our abilities, adds Julien.

Souffrant is after work flexibility. I think thats more realistic for a lot of people, versus, theyll never work again and retire in five years, she says. I dont think that necessarily can be possible depending on peoples lifestyle and goals. Souffrant adds that shes not particularly frugal herself. Im not like, Oh, I want to only spend $20,000 a year. Living in Brooklyn is expensive. Kids are expensive. Souffrant made FIRE fit her lifestyle, not the other way around.

Lisa Harrison thought that her future was FIRE. In 2015, the now 44-year-old corporate scientist Googled phrases like extreme savings, budgeting, and how to become rich, and stumbled on the Frugalwoods and Budgets are Sexy. Even in 2015, I didnt know what a blog was, she laughs. She read personal story after personal story, and just like that, she had a new life plan.

Im working in corporate America, and Im sitting under those fluorescent lights in a cubicle, so it really spoke to me, says Harrison, who lives with her husband and 10-year-old daughter in suburban Pennsylvania. They paid off their debt, and took a hatchet to their budget, line item by line item; anything inessential, from their Pizza Fridays to Coffee Date Sundays, was out. Soon, Harrison and her husband had achieved a savings rate of 70 percent. Shed even started a blog to document her journey to FIRE, too. And they were miserable.

Harrison grew up in a trailer, the youngest of four. Money was always tight, and shed put herself through night school while working in a factory, soldering electrical components together. She never expected the frugality she adopted for FIRE to dig up memories of the deprivation she used to feel. But it did. I feel like sometimes thats what happens with the FIRE movement. Youre so entrenched in, Do it cheaper, do it better, dont do this, dont do that. And you dont allow yourself to enjoy the journey. We want to enjoy our lives both now and later.

Mental health is a big concern for FIRE critic Lowry. The movement almost gets presented as this cure-all for angst and anxiety that youre feeling in your day-to-day life, says Lowry. A lot of money and quitting your job is really not going to be the solution to anxiety and depression that some people think it might be.

Suze Orman has heard of FIRE, and has her own critiques. I hate it, Orman, the Matriarch of Money told Paula Pant on her Afford Anything podcast last year. Ormans issue isnt with FI, but with the RE, as it is for many FIRE critics. To Orman, FIREs followers are unprepared for the cost of unforeseen illness and health emergencies such as accidents, living expenses rising after 60, paying for kids educations, paying for aging parents care, inflation, stock market crashes, missing out on the compounding years of a retirement plan by drawing down early (even if you dont plan to), and on and on. You want to retire early? You can do it if you want to, Orman concluded; it would just be the biggest mistake, financially speaking, you will ever, ever make in your lifetime.

The FIRE communitys response was swift. Robin called Orman a wet blanket on FIRE on her blog. Adeney dubbed Ormans appearance a crazy interview on his blog. [M]oney will not cure your fear, as mega millionaire Suze proves so clearly, wrote Adeney. If you are afraid of what might happen in the future, you have a mental problem rather than a financial problem.

Some FIRE recommendations make sense. Achieving any savings rate, much less a high one, is a step in the right direction, especially considering that a quarter of Americans have no savings at all. And the advice to invest in low-fee index funds, says Yale University professor of finance James Choi, is a good idea, in part because it allows for diversification of your portfolio at a relatively low cost. FIRE-ers, by and large, do not advocate drawing down on traditional retirement accounts early, and Choi agrees.

But is FIRE based on good advice? Or even tenable advice? Its not crazy advice, says Choi, but it is complicated. Dividends paid from investments may not provide a sustainable stream of income, as Choi puts it, to your net worth, particularly as worries about an imminent recession have returned. And this months dramatic spiraling of the stock market amid Covid-19 fears revealed how quickly the value of an investment portfolio a key element of FIREs financial model could simply disappear. On the Frugalwoods blog, Thames responded to the corona virus-related instability by acknowledging those fears, but doubled down on her faith in the market: I can tell you what my husband and I are doing with our money: were not touching it. Were not tinkering with our retirement investments, were not selling our taxable investments, were not buying tons of stock, were doing nothing.

The 4 percent rule raises concerns for Choi, too. That rate only makes sense if the stock market and personal investments are humming along well and if your individual spending needs dont go up. And for retirees who will eventually tap into Social Security, the fewer years they work and the less they earn, the fewer Social Security benefits they collect. Theres a lot more risk if youre trying to finance 50 years of retirement and not run out of money, says Choi.

But most important is the hard truth: For most people, all of this will sound like meaningless steps toward a fantasy. As life expectancy goes up, the US faces a retirement crisis, because much of the aging baby boomer population will not have enough money saved to retire.

Teresa Ghilarducci, a labor economist and retirement security expert at the New School, says that about half of middle-class people will be poor or near-poor retirees.

Rebecca is quick to point out that the family inheritances she received were critical to her achieving FIRE; she didnt need to start out on her path to a million-dollar net worth from zero. Robin, too, started her journey to Financial Independence in 1969 with an inheritance of $20,000.

But thats one of the little secret sources of wealth that most people dont have, says Ghilarducci, adding that FIREs irrelevance to the great majority of Americans lives renders it somewhat elitist. Thats an argument that FIRE-ers rebut, arguing that you dont need to start out with a lot of money to spend less and save more, and that FI simply emphasizes personal responsibility.

This criticism arises from the mistaken all-or-nothing assumption that you need to reach full financial independence before you get the benefits, Adeney tells Vox. In reality, the principles I am teaching are the opposite of elitist they make a bigger improvement in your life the lower you are on the income scale.

Still, says Ghilarducci, Its very, very, very expensive not to work.

When Rebecca quit her job in mid-November, it was ahead of the deadline shed set for herself. Since then, shes been traveling. Her physical health has improved, she tells Vox via email from Australia. She wakes up earlier, watches less TV, exercises regularly, and eats less junk food. Still, she worries about money. She has to remind herself to stay positive, that she did the math right, that she has the cash reserves to do this. Ive always struggled with being too self-critical, to the point where it has been detrimental to my mental and emotional health, she writes. Hitting my FIRE number hasnt helped me with that. What it has done, however, is to give me the time and space that I need to look more inward and let me begin healing.

She opted to not tell her bosses about FI, or that what shed done was not actually quit this particular job but leave the grind altogether. Instead, she said that shed be taking time off to travel. She worried that there were misconceptions that being financially independent meant being a megamillionaire.

She was surprised at how calm she remained during the short exchange. Her bosses were taken aback, but asked no follow-up questions.

I wish I could say that it was like on TV, where I poured my heart out and then danced a jig as I left the building, Rebecca blogged later in a celebratory post. But she didnt. I didnt want to burn any bridges.

She might need them later as a reference.

Stephie Grob Plante is an Austin-based features writer and essayist. Her work has appeared at The Goods by Vox, the Atlantic, Smithsonian Magazine, The Verge, Curbed, Southwest: The Magazine, Playboy, and elsewhere.

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FIRE and the implausible millennial movement to save, invest, and quit the American workplace - Vox.com

3 money moves one self-made millionaire is taking in response to the coronavirus pandemic – CNBC

In 2010, Grant Sabatier joined the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire in your 30s or 40s.

In just five years, he saved over $1 million, enough to consider himself "financially independent," which gave him the freedom to start living a more entrepreneurial life. He founded the site Millennial Money, which helps others fast-track financial independence and reach early retirement, and he wrote the book,"Financial Freedom: A Proven Path to All the Money You Will Ever Need."

While Sabatier, who now lives in New York City with his wife, has a big cash cushion to fall back on, even the self-made millionaire is feeling the effects of the coronavirus pandemic, which has put major stress on the U.S. economy.

Here are three changes he's made with his money in response to the pandemic and its crushing economic impact.

Most financial advisors say to leave your investments alone in times of uncertainty and when the market is volatile.

Sabatier is following that advice for the most part: "I did sell some of my Amazon stock and diversified my portfolio a little bit." He wasn't planning on doing any rebalancing, "but I was a little overexposed in individual equities," he notes.

In general, though, he's keeping his hands off of his investments, staying the course and sticking to his long-term plan. Ignoring the urge to panic and pull out of the market is easier said than done, even for Sabatier: "I have to keep reminding myself that you only lose money when you sell, and so the losses themselves haven't been realized."

As a precaution, "I took out 10 grand in actual cash because I think there are certain times where ATMs could get frozen or a bank could stall," says Sabatier. "Having actual cash, and money across a couple of different banks, I think is a wise decision."

Other experts arequick to reassure consumers that if your money is parked in a bank insured by the Federal Deposit Insurance Corporation(FDIC), it's safe and there's no need to cash it out.

It doesn't hurt to have money across different accounts, though. Financial planner Scott Cole recommends having three to six months' worth of living expenses saved across two different accounts. Keep about $1,500 in the savings account tied to your primary bank and put the rest in a high-yield savings account, where it will likely earn you more in interest, he says.

If you need to dip into the $1,500 for an emergency, it will be readily accessible. Then, you can replenish the amount you used with savings from your high-yield account.

Sabatier used to check his net worth every day. It was a way to monitor his financial progress and stay motivated to reach his goals.

While he has a substantial cash cushion and isn't worried about his financial situation right now, "I'm human, so when your net worth drops 30% in a matter of 10 days, it sucks and that hurts and you feel it."

That's why he's putting the habit of looking at his account balances on hold: "I know things are going down." He's accepted that, for the time being, he's in "a preservation phase, and not a growth phase," but trusts that the markets will bounce back. When they do, he'll start checking his net worth again, but in the meantime, he doesn't need the stress and anxiety that comes with seeing your numbers drop.

Another way to stay focused on the long run may be to tune out some of the daily headlines. That's what investing legend Warren Buffett does. It helps him focus on where businesses will be five, 10 and 20 years from now, which is really what matters.

"I don't think I can make money by predicting what's going to go on next week or next month," Buffett told CNBC's Becky Quick. "I do think I can make money by predicting what will go on in the next 10 years."

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3 money moves one self-made millionaire is taking in response to the coronavirus pandemic - CNBC

Self-made millionaire says the concept of retiring early ‘will disappear’ due to the coronavirus pandemic – CNBC

Americans are starting to feel the effects of the coronavirus pandemic, which has left few industries untouched. Some employees are already out of work and millions could end up losing their jobs in a potential recession.

The pandemic could even wipe out what's become known as the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire in your 30s or 40s.

That's according toGrant Sabatier,Millennial Money founder and author of "Financial Freedom.""I think the whole idea of retiring early ... will disappear because of this," he tells CNBC Make It. "It's just not going to be as easy, even for people who have been saving up, and it's not going to be as attractive of an idea."

Sabatier started his own financial independence journey in 2010, before the movement really took off. He saved over $1 million in five years by launching a bunch of side hustles and setting aside upwards of 80% of his income.

Despite the movement's growth over the past decade, Sabatier says the concept of retiring early has already started to lose steam among younger generations. And the impact of the COVID-19 pandemic on the global economy and markets could be enough to eliminate the movement altogether, he says.

But that wouldn't necessarily be a bad thing, he says. "I think that idea of retiring early is, thankfully, disintegrating in the sense that, work is an important part of life. Work is healthy," he explains. "Doing something that you're passionate about is healthy. And money is often a byproduct of the things that we do to create value in the world."

Work is healthy. Doing something that you're passionate about is healthy. And money is often a by-product of the things that we do to create value in the world.

Grant Sabatier

Founder of Millennial Money

Sabatier, who became a millionaire before 30, didn't work a handful of side gigs and saveanextremepercentage of his income to stop working and settle down. For him, it's been less about retiring and more about "having freedom and options and choices," he says.

If you're intent on retiring early, use the extra time you may have right now to reflect on why, he suggests. "I often see people who want to retire early because it's something else to chase it's another trophy to get. When, in reality, so much of what they want they already have. Or, they're much closer to what they want than they realize.

"In this time when we're all quarantined and have a lot of time to think, think about why you really want to retire early. Do you still want that amidst the increasing uncertainty of our times?"

Sabatier encourages people still interested in the movement to focus less on the "retire early" part of FIRE and more on the "financial independence" aspect: "At its core, it's always been about using money to build a life you love and being intentional about your spending so that you have more time and options in your life."

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Self-made millionaire says the concept of retiring early 'will disappear' due to the coronavirus pandemic - CNBC

Prince Harry and Meghan Markle Could Have a ‘Very Tricky Path’ to Financial Independence After Coronavirus Outbreak, Source Claims – Showbiz Cheat…

When Prince Harry and Meghan, Duchess of Sussex decided to stepback as senior members of the royal family, their main goal was achieving financialindependence from the crown while still supporting Her Majesty, QueenElizabeth.

But their split from the The Firm occurred long before thecoronavirusCOVID-19 absolutely demolished the worlds financial health in a matter ofweeks. While Meghan and Harry were probably feeling confident about makingmoney before, there is a significant lack of speaking engagements currently.

Suddenly, the prospect of making money isnt so simple forthis former royal couple.

The Duke and Duchess of Sussex essentially wantedto pick and choose which parts of the royal life they participated in. Theywanted to retain the good parts, like money, power, and prestige, while rejectingtheir least favorite aspects, like participating in the Royal Rota and remainingpolitically neutral.

It became quickly apparent that this approach was nevergoing to work Harry and Meghan were free to leave if they wanted, but theycouldnt just create royal roles as they wished. Queen Elizabeth sent thecouple words of encouragement but remained firm on her stance. They couldntuse the word royal in their branding, for instance. And yes, theyd have topay their own way.

That seemed easy enough when they first quit Harry evenlined up a high-profile speaking engagement at a JP Morgan Summit in February.But now events such as this have been canceled indefinitely, leaving Harry and Meghanstuck withoutan income stream.

Though it seems that way now, the coronavirus pandemic wontlast forever and life will eventually return to some kind of normal. However,financial ramification from business shutdowns that go on for weeks or monthscould wreak havoc on the economy. No one knows what will happen next.

A palace insider told U.K. based broadcaster Neil Sean thatPrince Harry is keenly aware how much the pandemic hasaffected his plans. The worldwide health crisis has plunged the worldinto a financial climate unheard of before and the opportunities for companiesto waste cash by booking celebrities to speak at conferences [arent thereanymore], said Sean. Now it could be a very tricky path to becomefinancially independent.

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These are uncertain times. And now, more than ever, we need each other. We need each other for truth, for support, and to feel less alone during a time that can honestly feel quite scary. There are so many around the world who need support right now, who are working tirelessly to respond to this crisis behind the scenes, on the frontline, or at home. Our willingness, as a people, to step up in the face of what we are all experiencing with COVID-19 is awe-inspiring. This moment is as true a testament there is to the human spirit. We often speak of compassion. All of our lives are in some way affected by this, uniting each of us globally. How we approach each other and our communities with empathy and kindness is indisputably important right now. Over the coming weeks, this will be our guiding principle. We will be sharing information and resources to help all of us navigate the uncertainty: from posting accurate information and facts from trusted experts, to learning about measures we can take to keep ourselves and our families healthy, to working with organisations that can support our mental and emotional well-being. In addition, we will focus on the inspiring stories of how so many of you around the world are connecting in ways big and small to lift all of us up. We are all in this together, and as a global community we can support each other through this process and build a digital neighbourhood that feels safe for every one of us. We look forward to sharing more over the days and weeks to come

A post shared by The Duke and Duchess of Sussex (@sussexroyal) on Mar 18, 2020 at 8:17am PDT

Unlike so many other people, Harry and Meghan are not in anydanger of losing their homes or not being able to put dinner on the table, eventhough theyre losing income in the coming weeks. Both have a healthy cushionof funds to fall back on if this pandemic drags on for several months. At the veryleast, they should be putting their multi-million dollar house hunt on hold.

The Duke and Duchess of Sussex have been using Instagram to spread messages of positivity and hope during the crisis. They encouraged fans to take care of their mental health in the days ahead. With everything going on, its a lot to take in. Many of us may feel confused. Or alone, or anxious or scaredand in isolation, some of us may just feel bored, or that you dont know what to do with yourself without your normal routine. Its perfectly normal to be feeling any of these things, they wrote.

But heres the good thing (because right now we need to hear good things, right?), they continued. Yes, there is isolation and physical distancing, but there doesnt have to be loneliness. They went on to share some resources to help fans survive social distancing.

These royals have no idea how coronavirus will affect their future. But theyre hoping to come out stronger than before.

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Prince Harry and Meghan Markle Could Have a 'Very Tricky Path' to Financial Independence After Coronavirus Outbreak, Source Claims - Showbiz Cheat...

Welcome to the March issue of Voxs The Highlight – Vox.com

FIRE which stands for Financial Independence Retire Early is a niche financial planning movement thats resonated with Americans in their 20s, 30s, and 40s, who see FIREs dogma of extreme frugality as a path to leave the workplace behind.

Now, as the battle against the coronavirus leads to unemployment and economic uncertainty, our cover story looks closely at FIRE, whose followers were often directly affected by the financial crisis of 2008 and who by and large believe theyre girding themselves for the economic realities of the future.

But FIRE remains strikingly improbable for most Americans. How can anyone dream of quitting their job when many of us can barely stay afloat? asks Stephie Grob Plante.

Also in this issue, we go deep into the forests of Ecuador to meet Gordon Hempton, an acoustic ecologist trying to convince the world to preserve quiet. Today, noise is linked to myriad health problems and is changing animals behaviors. If were being suffocated by our own din, the first quiet park on the Zabalo River promises to show visitors a different way to live.

Later, we explore the myth of the Midwest, and finally, cartoonist Terry Blas returns with a personal comic about finding pride in multilingualism in a time of xenophobia.

Financial Independence Retire Early, with its emphasis on extreme frugality, grew in popularity after the last financial crisis. But can the movement prepare its followers for the next one?

by Stephie Grob Plante

Deep in the forests of Ecuador, preservationists have created the first quiet park, with hardly a peep from humankind. Now theyre hoping the tourists will come and spread the message of quiet.

by Sam Goldman

How the Midwest became a symbol of whats ordinary, wholesome, and practical and why this idea endures.

by Phil Christman

Answering a call from Mom in public suddenly takes on new and nerve-racking meaning.

by Terry Blas

Original post:

Welcome to the March issue of Voxs The Highlight - Vox.com

How To Use The COVID-19 Shelter In Place Orders As An Early Retirement Test-Run – Forbes

After Tanja Hester retired in 2017, she spent the next couple of years traveling, enjoying the outdoors near her Lake Tahoe home and writing a well-received book on the tactics to retire in your late 30s or 40s. Despite all this activity, as the world shelters in place in an effort to fend off COVID-19, or the novel coronavirus, Hester has a piece of advice for those that hope to retire one day at an extremely young age: Use this time to practice.

If youre struggling with the isolation or, for some, an increased amount of free time, its not any better when you leave the job and theres no structure at all, says Hester, author of Work Optional: Retire Early The Non-Penny-Pinching Way, who also blogs about her retirement life at Our Next Life.

For many employees, theyre dealing with working from home for the first time. The inability to leave the house has left millions feeling the impact of the isolation that can typically accompany a work-from-home lifestyle. But its that isolation that those who retire early have to prepare for.

With sheltering in place orders spreading across the country, the isolation can stress test your ... [+] notion of early retirement.

Only about 8% of retirees step away before their 50th birthday, but the past decade, along with a bull run that finally met its end in March, had given rise to the Financial Independence Retire Early (FIRE) movement. The notions within the group, super-saving their way to retiring as fast as possible, also meant you would have a lot of time to deal with your post-work life. While some may dream of flying off to far flung places, many others often use the tactics simply to escape the nine-to-five without a plan for what their days will look like once they leave the structure of a job behind.

While it might be difficult to find the silver lining while sheltering in place as dread fills the air over health and economic concerns, for those that have long sought early retirement, you can use the time as a wakeup call, says Hester. Isolation is part of the equation when you step away from the job at an extremely young age; this is an unusual chance to plan for it now.

Check in on your relationship

If you and your spouse spent the past week barely able to stand the sight of each other, then its time to work on the relationship, says Hester.

If both of you plan to step away from the job, then once that occurs, youll have more and more time with each other. For some relationships, thats a good thing. For others, it can draw out problems that already existed. Early retirement isnt a cure-all for divorce.

For Hester and her husband, Mark Bunge, it took them time to get in a routine that worked for both of them. They found that when they take trips, for instance, its best to keep them to four weeks at a time. Since they have their own hobbies, the length allows them to experience a new world, but then gets them back home to enjoy their individual pursuits.

He doesnt always want to do all the things I want to do, says Hester. But since theyre no longer a scarce resource to each other, Hester added, it required creating a new rhythm in their relationship to ensure they spend enough time together without stepping on their personal hobbies.

Tanja Hester retired at 38 to travel and write a book. It's the inability to handle isolation that ... [+] she finds ruins many early retirements.

The key to all of it, however, was that they discussed early retirement and savings strategies prior to stepping away from the day job. It wasnt one person leading the march, but a duel effort.

If youre pursuing early retirement and find all the time with the spouse confounding now, talk to each other about what you each imagine life like, once you no longer work. What do you want to do alone? What do you want to do together?

Allow the life vision to drive the money piece, added Hester.

Ensure isolation isnt everything

Most people dont dream of lounging around their house all day and eating beans and rice for dinner every night, so in many ways, the sheltering in place isnt the ideal test run. But it can provide you with clarity, if you realize that you dont know what you would do on a day-to-day basis.

Its important to remember that most of your friends arent likely pursuing the same goal, so you cant hang out with them each week just because youre now free to do what you want.

Most people come to early retirement, reacting to something, said Hester. For some its burn out from the job. For Hester, it was due to a genetic disability that could limit her chance to ski or hike in the future. People know they want freedom from the day job. Theres less thought to what do I want to be doing, she added.

Instead, youll need to build your own community, one that you can go to during the week. Will you volunteer? Will you take a part-time job working as an adventure guide? Will you start a passion project?

Whatever the case, you can take steps while in isolation today. You can take a class in an area you might want to pursue, sign up for volunteering for once the COVID-19 scare is gone, or launch that passion project. Do you enjoy the thought? It will give you a sense if you need to delve further into developing your post-work goals.

Find your new normal

No matter whether youre seeking an under-50 retirement or simply trying to adjust to a new work style, its about finding a normal that works for you.

For Hester, her schedule took shape as she had more time to let her body drive what and when she wanted to do certain things. Now, her mornings typically start slow, as she takes her time adjusting to the day.

In the afternoon, she will work on something, whether its her podcast, the blog, volunteering or even planning a trip. Then in the evening, its when she and her husband goof off.

A similar back-and-forth takes place during times when the market isnt humming, like the correction weve now entered. It requires eating out less or canceling trips. Its similar to right now, she added.

With the markets down, it requires adaption for those that hope to live on a portfolio for forty or more years. That might mean cutting your own trips or reducing your entertainment budget one year, leading to more time around the house.

In those cases, you have to adjust, just like youre hopefully doing by sheltering in place. If you cant, then it might mean saving more, ensuring your retirement life doesnt demand as many conditions.

Related: Your Money And Coronavirus: A Financial Protection Guide

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How To Use The COVID-19 Shelter In Place Orders As An Early Retirement Test-Run - Forbes

The Best Strategies To Reach Financial Freedom – ETF Trends

By Jon Dulin

There are multiple roads to financial freedom but are you driving in the right direction?

The most important step to financial freedom is understanding what that freedom looks like to you.

It might seem like an unnecessary question but too many people follow the drumbeat for financial independence only to give up in frustration.

If you set out on a road trip with no destination in mind, youre going to run out of gas and get stranded!

Besides just defining that goal so you know in which direction to drive, a lot of people have a conception of financial freedom that may not be as good as they think.

For many people, the idea of Financial Independence, Retire Early (FIRE) is having enough money to quit their job and never work again.

OK, so you ditch the rat race and never work a day againthen what?

At best you become a sun-burnt alcoholic on some far-away beach.

Thats going to get old quick.

You need a purpose, something that gives your days and your life meaning.

For me, financial freedom was enough money that I could devote my time to developing my own business.

It was not worrying about money even when my online assets werent quite generating enough cash flow to pay all our bills.

Now that the business generates tens of thousands a month, financial freedom is doing what I love and never having to worry about money again.

Whether its being able to devote yourself to a charitable cause, running your own business, a hobby or whatever you choose, think about what financial freedom really means to you and about what youll do when you dont HAVE to work for the money.

Knowing where that destination is, you can find it on the map and start planning your course.

Ive found three roads to get you there.

Once youve figured out where you want to go, its time to get in the car and drive. And theres no way to FIRE thats more popular than investing.

Investing is also the easiest road to your financial independence. The boom ininvestment appshas made it easy to open an account and put your money to work.

Note that I said the easiest road, not the shortest.

Investing $6,000 a year and earning the long-term market return of 8% annually, it will take you 35 years to reach that seven-figure payday.

Even if financial freedom means a slightly smaller bank account, investing is like driving to your financial independence in a 92 Camry.

That doesnt mean you should give up on stocks and dump all your money in the other two ideas well talk about next.

Part of the beauty of the other ways to financial freedom is they dont cost a lot (or anything) to get started. That means you can still put your savings in stocks to watch that slow-ride to financial success.

If you decide to invest that hard-earned cash, remember these ideas:

I truly believe that real financial freedom is getting paid to do something you enjoy.

I love growing my online business, talking about financial success and goals, and making that personal connection through the YouTube channel.

Now that doesnt mean its all rainbows and unicorns.

I dont always jump out of bed in the morning and there are some parts of the business that still feel like a job.

But its a whole lot better than the feeling of being stuck in a job I didnt like, feeling like I had no control over my financial future and that my work didnt matter.

In fact, I enjoy running my online business so much, I dont really even think about retirement anymore. I cant imagine not doing this at least for a few hours every day.

And it all started as a side hustle.

Trying to find your side hustle idea? Try these steps:

From consulting or freelancing to writing books, you can make money on any idea.

Dont believe me?

There are 479 video courses on Udemy about solving a Rubiks Cube.

Thats 479 people that are making money from talking about that infuriating puzzle-box of the 80s.

If investing is like driving to your financial destination in an old beater, creating a side hustle is like a Corvette.

Youll still have to work on it and keep it running but it will get you there fast!

Our third strategy to financial freedom, and the favorite for most, is creating streams of passive income.

If you need to get to your financial destination as fast as possible, passive income is like putting the pedal down on a Maserati!

Passive income is money you make without having to do anything after setting it up.

That doesnt mean you never work again. It just means you have an income source producing cash flow while you devote your time to your side hustle or other tasks.

Be careful going after just any idea proposed as passive income though.

As much as I love blogging and creating videos for YouTube, these are pretty far from a passive income source.

The best passive sources are ones that take minimal upkeep or effort after launched.

A few of my favorite passive income ideas include:

Financial freedom isnt a destination you get to overnight.

If it were as easy as a leisurely Sunday drive, we all would have gone there years ago.

Figure out what that freedom really means to you, draw out your map and youll get there sooner than you think.

For many, simply knowing theyre on the right road to financial independence is all the motivation they need to keep driving.

Author Bio:Born and raised in Iowa, Joseph Hogue worked in corporate finance and real estate before starting a career in investment analysis. He has appeared on Bloomberg and CNBC and led a team of equity analysts for a venture capital research firm. He holds a masters degree in business and the Chartered Financial Analyst (CFA) designation. Joseph left the corporate world in 2014 to build his online businesses, first through creating websites and later through YouTube. Booking just $792.41 in 2015 income, hes grown his online assets to an income of $122,400 for the twelve-months to July 2019. Hes published 10 books and has grown the YouTube channel,Lets Talk Money, to over 161,000 subscribers in less than two years.

This article was republished with permission from MoneySmartGuides. View the original articlehere.

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The Best Strategies To Reach Financial Freedom - ETF Trends

Requests for Help Surge from Palm Beach County Residents. United Way and Partners Stand Ready to Meet Basic Needs – The Boca Raton Tribune

$9.5 Million in Requests to Support Nonprofits and Residents in the Wake of COVID-19

Boca Raton, FL Just ten days after launching its COVID-19 Response Fund, United Way of Palm Beach County has seen a tremendous surge in requests from residents looking for help with needs including food, shelter, and access to care.

In the state of Florida, daily claims for unemployment submissions have increased from an average of 700-800 claims per day to 18,000-21,000 claims per day since precautions over the spread of the coronavirus were implemented.

In Palm Beach County, the side effect of trying to flatten the curve of the coronavirus has greatly impacted our local workforce. Many individuals who were gainfully employed, but still living paycheck to paycheck, have been laid off and now find themselves facing sudden economic strain. The 211 Helpline for Palm Beach/Treasure Coast has seen a 200% increase in daily calls for assistance.

As more individuals and families need support for basic needs, United Way of Palm Beach County has also received requests from local nonprofits indicating that they need assistance supporting this influx of clients. United Way has received upwards of $9.5 million in requests from more than 200 local nonprofits.

For the past 90 years, United Way of Palm Beach County has been the trusted source connecting our communitys resources to ensure that residents have enough to eat, a roof over their heads, access to medical care, and other basic needs. In times of crisis, United Ways mission is amplified.

United Way of Palm Beach County is collaborating with other local funders to coordinate efforts and meet emerging needs as quickly as possible. These funders are prioritizing building capacity within our local nonprofits, so nonprofit partners can respond to increasing needs for food, housing, and access to medical care. The nonprofit sector is the safety net for our community in times of crisis. Focusing energy and funds on best supporting nonprofits allows more residents to be served and fortifies our communitys resiliency.

Collectively, United Way and the other six funders have raised more than $3 million dollars. With $9.5 million dollars in funding requests, additional contributions are needed to care for our neighbors in need.

Businesses like Bank of America, Wells Fargo, and Florida Blue have chosen to partner with United Way of Palm Beach County and made generous donations to support ongoing needs of our local community.

To join these corporate leaders and be a champion for our community, donate to the COVID-19 Response Fund for Palm Beach County. Text GivePBC to 41444 or visit UnitedWayPBC.org/coronavirus to make a financial contribution. A gift, no matter how small it might seem, will make a difference and give hope to our community right now.

Residents in need of assistance can reach out to United Ways partner, 211 Palm Beach/Treasure Coast, to be connected with resources and referrals to services. Dial 211 or text your zip code to 898211 for help.

About United Way of Palm Beach County:

For 90 years, United Way of Palm Beach County has been the local leader dedicated to identifying and addressing critical community issues to improve the lives of our residents. We champion community change by strategically uniting key stakeholders and community leaders and investing in successful, sustainable nonprofits. United Way funds 100 local programs and initiatives that provide lasting solutions and measurable results from increasing graduation rates and supporting literacy to ensuring financial independence, promoting healthy lifestyles and ending hunger. When you support United Way of Palm Beach County, you are strengthening your community. To learn more call 561.375.6600 or visitwww.UnitedWayPBC.org.

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Requests for Help Surge from Palm Beach County Residents. United Way and Partners Stand Ready to Meet Basic Needs - The Boca Raton Tribune

Cocooning and lessons from COVID-19 | Community – Dunwoody Crier

In 1981, marketing strategist and trend spotter Faith Popcorn coined the term cocooning. Cocooning was the idea of staying home instead of going out, feeling safe and insulated from perceived danger. In a 1986 piece in The New Yorker magazine, she opined that the concept involves building a shell of safety around oneself. The word is enshrined in multiple dictionaries.

Cocooning, known as the Cocoon Strategy, also refers to a vaccination protocol designed to protect infants and other vulnerable individuals like grandparents from infectious diseases by vaccinating those in close contact with them. A large number of infants are infected by close friends and family, especially the mom.

Cocooning in various forms is de rigueur for the time being, whether required by etiquette, common sense, medical necessity or governmental fiat. With so much shutting down, events and gatherings cancelled, travel deferred, what are we hopefully to learn?

The late Steve Jobs observed, You cant connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.

We might thank William Shakespeare for that elucidation. In Act II, Scene I ofThe Tempest, the evil Sebastian uttered, Whats past is prologue. Jobs and the Bard of Avon understood that whats happened only sets the stage for the future. We have to see the patterns, understand lessons learned, and build the future as we connect the dots.

As investors and planners for our own future and financial independence, we have seen, again, that a bull market can end with blinding speed. We also know that bear markets run their course, as this one will. Many bear slumps are based on negative economic developments. But COVID-19, a classic black swan, landed midst a very strong economy, a plus. A black swan is an unpredictableevent beyond what is normally expected of a situation and has potentially severe consequences.Black swan eventsare characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight. (Investopedia).

This black swan was medical, not economic, but the market tanked because of totally unquantifiable economic fallout, and Mr. Market abhors unpredictability. The consequences have become an economic event, with an overlay of panic given bare supermarket shelves and hours long waits to get into Costco as an indicator.

Because black swans are largely unpredictable, a long term investment strategy should incorporate reserves and the ability to ride out storms that impact equity values. Bull markets in their latter stages are replete with overvalued stocks, and we have seen many market segments move from excess valuations to relative bargains with blinding speed. Market tops and market bottoms are only clearly visible with hindsight, but at some point, relative economic clarity will return as the epidemic wanes and a recovery cycle ensues. How will you frame your investment policy as we recover?

Ebola, SARS, swine flu, Asian flu, avian flu. Pandemics and disease spread are growing threats in our increasingly interconnected, and in many locales, densely packed urban world. In 30 hours or less, an infected traveler can go from one side of the globe to the other. We shall see how effective travel bans and cocooning will be with the current situation. Most flu strains do not disproportionately impact younger people. Older folks, especially, and those with impaired immune systems, can be subject to acute respiratory distress, viral or secondary bacterial pneumonia. A need for more hospital facilities that can handle an influx of seriously ill seniors or other high-risk patients is now recognized. As our population ages and parents and grandparents live longer, the demand for respirators and ventilators could grow given periodic surges of communicable diseases. Government run facilities in other countries have proven less than efficient, something to ponder as we debate national health policy.

Theres danger in being dependent on China for so many important drugs and drug components. Just as we once were held hostage by OPEC, we need more home-grown production independence and diversification of supply chains, not just in drugs, but in numerous areas, including rare earth minerals and key components to electronics and other necessities.

While walking in a park near my home, I struck up a conversation with a young man, late 30s, married with two young children. He and his wife have no wills, no powers of attorney, no basic financial plan. You may worry about global pandemics and your 401(k) while basic planning is incomplete. We often fret over the big picture and things we cant control, as personal and family foundational planning needs are left undone. Think about that

Lewis Walker, CFP, is a financial life planning strategist at Capital Insight Group; 770-441-3553;lewis@lewwalker.com. Securities & advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis is a registered representative and investment adviser representative of SFA, otherwise unaffiliated with Capital Insight Group. Hes a Gallup Certified Clifton Strengths Coach and Certified Exit Planning Advisor.

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Cocooning and lessons from COVID-19 | Community - Dunwoody Crier


This content is being provided for free as a public service to our readers during the coronavirus outbreak. Please support local journalism by subscribing to the The County Press atthecountypress.mihomepaper.com/subscribe/

Even though Gov. Gretchen Whitmers Stay Home, Stay Safe executive order issued on Monday directing the temporary closure of non-critical businesses in Michigan was anticipated by most business owners and managers, it still landed like a gut punch. Especially for those small and medium-sized businesses that had been holding on to employees, creatively marketing their businesses and assuring customers over the last few weeks, as the coronavirus pandemic ramped up, that they were still in business and ready to serve.

Those small and medium-sized businesses are the lifeblood of our communities economies, employing hundreds in each of our small cities, towns and villages and thousands across our county. They pump nearly 70% of each dollar they take in right back into the local economy. Those businesses also provide the opportunity for financial independence, generate job opportunities and create innovation. They are essential to place making in our resurgent downtowns as younger generations discover the pleasures of unique, walkable and friendly retail and entertainment spaces.

Those same business are also the lifeblood of community newspapers like ours. Our papers have a special, symbiotic relationship with our local businesses. We depend on each other they need us to distribute their marketing messages and we need the revenue created by that advertising to fulfill our mission of delivering important news and essential information to our readers.

To say that particular economic exchange, along with commerce in general, has been disrupted is an understatement. In spite of that disruption, View Newspaper Group will carry on with our mission of informing our readers and delivering the marketing messages of our advertisers who are able to continue to serve their customers.

To what degree we are able to continue delivery of the print editions of our free newspapers, like the Lapeer Area VIEW, depends on the duration and severity of our advertising revenue loss. Any interruption in the print editions of our free papers will be temporary. Like all businesses and like all of you, we are taking this crisis one day at a time.

In response to both the health threat of the coronavirus and the resulting economic realities, we have many of our team members working from home, many on reduced hours and have regrettably had to issue some layoffs.

We do plan to continue print production and home delivery of The County Press and our other subscriber papers. If you are a regular reader but not a subscriber of one of those papers now would be a great time to sign up for home delivery. Were offering a special rate that will allow you to receive the paper in your mailbox or on your doorstep or online without having to leave your home.

Our hearts go out to everyone who is enduring any hardship, job loss and anxiety brought on by the COVID-19 crisis. We pray for any who may be infected and their family members. We support and thank our medical personnel and first responders. We salute those who continue to volunteer and serve their fellow humans through nonprofits, civic organizations and individual acts of kindness. We empathize with our friends and colleagues in business and continue to look for ways to support them.

To echo the encouraging words weve heard from many We are in this together and we will get through this together.

Thank you for reading The County Press.

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Kirti Kulhari, Bani J, Maanvi Gagroo and Sayani Gupta Share Experience of Working on Amazon Original’s ‘Four More Shots Please!’ – India West

MUMBAIThe all-girls web dramaFour More Shots Pleaseis set for a second season and the four girls have this to say:

Kirti Kulhari: The concept of the Amazon OriginalFour More Shots Please! intrigued me from day one, and my excitement doubles when we started the shoot of Season 2.

Personally, 2019 has been a milestone for me, starting with the phenomenal success ofFour More Shots Please!and then being part of some of the biggest films of the year, like Mission Mangal. I believe that each viewer will see a little bit of themselves in each character and I really hope they love the second season as much as they did the first.

Bani J.: Ive said this a couple times before, and would like to repeat it because it felt serendipitous to me that I was approached to play Umang. Not because she has an affinity to lift weights, but because of her journey, her story and this unshakable conviction with which she does things in her life: uprooting herself from home, being in love, being herself.

The more time I get to play and be Umang, the more completely I am able to understand and create of her. Its an unusual and quite cool experience for me, being able to play the same character for seasons in a go. Its hard to explain but I think when people watch theyll get it.

Maanvi Gagroo: Life comes to a full circle as we are all set to launch the second season. This show, particularly Siddhi, is very close to my heart, and after shooting for two seasons, I can now understand Siddhi Patel better and why she does what she does. She is a relatable inspiration each time she turns her weaknesses into her biggest strengths.Thisis our labor of love and we are certain that it will receive a lot of love from our audiences.

Sayani Gupta: The second seasonfeels nothing less than coming back in a familiar environment and striving to do something even bigger, better, deeper than the first season. There is a special charm in reuniting and collaborating with the same gang of co-actors, makers and creators.

The first season was infinitely successful and received unprecedented love. It truly is beyond dreams that a forward, rule-bending show likethis receives so much love and craze from fans from all across the board, from all parts of the country and different parts of the world and from all age groups and gender. It also surpassed all preconceived notions that a show made by women on women would be about male-bashing.

Each character had something people could relate to and connect withthe beauty of Four More Shots Please!is that it celebrates four women who are so different, not only in the way they look physically, but also in their personalities. The women in the show are flawed but they completely own it. The show also celebrates women with agency, which is the need of the hour.

Every girl out there should have the right to choose her life-course backed by education and strive for financial independence.The second season will be twice as special. You will see the girls having more fun, the friendship growing deeper and fierceness growing stronger. It is also about accepting their vulnerabilities.I cant wait for the fans who have been writing in everyday for the second season, to watch the show!

The first season gained massive support from the audiences when it was released. The second season will launch Apr. 17on Prime Video in more than 200 countries and territories. The trailer launch will be held Mar. 31.


Four best friends will cuddle up again and tell the world to sit up and pay a little more attention to what women truly want. Womenwill always be womenthe problems remain simple yet complicated and funny to each other. They will make new mistakes, but love each other little more fiercely and choose themselves over societys expectations.

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Kirti Kulhari, Bani J, Maanvi Gagroo and Sayani Gupta Share Experience of Working on Amazon Original's 'Four More Shots Please!' - India West

Use the lockdown to teach your kids the value of money here’s how – Your Money

If you have school-age children at home, youre probably feeling overwhelmed by the prospect of suddenly becoming a pseudo-teacher.

My Facebook feed has gone into overdrive since the announcement last week that schools were closing, with links to lesson plans, online teaching tools and virtual classroom websites.

Other posts Ive seen, many from teachers and school heads, say parents shouldnt stress themselves out trying to plan an entire school day and that any learning is better than nothing.

I guess the message is to try and get a balance between learning, play and screen time!

However, there is one real life skill you could teach your child during this period of lockdown one theyre probably not taught at school and one that could make a real difference to their life: the value of money.

Research suggests money habits are established as early as seven years old, so the sooner kids are taught about budgeting, saving and managing their money, the better.

Here are some practical ways to teach children about finances while they are learning at home, from Dan Scholey of budgeting app, Moneyhub.

Setting savings goals a new toy, game or even more pocket money earned from extra jobs around the house encourages children to budget and work toward an individual goal.

It can be fun, too which children dont like being set a good challenge? Set a realistic, age-appropriate amount, which they can use to buy something online that that really want.

And once they reach it, not only do they see the impact of saving, but its teaching them to be in control of their money which sets them on the path to financial independence for the longer term.

For children at primary-school age, there are practical ways of teaching basic arithmetic. Take a receipt and ask them to work out how many different combinations of coins make up the amount so 2.50 could be two 1 coins and a 50p coin.

Or put up a snack list with prices (high sugar items cost more, low sugar less) with each child being allowed to spend up to 1 per day. Not only does this teach children the value of money, but its a useful tool to give them a better understanding of budgeting, and given the current circumstances, rationing too!

Engaging children in money is increasingly important as we move into a digital, cashless world. The days where children would be sent a cheque for their birthday are disappearing.

Instead, pocket money is set up as a standing order, children have their own debit cards, or credit cards are given as an eighteenth birthday gift.

Children are used to using apps from a very early age, so it makes sense to utilise these tools to bring money to life and make finance fun.

It might seem strange to talk to a child about pensions, but children can learn a lot about saving from older generations. Speak to a retiree and you might find that there are lessons in money they wish they knew earlier in life.

Could they have saved more had they started earlier? Would they have a bigger pension pot if they had known about pensions from childhood? Its never too early to start saving for retirement, and the earlier in life people know about it, the sooner they can start to prepare.

It would be a mistake to underestimate childrens ability to understand and engage with finances. Stereotypes about young people wasting their money on pointless meals and beauty products get in the way of teaching them positive messages. Why cant they buy that expensive coffee or avocado toast, as long as theyve budgeted it effectively?

While they cant yet start investing, they can change behaviour toward budgeting and saving.If you have a Junior ISA for your child, its worth letting them see it so that they can see a longer-term view of how money works in real life, as well as getting them more familiar with the ups and downs of investing.

Lots of banks and money apps now give users the option of sweeping money into aseparate savings pot. This feature can work well for children with debit cards too.

Sweep 30p on a packet of biscuits and while it might not seem like much, it wont take long to accumulate in the long run.

Whats more, children can see what it looks like for money to grow over time, instilling good habits early on and paving the way for bolder decisions like investing.

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Use the lockdown to teach your kids the value of money here's how - Your Money

Ric Edelman Calls on Congress to Waive Distribution Requirement for Retirement Accounts – Yahoo Finance

Edelman Financial Engines Founder asks for policy shift to help retirees struggling with market volatility related to COVID-19

Congress must pass legislation immediately to waive the requirement that Americans 72 and older make Required Minimum Distributions from their retirement accounts, due to sharp declines in account values caused by COVID-19, demands acclaimed financial advisor Ric Edelman, founder of Edelman Financial Engines, the largest independent financial planning and investment advisor1.

"Millions of retirees are being forced to sell shares of their mutual funds and other investments while stock prices are down 30 percent or more," Edelman notes. "In a great many cases, these retirees dont need the money or can get the income they need from other sources. Forcing them to sell during this market downturn merely to satisfy an IRS requirement is punitive and unnecessary during these difficult times."

Edelman, whose firm is ranked the #1 independent financial advisory in the nation by Barrons, and who was personally ranked by Barrons three times as the nations #1 independent financial advisor, says the situation is made worse by the fact that the calculation for making this years RMD must be based on account values as of December 31, 2019. Current account values, he notes, are far lower now than they were just a few months ago.

"Consider a 72-year-old whose IRA was worth $500,000 at the end of the year. If that account is now worth only $350,000, a retiree is required to withdraw 5.6 percent of the accounts value far more than the 3.9 percent shown in IRS tables," Edelman says. "The markets sharp decline is forcing retirees across the country to withdraw excessively large amounts from their accounts, triggering massive tax liabilities needlessly."

Edelman, recognized as one of the most influential thought leaders in the financial planning field by InvestmentNews, RIABiz and Wealth Management magazines, adds that the problem will get even worse if the financial markets continue to decline.

"Congress must fix the distribution rules for retirement accounts immediately, for the benefit and well-being of millions of American retirees during this economic crisis," Edelman says.

About Ric Edelman

Ric is a financial advisor and has been recognized as one of the most influential people in the financial planning and investment management profession by three leading trade publications: Investment Advisor[1], RIABiz[2] and InvestmentNews[3]. Three times he has been ranked as the nations #1 Independent Financial Advisor by Barrons[4] In 2004, he was inducted into Research magazines Financial Advisor Hall of Fame[5] and in 2019, the Barrons Hall of Fame[6]. In 2017, he received the IARFCs Lifetime Achievement Award[7]. Ric is also a Distinguished Lecturer at Rowan University, an award-winning host of one of the longest-running radio show on personal finance in the country, a producer of award-winning specials for Public Television, and a #1 New York Times bestselling author who has written 10 books on personal finance.

About Edelman Financial Engines

Since 1986, Edelman Financial Engines has been committed to always acting in the best interest of our clients. We were founded on the belief that all American investors not just the wealthy deserve access to personalized, comprehensive financial planning and investment advice. Today, we are Americas top independent financial planning and investment advisor, recognized by both InvestmentNews and Barrons with 170 planner offices across the country and entrusted by more than 1.2 million clients to manage more than $213 billion in assets. Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every clients situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves.

For more information, visit http://www.EdelmanFinancialEngines.com and http://www.FinancialEngines.com.

1 Ranking and status for 2018. For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).


Story continues

[1] The Investment Advisor magazine listing of the Investment Advisor 25 is based on readers opinions and highlights those who are ahead of the pack with their insights, innovation and disruption. Advisors and other industry participants cast about 12,000 total votes for leaders in the following six categories: RIA/Advisory; Independent Broker-Dealers; Custody & Clearing; Portfolio, Investing & the Markets; Politics/Regulation/Compliance; and Fintech/IA/AI. Investor experience/returns were not considered as part of this ranking.

[2] The RIABiz listing of the 10 most influential figures in the Registered Investment Advisor industry is in recognition of notable, driven and influential executives who are advancing their firms and are considered influential in the RIA business. Investor experience/returns were not considered as part of this ranking.

[3] Based on the opinions of the editors of InvestmentNews using the following definition as a guidepost: Those who have conceived new ideas and tools that have propelled the industry forward. Investor experience/returns were not considered.

[4] According to Barrons, "The formula [used] to rank advisors has three major components: assets managed, revenue produced and quality of the advisors practice. Investment returns are not a component of the rankings because an advisors returns are dictated largely by each clients risk tolerance. The quality-of-practice component includes an evaluation of each advisors regulatory record." The rankings are based on the universe of applications submitted to Barrons. The selection process begins with a nomination and application provided to Barrons. Principals of Edelman Financial Services, LLC self-nominated the firm and submitted quantitative and qualitative information to Barrons as requested. Barrons reviewed and considered this information, which resulted in the rankings on Aug. 27, 2012/Aug. 28, 2010/Aug. 31, 2009.

[5] Research magazine cover story "Advisor Hall of Fame," December 2004 (based on serving a minimum of 15 years in the industry, having acquired substantial assets under management, demonstrating superior client service and having earned recognition from peers and the broader community for how they reflect on their profession). Investor experience/returns were not considered as part of this ranking.

[6] Barrons Hall of Fame advisers have been ranked for 10 or more years on the Barrons Top 100 Financial Advisors list. Barrons listings are based on data compiled by many of the nations most productive advisers, which has been submitted to and judged by Barrons. Key factors and criteria for each award include assets under management, revenue produce for the firm, regulatory and compliance record, and years of professional experience. This award is not indicative of this advisors future performance.

[7] Presented by the International Association of Registered Financial Consultants (IARFC). Candidates must hold a professional designation and must have disseminated their comments on financial topics by having them widely published in articles, journals, books, etc. They must have provided outstanding personal service or leadership in the financial services industry. Nominees must have participated in some aspect of financial education to the public or to other members of the profession. Investor experience/returns were not considered.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200324005649/en/


Media Amy Conley617-556-2305PRTeam@EdelmanFinancialEngines.com

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Ric Edelman Calls on Congress to Waive Distribution Requirement for Retirement Accounts - Yahoo Finance

$10 a Barrel Oil Is Possible: Can American Energy Independence Survive the 2020 Oil War? – The National Interest

Trust me, this will be a regrettable day.

The declaration by the Saudi energy minister, Prince Abbdelaziz Bin Salman, at the March 6 Black Friday OPEC plus meeting has proven accurate as the worlds energy giants engage in a war over the black gold, causing prices to crash and sparking bankruptcy fears for the entire U.S. shale industry.

With Americas energy independence under threat, can the nations oil and gas industry survive the fallout?

No Plan B

After restraining supply since 2017 to support prices, the fateful meeting in Vienna had seen the OPEC oil cartel seek additional production cuts of 1.5 million barrels per day (bpd) from April.

OPECs core members were expected to slash 1 million bpd and non-OPEC members, principally Russia, some 500,000 bpd.

Ahead of the talks, oil demand was already flagging due to the global coronavirus pandemic and an unseasonably warm January. Iranian oil minister Bijan Zanganeh had indicated OPEC had no plan B if Russia or other non-OPEC members did not accept the deal.

Yet Russia refused to play along, reportedly on the basis that more cuts would simply hand greater market share to U.S. producers.

Saudi Arabias response was to flood the crude oil market by increasing production. It plans to hike output by up to 25 percent to 12.3 million bpd in April, setting off a price war in a bid to regain lost market share.

The oil-dependent Middle Eastern kingdom slashed its April selling prices, putting pressure on Russia and other non-OPEC producers, including the United States. Saudi Arabias neighbors have also flagged output hikes, including an extra 1 million bpd from the United Arab Emirates.

Russia reacted by claiming it could hike production by up to 500,000 bpd to a record 11.8 million barrels once the OPEC plus agreement expires on April 1.

The market reaction has been swift. Already low oil prices fell by more than half, tumbling to an 18-year low of just over $20 a barrel on March 18 after having traded above $50 for nearly five years, and spending nearly a decade around $100.

Morgan Stanley expects Brent crude to trade at around $30 a barrel through the second quarter of 2020, with others warning it could drop below $10 should the stand-off between Saudi Arabia and Russia continue.

Oil is now facing a triple whammy of a price war, COVID-19 and a supply glut, occurring just when the world economy is at its weakest point since the global financial crisis. The pandemic is expected to cut fuel demand by at least 10 percent worldwide, however this could worsen depending on the extent of the global shutdown.

Meanwhile, excess supply could reach between 800 million and 1.3 billion barrels in the first six months of this year, in what consultancy IHS Markit describes as the most extreme global oil supply surplus ever recorded.

The last time that there was a global surplus of this magnitude was never, said Jim Burkhard, vice president and head of oil markets at the London-based consultancy.

Prior to this the largest six-month global surplus this century was 360 million barrels. What is coming will be twice that or more.

On March 24, U.S. West Texas Intermediate crude was trading at around $24 a barrel, with Brent futures at $27 amid expectations of a $2 trillion fiscal stimulus by Washington to prop up a faltering U.S. economy.

Analysts are not confident however that the bleeding will be stemmed.

No one has a handle of how much the world will come to a halt, Edward Moya, senior market analyst at OANDA in New York, told Reuters.

It will probably be impossible for oil prices to continue to stabilize.

U.S. Shale Suffers

The shale boom saw America emerge as the worlds largest crude oil producer in 2018, exceeding output from Saudi Arabia and Russia. The previous U.S. petroleum deficit, which totaled $436 billion in 2008, became a surplus in September 2019, prompting President Donald Trump to declare earlier this year that we do not need Middle East oil.

Even a price crash in 2014-16 caused dozens of U.S. oil and gas companies to file for bankruptcy and hundreds of thousands of layoffs failed to dent the American industrys upward momentum.

Will this time be different?

Energy consultancy Wood Mackenzie estimates that many companies need an average Brent price of $53 per barrel simply to break even. Some $380 billion of cash flow would be erased if Brent prices average $35 for the remainder of 2020.

There is much less obvious excess spend to cut this time around after five years of disciplined investment and austerity. Raising capital is also much harder now, especially for U.S. independents, and upstream M&A [merger and acquisition] market activity is at record lows, said Wood Mackenzies Tom Ellacott.

In addition, many companies have already made the most of the obvious asset sales.

Analysts at S&P Global Platts have projected the U.S. industry will lose some 500,000 bpd in production this year, rising to 1.3 million bpd in 2021 as companies slash output, jobs and investment to stay afloat.

High debt levels will make it more difficult for the American industry to bounce back, should prices start rising again.

One of the reasons we dont see U.S. shale bouncing back as quickly as it did in the 2015-16 low oil price cycle is the state of financial institutions and their willingness to refinance the U.S. shale industry, said Chris Midgley, global director of analytics at S&P Global Platts.

The debt maturing over 2021 and 2022 - $20 billion and $30 billion respectively - will have to be refinanced, and at these prices it will be very hard.

A lack of investor support could be critical, according to Dave Ernsberger, head of pricing and market insight at S&P Global Platts.

The whole shale patch over the past couple of years has been under intense investor pressure to generate positive cash flow, to have dividends and return earnings to shareholders. Any company that said it would outspend and grow production wildly was punished in its equity price, he said.

Now after whats happened in the last week or two, its almost impossible to imagine any high-yield company to be able to refinance anything in the unsecured or secured market.Bond prices have tanked, yields are through the roof, trading at around 20 to 21 percent, so were headed for a lot of defaults and bankruptcies.

Last year saw record bankruptcies and write-downs, with 50 energy companies filing for bankruptcy including 33 oil and gas producers, according to energy law firm Haynes & Boone, with more expected in 2020 given the approaching wave of debt.

The industry is also under pressure from declining well productivity as shale regions mature. IHS Markit estimates an annual decline in output from Permian Basin wells of around 40 percent, requiring an unlikely drilling pickup to reverse, yet expectations are for rig counts to decline by up to 30 percent.

Although U.S. producers have succeeded in slashing drilling costs by around $20 a barrel over the past five years, only 16 operate in fields with new well costs below $35. The Dallas Federal Reserve estimates $50 per barrel as the break-even price for the industry and most have budgeted for prices of around $55 to $65 a barrel this year.

Never bet against technology to find ways to get more efficiency they will need thatbut theyve got some big headwinds in the next 18 months, S&P Global Platts Midgley said.

End Game

Will Russia or Saudi Arabia back down? S&P Global Platts estimates Russians fiscal break-even price at $54 per barrel, compared with Saudi Arabias $82, meaning that both have much to lose from an extended price war.

Yet Russia has accumulated foreign reserves estimated at $520 billion, while Saudi Arabia possesses the lowest cost oil supply together with foreign reserves of around $500 billion and low public debt. Producer Saudi Aramco has boasted an extraction cost as low as $2.80 per barrel, while Russian companies including Rosneft and Gazprom have reported production costs below $4.

Both Russia and Saudi Arabia can wait this out for quite a while before they take real economic pain, Midgley concluded. The analyst expects the price war to continue for the foreseeable future barring a tightening of market conditions, likely at the expense of the U.S. industry.

Nevertheless, low prices threaten Saudi Arabias plans to diversify its economy, with declining state spending risking popular discontent in repressive regimes across the Gulf and in Russia and Venezuela.

Even if oil prices return to around $50 to $55 a barrel, Saudi Arabias international reserves would drop to as low as five months import coverage by as early as 2024, rising a potential balance of payments crisis and the abandonment of its dollar peg, according to the International Monetary Fund.

America is fighting back, with the Trump administration announcing plans to buy up to 77 million barrels of crude and appointing Victoria Coates as special energy representative to Saudi Arabia, amid speculation of a U.S.-Saudi deal to calm oil markets. Some U.S. lawmakers have called for an embargo on foreign oil, while the Texas Railroad Commission has even suggested curbing Texas production to support prices.

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$10 a Barrel Oil Is Possible: Can American Energy Independence Survive the 2020 Oil War? - The National Interest

Financial Independence: How to achieve FIRE w/ $1.5 million

Financial independence is the moment when your investments start paying more than your expenses. Once that happens, youre free.

Free from havingto work for a living.

Free from having to worry about paying rent on time.

And free from a TON of other financial obligations.

BUT how long would it take the average American to become financially independent?

Assuming you earn $75,000 a yearandyour annual expenses are about $60,000, you need to save roughly $1,500,000 to become financially independent.

When youre done picking your jaw up off the floor, Ill let you in on the process of how to get there:

There are no slick tactics or sexy ways to go about this. If youre the average American who needs $1,500,000 to hit your FIRE goal, you need to work hard and be determined. But the feeling of freedom when you reach financial independence will make it all worth it.

Were using the $1,500,000 goal based on the average salary and living expenses of Americans. If you want to find a number more specific to YOUR situation though, youll have to use the 4% Rule.

The 4% Rule is known as the safe withdrawal rate,or the amount of expenses you should be able to withdraw from your savings each year when you retire without touching the principal. (This number is based on a study from Trinity University.)

Finding out your safe withdrawal rate is the first step to learning how to become financially independent.

So how do you find out how much you need to save? Do two things:

This will give you enough expenses to withdraw 4% for years and years to come.

Heres a handy chart to show you how much youll need to save based on possible yearly expenses.

Using the above information coupled with your annual after-tax income, youll be able to come up with an annual savings rate (i.e., how much you need to save each year).

Luckily, you dont have to strain too hard with back-of-the-napkin math to figure it out, as there are a bunch of retirement calculators online. This one is our favorite. It outlines exactly how many years itll take to save depending on your savings rate.

Play around with the calculator until youve come up with a savings rate that works for you. After that, youll know exactly how much you should be saving every time you get a paycheck.

In terms of the percentage, I suggest you save 65% of your after-tax income, says Mad Fientist. That may seem like a ton but its possible. I averaged around 75% to 80% when I was saving.

Meanwhile, Physician on FIRE suggests you should actually save about 50% of your income to go towards your goals.

When pursuing FIRE, PoF says, keep in mind that youre locking yourself into the same lifestyle as when you reach financial independence. [So] if youre making too many frugal choices that dont jive with your persona, start living the way you want to and base your FI target on that.

Remember our example using the average salary and expenses? Looking at the chart, we know now that the average American needs to save about $1,500,000 in order to retire early. Our savings rate will then be about 32% of our annual income each year in order to save enough money to retire early (well go into how long itll take later).

Everyone that goes for FI has to decide something important:Should you try to live as frugally and retire as early as possible and minimize your expenses, or would you rathertake part in the finer things in lifebut retire later?

Luckily, there are two communities that embrace FIRE in different ways that can help you decide.

Bonus: Struggling to take control of your expenses? Check out my Ultimate Guide to Personal Finance to learn how to automate your finances so you can reach financial independence sooner.

There are typically two schools of thought when it comes to financial independence: leanFIRE and fatFIRE.

Though they sound more like weight loss supplements or descriptions of my latest mixtapethan systems for financial independence, theres no need to be intimidated by them.

LeanFIRE and fatFIRE are just terms for how much you plan to live on when you retire, the Mad Fientist says. Theres no better way. Just test out your spending until you find a method that works for you.

While both have the same goal of achieving financial independence, aspects such as how much you spend, save, and even quality of life can be affected by which approach you choose.


This approach requires you to have a low spending rate each year (typically less than $40,000/year).

To be leanFIRE is to subsist on a comparatively low level of spending much like most of us did in college, PoF says.

This means adopting a frugal lifestyle and sacrificing certain luxuries like cars. It can even determine the places in the world you can live in (its easier to live cheaply in Norman, Oklahoma, than NYC for instance).

On the other side of the coin, theres a FIRE movement that aims to keep up the benefits of financial independence while still retaining a life of semi-luxury: fatFIRE.

Bonus: A higher salary could help you reach financial independence sooner. Check out my huge free guide to salary negotiation to get the raise you deserve.


FatFIRE is the system of financial independence that allows you to live a more high-class lifestyle. But it takes longer to complete.

FatFIRE is to be financially independent on a more typical level of spending, PoF says. Id say to qualify as fat, your anticipated spending should probably be somewhere north of the national average.

According to PoF, thatd be an annual spending rate of around at least $80,000. That lends itself nicely to a round number of $2 million saved to have a budget with a 4% annual withdrawal rate, he says.

This is the practice that PoF embraces and his reason might convince you to pursue the lifestyle as well.

Lets assume you dont want to sacrifice your $60,000-a-year lifestyle and want to save enough money to get there. Youll need a higher rate of saving AND earning to do that

which brings us to:

Do you know how long itll take you to save $1,500,000 on a salary of $73,000 and a savings rate of 34%?

More than 26 years.

Thats a long time, and if you want to retire early, you might not want to wait that long.

Luckily theres a way to DRASTICALLY shorten that time: Earning more money.

Earning more allows you to increase your savings AND speed up your financial independence goals. While there are a lot of ways to make more money, the best way is starting a side hustle.Its a big win.

Below are our resources that have helped thousands of readers start their side hustles:

To help you get started, today, I want to show you how to find a great side hustle idea. Its one of the biggest barriers preventing people from starting their own business and making extra income. You can find a great idea by answering four simple questions about your life:

Find an answer to those questions and youll be on the same path as thousands of our students who have found a profitable business idea.

Bonus: Need help coming up with a business idea? Click here to receive your very own PDF of 30 proven business ideas.

A lot of us tend to DREAD the idea of cutting costs and with good reason. Thoughts of not being able to go to your favorite fast food restaurant or your father yelling at you when you change the thermostat just a fraction of a degree often crop up.

Scrutinize and be conscious of your spending, he says. If you see a nice BMW you think you want consider one thing: You could have the BMW or you could be a year closer to not having to work for anyone ever again. Framing it that way helps. Its not like youre saving. Youre working towards your financial freedom.

Conscious of your spending. Conscious spending

I wonder where Ive heard that before?

Conscious spending allows you to know exactly how much money is in your bank account to spend without you worrying about having to make rent and pay the bills, because its already been done for you.

How? Through automated finances. This is the system where your paycheck automatically divvies up and transfers to where it needs to go as soon as you receive it.

Heres a 12-minute video of Ramit explaining exactly how to do it.

NOTE: If youre pursuing financial independence, youre going to want to adjust the percentage of money you put away to savings when you implement your plan. You can choose to save around 65% like Mad Fientist suggests, or you can choose to put half your paycheck into your savings like PoF encourages. Or you could go a different route. Its all up to you and your savings goals.

Using a conscious spending plan also allows you to not sweat the small things you like.

Realize that the small stuff is just that small stuff, PoF says. The biggest expenses are the big stuff like housing, transportation, and travel. Dont rent or buy too much home, spend too much on a luxury auto or lengthy commute, and learn to be comfortable at a Comfort Inn.

Remember: cut things you DONT care about, to focus on the things you do. Dont just indiscriminately cut everything.

You can also learn to cut costs by leveraging retirement accounts that give you amazing tax advantages.

If you want to find out more about awesome accounts like the Roth IRA and 401k be sure to check out our articles on the topic:

But for now, I want to talk to you about an account with fantastic tax leverages you might not have heard of before: health savings accounts (HSA).

According to the Mad Fientist, HSAs are tax-advantaged savings accounts available for people who are enrolled in high-deductible health insurance plans.

He continues, HSA account holders can contribute pre-tax dollars to the account and can then withdraw money from the account, tax-free, when paying for qualified medical expenses.

So you contribute tax-free money AND withdraw tax-free money.

As of writing this, you can contribute $3,400/year for individuals and $6,750/year for familiesto an HSA. By maxing it out each year, you can reduce your taxable income by $3,400.

In 2018, the contribution limits for both individuals and families will go up to $3,450 and $6,900respectively.

Sure, you cant take the money out other than to pay for certain medical expenses but when you turn 65 you can without incurring any penalties.

That means all that tax-free money is yours, effectively lowering your taxed income over your lifetime by $3,400/year.

You should do all that you can to legally reduce your tax burden, PoF explains. If you max out your workplace retirement accounts and an HSA [Health Savings Account], you can deduct a significant sum from your taxable income. Theres only so much a wage earner can do, but do all that you can to pay the least and save the most.

Once you have your retirement accounts set up, youve taken steps to cut costs, and youre ready to earn more money, congrats! Youre on the road to early retirement.

Now I want to offer you something to dramatically cut down the time it takes to save for retirement even MORE:

This guide will give you the exact systems you need to help you earn extra income on the side and eventually achieve financial independence (if you want it).

Youll find our tactics to:

Download a FREE copy of the Ultimate Guide today by entering your name and email below and start your financial independence journey today.

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Financial Independence: How to achieve FIRE w/ $1.5 million

How to Become Financially Independent – The Balance

There are several myths and misnomers when it comes to financial planning, and individuals can take in a lot advice from many good and not-so-good sources. Mistakes can range from confusing high incomes with wealth to not knowing the importance of taxasset placementwhen choosing your investments. This article attempts to shed some light on these areas and to help provide individuals with some key insights that can lead to a more financially independent life.

This guide to financial independence is part of theHow to GetRichtrilogyfor new investors.

Most people believe the key to wealth is a high-paying job. Yes, it's easier to amass assets if you have more monthly income, but one key to increasing your net worth is to spend less than you make. Ultimately, spending habits are the reason a professional athlete making $20 million a year can quickly go bankrupt while a bus driver can retire a multi-millionaire. It may be a clich, but it is a fundamental reality of money.

To escape the spending trap, you need to understand the difference between income and long-term wealth. While income is an obvious component of wealth, it's not the only factor. Many people see wealth as their total net worth at any given time. In other words, wealth can be thought of as the equity on your balance sheetyour assets minusliabilities.

Thinking long term is an important characteristic of accumulating wealth and achieving financial independence regardless of your income level. There are several considerations for long-term wealth, and they will differ for everyone.

If you are a doctor or lawyer, you need to put in long hours after years of education and specialty training to get a paycheck. That paycheck, however, does not necessarily translate to wealth. With long-term thinking, helping to ensure your jobs security, taking initiative to achieve a promotion, or taking steps that will result in higher sales commissions can all be factors for wealth and ways to move toward financial independence.

Side gigs, private investments, and a host of other variables can also be ways to think long term and accumulate wealth. A few considerations here may include a portfolio of private businesses, car washes, parking garages, stocks, bonds, mutual funds, real estate, patents, or trademarks. Some of these cash generators can be relied on for long-term income in addition to your job or just as cash generators that can pull in money while you take long vacations or sit by the pool.

When you take a look at your personal balance sheet, you may already have organic investments you can rely on in your quest for financial independence. Oftentimes, this is wealth that generatescapital gains, income, and dividends without labor. The more of these investments you can afford, the sooner you can fully achieve financial independence.

Overall, the real value of your income is partially determined by the amount you can invest to achieve a financial independence goal. Setting this goal can be important for keeping your perspective on income in check. At your goal, you can successfully maintain the lifestyle you want without working.

Working with a financial adviser can help you to set a goal for wealth accumulation that allows you to maintain your standard of living without an additional paycheck and achieve the financial independence of your dreams. This goal can be lofty,however, as most peoples annual spending includes a long list of budget items, such as mortgage payments, car payments, clothing, college tuitions, music lessons, entertainment expenses, and more.

The only way to take advantage of investment opportunities is to have the money to invest. In successful investing, there is a certain point where you reach critical mass, and the returns generated on your assets can change your life.

Earning a 10% return on $10,000 is only going to net you $1,000 before taxeshardly earth-shattering. But the same return on a $1,000,000 portfolio is $100,000, which has far more utility despite requiring the same effort and research.

Amassing wealth and becoming financially independent is a slow process that takes time. You do small things every daycut your expenses, generate extra income, and put the money into brokerage and tax-deferred retirement accounts. With time, it begins to amount to something.

As each new opportunity appears, you can react on a larger scale than your previous investments. That's calledcompounding. It's when the interest, dividends, and capital gains your money has earned begin to generate their own interest, dividends, and capital gains, and on and on in a virtuous cycle. It's how $10,000 can grow to $2,890,000 over 50 years at a 12% return.

Not all income is equal. Where and how you hold your assets can mean the difference between being somewhat well off and obscenely rich. Those with little or no wealth generate a lot of taxable income, while those who end up financially independent generate large unrealized gains in the form of real estate appreciation, unrealized capital gains, and profits made through tax-advantaged or tax-free accounts, such as an IRAor401(k).

A physician earning $250,000 per year is going to get taxed heavily, probably paying $95,000 in taxes for a net income of $155,000. Yet, if he had earned the same amount from within a pension plan or IRA, he wouldn't pay a single penny in taxes. That's an extra $95,000 per year compounding for him. At 12% over 30 years, that's an extra $23 million in wealth. That's right$23,000,000 simply because the money is earned within a tax-advantaged account instead of regular labor.

This is why you should do everything you can, within reason, to fully fund your retirement plans, as well as to focus on how your seemingly small decisions help or hurt tax planning. No decision is too small.

Gaining complete control over your time is often one factor in achieving financial independence. You may not have totally reached the investing goal that allows you to maintain your lifestyle without an additional paycheck, but if you have the freedom to spend your time how you want to, that might be the most powerful definition of wealth for you.

If each morning, when you show up to the office, or the job site, or the practice field, or studio, it feels like you are unwrapping a Christmas giftthen you are on track for achieving financial independence.

If you find the profession that gives you that feeling, and you are disciplined in managing the business side of it by controlling costs, you have a huge advantage over your competition. You may continue to work 8, 10, 12 hours a day or two, four, or 10 years longer, not because you need to, but because you love the process and product itself.

According to decades of extensive research by Thomas J. Stanley, Ph.D., author ofThe Millionaire Next Door, the grades one earns in school have no correlation with the economic wealth and success outside the medical and legal professions. That's not to say education isn't important88% of American millionaires did, in fact, graduate with an undergraduate degreebut academic performance is not all it's cracked up to be.

Why then, do parents, teachers, and counselors continue to tell children that they won't be successful if they have a C- GPA? Statistically speaking, according to Stanley, it's because often these people are themselves not financially successful. Therefore, they have no idea what it takes to achieve financial independence and thus buy into the great myth that good students go further in life. They measure analytical intelligence only and not the creative intelligence that is responsible for sparking innovations, societal advancements, and crafting solutions in niche markets that so many others miss.

They also fail to realize that most millionaires wear blue jeans, overalls, or work shirts, not a suit and tie. They eat McDonald's and Burger King. They live in ordinary, well-established neighborhoods. Most own their own business.

Statistically, if you want to guess who is going to be wealthy and financially independent, you'd be more likely to guess right choosing a self-sufficient student in shop class who paid for their own car, gets decent (but not spectacular) grades, has a job, and enjoys what they do than selecting someone from the honor roll. It's counterintuitive, but it's often true.

No matter how successful you are, unless your spouse is equally disciplined, frugal, and investment-oriented, your efforts toward a better, financially independent life are going to feel like struggling in quicksand.

The emotional, financial, and social toll that marrying the wrong person can take on your life will overwhelm almost any progress you can make in your career or pocketbook. As you try to build a life, they will be out spending your money, making it nearly impossible for you to achieve financial independence.

It may sound surprising, but a tremendous amount of success is based on proper temperament and psychology. How can you focus on your work and creating the life you always dreamed of if you are worried about the situation at home? To truly build a life, you need to have the kind of support that allows you to take risks because you know, no matter what happens, there will always be someone waiting for you at home who loves you unconditionally and shares your overarching financial goals.

Billionaire investorCharlie Mungerhas remarked that entrepreneurs can thrive if they specialize in an overlooked economic niche, much like animals in nature. Often, these niches are extremely lucrative but not likely to win you friends at cocktail parties.

Conjure up images of a multi-millionaire. What do you see? High-tech 20-somethings on a yacht? Molecular biologists? Although there are a few, most of the big money is in industries such as waste management, pizza, clothing stores, trailer parks, candles, and shipping.

Consider the case ofSam Walton. He built a tiny dime store from the corner of Arkansas into the biggest retailer in the world, amassing a family fortune of more than $191 billion.

There's nothing particularly exciting about selling 50-cent flip-flops and bottles of cheap cologne in small towns, but Walton was on a mission to bring affordable goods to everyday Americans. He was a man possessed with vision. He built his company one store at a timeone might even say one checkout at a timewith no fanfare or red carpet walks.

Business owners represent a disproportionately large segment of the millionaire population. It's hard to believe, but there's a good chance that the biggest hardware store owner or plumber in your town has a net worth many times that of the highest-paid doctor. Part of the reason is a concept we've discussed called capitalized earnings. Another reason is one Dr. Stanley mentioned in his book. Doctors are pressured to buy status symbols to convince their patients they are successful. Not the plumber. They can put more money into retirement accounts. Over decades, the result is millions in additional wealth for the guy who unclogged toilets instead of arteries. That's not something you learn about in school.

It is almost always a mistake to provide gifts of cash and support to those relatives who are unable to generate high incomes on their own or who are constantly in financial trouble.

Consider the incentive system you set up. One son becomes a physician and one daughter an attorney and you say they don't "need" your money, while at the same time you provide free rent, board, and bailouts for their sibling, who sits at home in credit card debt but refuses to look for work.

You have managed to effectively turn that child into a financial and credit junkie; its unlikely they'll ever get over their addiction. The child may tell you that they only need one more loan, but the fundamental, underlying problem is theinability to manage money. The support you give to your relatives should help them become financially independent themselves, not create a dependence on you. That's one way to ensure you'll never have financial freedom.

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How to Become Financially Independent - The Balance

Achieving Financial Independence at Any Age – Forbes

Balloons flying free

Retirement can be defined as achieving financial independence in the third stage of life - typically after age 62 when you can claim Social Security.

Theres also a rapidly growing movement around FIRE (Financial Independence Retirement Early) where people aim to achieve financial independence and gain complete control over their scarcest resource, their time, at a much younger age. There are multiple FIRE communities with tens of thousands of people online who are trying to achieve financial independence in 10-15 years vs a traditional career of 40 years; one of the most active is ChooseFI. Theres even a movie coming out about it in 2019 Playing with FIRE.

Its worth noting that early retirement is still the exception with less than 1% of the population retiring before 50.

Traditional Retirement Still Dominates

What is Financial Independence

JD Roth, one of the original personal finance bloggers, defines it this way: without the need to earn more money. You might choose to work for other reasons such as passion or purpose but you no longer need a job to fund your lifestyle.

Hes even written a handy article on the six stages of financial independence - which is a great way to break down the problem and assess your own progress.

How to Achieve Financial Independence

To answer the question of how to achieve financial independence its worth examining the approach taken by the FIRE community since they have a bigger hurdle than traditional retirees, because they cant yet use Social Security or Medicare and have to fund a longer time period.

So lets look at the method used by FIRE and then we can explore some of the additional levers that traditional retirement people can use.

FIRE Method

The FIRE method basically comes down to a few core ideas - cut your expenses, save > 50% of your income and invest efficiently. Frugality is key for FIRE and youll see why below.

The typical approach to achieving FIRE is:

Traditional Retirement Method

Even though FIRE is hard to achieve and may by very hard for people with children, special needs or who live in HCOL (high cost of living) areas, there are still lessons for folks pursuing traditional retirement.

Traditional retirement provides for some key benefits for older people since they can take advantage of mortality credits - basically the fact that they have a shorter life expectancy means higher benefits in programs and products like Social Security, Medicare, Annuities and home equity products like Reverse Mortgages.

The retirement planning method that we follow at NewRetirement is:

The good news is that the body of knowledge about how to plan and achieve a secure retirement is growing. As more people enter retirement the market is getting more efficient with lower fees and more transparency across the board. A great way to get started is to use a simple retirement calculator to see where you stand and take the first step.

Read more here:

Achieving Financial Independence at Any Age - Forbes

The Three Levels Of Financial Independence: From Budget To …

Reaching financial independence is the holy grail of personal finance. But what does financial independence really mean? In this post Id like to determine the various levels of financial independence. Thats right. Even in financial independence there is no one size fits all since everybody has a different desired standard of living.

Contrary to what you may think, financial independence is not all about having enough money to cover all your expenses and then some. Financial independence also means being able to overcome your psychological fears to truly live free.

For example, I have peers who have millions in net worth, yet still make their respective spouses work because they do not feel 100% financially secure. Common reasons include the need for health care coverage or their spouses love for their job even though theyd rather be doing something else.

Here are the three levels of financial independence Ive come up with. All three levels of financial independence should meet the following basic criteria:

1) No need to work for a living because investment income or non-work income covers all living expenses into perpetuity.


2) Net worth is equal to or greater than the number of years left in your life X living expenses e.g. $3 million with 30 years left to live is FI if your living expenses are no more than $100,000 a year.

If your household income is less than ~$40,000 a year, you are considered lower middle class. Dont be offended. Its just a definition based on millions of datapoints. The current official poverty threshold is an income of $25,000 per year fora family of four and $19,000 for a family of three.

If you are happy with living a lower middle class lifestyle, then you would need between $800,000 $1,600,000 in investable assets returning 2.5% 5% a year to replicate the $40,000 in gross annual income. Of course if youve been investing in the bull market for the past 10 years, youve likely seen a higher return than 5%. But over the long run, its best to stay conservative since downturns do happen.

Given the 10-year bond yield is at ~2.5%, everybody should make at least 2.5% a year on their investable assets risk free. If youre losing money during your financial independence years, you havent been investing properly.

This category of financial independence is interesting because theres a lot of tradeoffs the individual or couple still make, such as:

The question many people have in this stage is therefore: Are you really FI if youve got to do one or many of these things? Many who work a day job argue no, but it doesnt matter because nobody can tell you how to live your FI life. If you dont have to work a full time job and can cover your expenses, you are Budget FI as far as Im concerned.

Budget Financial Independence is where I found myself between 2012 2014. I was earning about $80,000 in passive income, which was more like $40,000 since I lived in San Francisco, and had negotiated a large enough severance to last for 5-6 years of living expenses.

Even with these numbers, I was still afraid that I had made the wrong choice leaving a job at 34. As a result, I tried to sell my house and downsize by 70%, but nobody wanted to buy my house in 2012 thank goodness.

Further, my wife and I agreed that she work for three years until she turned 34 (hooray for equality) to give us enough time to figure out whether we could both leave the workforce. At the end of 2014, she negotiated her severance as well before her 34th birthday.

Related: What Is Lean FIRE?

The median household income in the United States is roughly $60,000. $60,000 is therefore considered a comfortable middle class income for most Americans. If you didnt have to work for your $60,000 a year income, then life should be better, maybe even fantastic.

Based on a conservative 2.5% 5% annual return, a household would need investments of between $1,200,000 $2,400,000 to be considered financially independent. Once youve got at least $1,200,000 in investable assets and no longer want to work again, I dont recommend shooting for an overall return much greater than 5%. You can carve out 10% of your investable assets to go swing for the fences if you wish, but not more. There is no need since you have already won the game.

Remember, once youve reached financial independence, you no longer have to save. Everybody striving for financial independence tends to save anywhere from 20% 80% of their after tax income each year on top of maxing out their pre-tax retirement accounts. Therefore, if youre able to 100% replicate your gross annual household income through your investments, youre actually getting a raise based on the amount you were saving each year.

If you have 20 years left to live and only require $60,000 a year, having $1,200,000 can also be considered enough even if you make zero return. The only problem is that your purchasing power will decline by ~2% a year due to inflation. The other problem is that you dont know exactly how many years you have left to live. Therefore, its always better to have more rather than less.

My blogging buddy Joe from Retire by 40, who is six years older than me, is a good example of having enough money, but finding it difficult to overcome the fear of not working. Every year, he questions whether his wife can join him in retirement, even though hes been retired for over five years, has close to a $3 million net worth, and has online income and passive income to more than cover their annual living expenses. Every year I tell him she could have retired years ago, but hes adeptly convinced her to keep on working.

Related:Achieving A Two Spouse Financial Independence Lifestyle

This is a level of FI that Ive been trying to achieve since I was 30 years old. I decided back then that an individual income of ~$200,000 $250,000 and a household income of ~$300,000 was the ideal income for maximum happiness. With such income, you can live a comfortable life raising a family of up to four anywhere in the world. Given Ive spent my post college life living in Manhattan and San Francisco, it was only natural to arrive at much higher income levels than the US household median. Remember, half the country live in more expensive coastal cities.

These figures are partially due to a highly progressive tax code that was implemented in the mid 2000s that really went after income levels above these thresholds. Further, I carefully observed my happiness level from making much less to making much more. Any dollar earned above $250,000 $300,000 didnt make a lick of difference. In fact, I often noticed a decline in happiness due to the increased stress from work.

Using the same 2.5% 5% return figures, one would therefore need $5,000,000 $10,000,000 per individual and $6,000,000 $12,000,000 per couple in investable assets to reach Blockbuster Financial Independence. In addition, it is preferable if your home is also paid off.

If you are generating $250,000 $300,000 in passive income without having to work, life is good, really good. At my peak in 1H2017, I got to about ~$220,000 in annualized passive income, but then ended up slashing ~$60,000 from the top after selling my rental house to simplify life. Therefore, Ive still got a long ways to go, especially now that I have a son to raise.

The way many people reach Blockbuster Financial Independence with income of $250,000 $300,000 is through a combination of investment income and passion project cash flow. Since FI allows you to do whatever you want, heres your chance to follow the clich, follow your passions and the money will follow without worry that there will be no money. My passion so happens to be this site.

But due to fear of not being able to comfortably provide for my wife and newborn, I worked too much in 2017 on Financial Samurai to my healths detriment. Therefore, until I can reach $300,000 a year in passive income or never let Financial Samurai stress or tire me out again, I wont be reaching Blockbuster FI any time soon.


Overcoming The One More Year Syndrome To Do Something New

What Is Fat FIRE? The Best Way To Live Life In Retirement

The Pyramid Of Financial Independence

Even if you find yourself in the Budget FI category, its still better than having to work at a soulless day job with a long commute and a terrible boss. Most people who find themselves in Budget FI are either on the younger side (<40), dont have kids, or are forced to live frugally. Ive found that in many cases, folks in Budget FI long to lead a more comfortable life so they either get back to work, do some consulting, or try to build a business within three years to move up the pyramid.

The only way Ive found to successfully overcome the fear of not working is by either negotiating a severance, building enough passive income to cover all your living expenses for at least 12 consecutive months, or trying out FI living first while your partner still works. Feeling comfortably FI doesnt just happen with a snap of the fingers.

There is this natural urge to still make financial progress by continuing the good financial habits that got you there in the first place. And wonderfully, the progress you make is like finding loose diamonds after youve already found a pot of gold.

Related:Ranking The Best Passive Income Streams

Manage Your Money In One Place:Sign up forPersonal Capital, the webs #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use theirRetirement Planning calculatorthat pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how youre doing.Ive been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

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The Three Levels Of Financial Independence: From Budget To ...

The FIRE Movement | Financial Independence Retire Early

Updated: February 12 2020 | Grant Sabatier This article includes links which we may receive compensation for if you click, at no cost to you.

We live in such a remarkable time. Its never been easier in history to make enough money to live a life you love.

People even 20 years ago would be so jealous of the opportunities we have today to live the life we want. We can work anywhere. Travel the world for less. This is at the core of the FIRE (financial independence retire early) movement.

And there are so many incredible blueprints for living a non-traditional life where youre stuck in a cubicle all day doing work you hate.

Theres a growing movement of people choosing to live life on their own terms. And Im part of it. Were the FIRE movement.

It truly can change your life. FIRE definitely changed mine. But when I started my own financial independence journey in 2010, there wasnt a movement yet.

We were a relatively small group of people all over the world using money as a tool to create more freedom in our lives. We figured out that the higher your savings rate the faster you can retire early.

Between 2010 and 2015 I launched a bunch of side hustles, saved upwards of 82% of my income and invested my money so it could grow.

This helped me reach financial independence and retire at the age of 30. I wrote an entire book about my journey and a step-by-step blueprint that anyone can follow titled Financial Freedom: A Proven Path to All The Money You Will Ever Need(Penguin Random House).

FI stands for financial independence.

While there are many definitions of financial independence, a simple way to sum it up, is you have reached financial independence when you are free from the worry of money.

For some people, this happens when theyd gotten out of debt and for others its the moment when you no longer have to work for money.

RE stands for retire early.

As surprising as it may seem, there are also many definitions of early retirement.

For some, it means the moment when you check out and never work again for the rest of your life (aka old school retirement).

But for others retiring early simply means theyve gotten to the point where they no longer have to work, but they might keep working, or switch to a job that they are more passionate about.

When you put FI and RE together you get FIRE.

But FIRE is more than just about money or personal finance optimization, its more about life optimization. The central question is What makes you happy? and aligning your spending and saving, and financial life around maximizing your happiness.

With that goal in mind, the FIRE movement also integrates psychology and philosophical concepts from other movements like Stoicism and even Buddhism.

Financial Independence Retire Early (FIRE) is ultimately a personal journey.

There are also many facets of FIRE that have spring up over the years:

New pockets of the FIRE movement seem to be popping up every day.

As you can see what FIRE means is ultimately up to you. Thats the beauty of it -- you truly can create your own path.

While the origins of the movement are hotly debated and evidently the term FIRE was first coined in an old Motley Fool forum sometime in the early 90s, the FIRE movement largely began in 1992 with the publication of one of my all-time favorite books, Your Money or Your Lifeby Joe Dominguez and Vicki Robin.

In the book, they outline a simple yet transcendent idea: that whenever youre working your actually trading your life energy for money. So whenever you buy something you should think about it in terms of hours of your life since you can always go out and make more money, but you can never get back your time.

To explore the 9 Steps in Your Money or Your Life check out the Free 5 Day Your Money or Your Life Email Course.

Hanging out with Vicki Robin the Godmother of the FIRE Movement on Whidbey Island, Washington

When I read Your Money or Your Life in August 2010 it completely changed my life. Over the past few years, Ive had the opportunity to become close friends with the co-author Vicki Robin and she graciously wrote the foreword to my book.

I feel so grateful to be able to work closely with Vicki to help make financial independence available to everyone.

But back 8 years ago when I started my own financial independence and early retirement journey, there were very few people on the FIRE path. In fact, I only knew of a handful of what are now known as FIRE bloggers.

Today there are thousands of bloggers documenting their financial independence journeys, an incredibly active financial independence subreddit, hundreds of podcasts, and even a documentary about the FIRE movement that Im in called Playing with FIRE that will be released soon and includes others members of the financial independence retire early community.

Im so stoked about it. Check out a preview of the documentary below.

Also, any good movement needs a folk song and there wasnt one about the FIRE movement so I wrote one. Heres me playing my FIRE movement folk song.

For anyone interested in the FIRE Movement, heres how it works.

Its simple in theory (which is why I could sum it up in a 90-second song) but is a little more challenging in execution.

To make it as simple as possible, here are the 9 steps to reach FIRE (financial independence retire early).

The biggest problem with mainstream personal finance and money advice is its all about the money!

But whats more important than money is life. You can always go out and make more money, but you can never get back your time. So before you even start thinking about the money, first think about what kind of life you want to live. Seriously, write it down.

What does the perfect day look like? Why is it perfect? What are the 10 things that make you happiest?

When I did this exercise I quickly realized that most of the things I enjoy most in life are actually pretty inexpensive or even free. It doesnt cost any money to walk my dog in a park on a Saturday, play guitar with my friends, or board games with my wife.

Once I started thinking in terms of the life I wanted to live and what I enjoyed most, it became easier to prioritize where to spend my money and where to save.

At the end of the day money only matters if you live a life you love. Ive always believed that money is not the goal, time is. But you need to think about what kind of life you want to live -- what is important to you?

Its always easier in life to chase that next thing -- whether its the next job promotion, raise, or save 1 million dollars.

Whats harder to do is take the time to figure out what actually makes you happy and what kind of life you want to live. But once you look within instead of just outside, the easier it will be to plan for financial freedom.

The next step is to figure out how much money you need to live that life awesome life! I remember being in college and dreaming about driving a Maserati and living in a big lake house, but now when I see a Maserati driving down the road I dont see $200,000, I see $1,200,000 in 30 years!

In 2010 when I started my financial independence journey, I didnt set a goal for how long it would take. All I knew was that when I did the math I was never going to be able to retire if I was only able to save 5-10% of a $40,000 -- $50,000 income.

The math I did was pretty simple. If I was able to save $5,000 per year maximum, even with an expected compounding rate of 6%, I would have about $433,000 in 30 years. While that might seem like a lot of money today,its not going to be that much in 30 years, because of two expected variables--taxes and inflation.

You will need to pay tax on that money when you take it out, assuming a 30% tax rate that cuts the after-tax value to $308,000, which when adjusted for 2% annual conservative inflation amount (it could be higher than this even!), then the future value of that money after taxes and inflation is approximately $170,000.

While $170,000 is still a lot of money, its not going to be in 30 years. It definitely wont be enough to live on for 20+ years.

Typical wisdom is that you need 25x your annual expenses to retire early. When I did this calculation, I anticipated my annual expenses would be at least $50,000 in the future (who knows if I will actually be able to live off $50,000 in the future--I sure hope so!).

But it was the best starting point I had, so by simply multiplying 25x by $50,000, I determined that I would need to save $1,250,000. Thats a big number, but it was my target.

You can sit down with a piece of paper and see how much money you need to retire early by checking this calculator I built.

Saving is an opportunity to live a life you love. Its not a sacrifice. As long as you view it as a sacrifice youre always going be in a scarcity mindset.

The only way that youll be able to reach financial freedom and FIRE is by saving as much money as you can and investing it to grow.

Remember what I said about living differently? A 50% saving/investing rate is more common than you would think amongst the FIRE (financial independence early retirement) crowd. I know a lot of people that save this much each month because they get it.

Saving 50%+ of your income is definitely going against the status quo, but thats how you fast track wealth. If you want to go deeper, here are two posts onhow much money you should be saving and my investing strategy.

The easiest way to monitor how much money youre saving is by tracking whats known as your savings rate. Your savings rate is simply the percentage of your income(s) that you are saving.

To calculate your savings rate, you want to add up all of the dollars that you save, both in pretax accounts (for example, 401(k)s and IRAs) and after-tax accounts (brokerage) and divide it by your income.

Here is an example of how it looks if you have a $100,000 income and are saving 40 percent.

Its pretty simple. The more money you can save the faster, and bigger, it can grow. The average savings rate in the United States is currently around 3.2%, which based on simple math means that a majority of Americans will never be able to retire.

But if you can get that savings rate to 20%, 30%, or even 50% youll be able to cut years and even decades off of your retirement.

Keeping a budget is really hard and its what stops most people from really fast tracking their financial independence.

Im not going to tell you to create a budget or cut back on all of your expenses. What you need is to balance how much you spend. Ive always viewed saving as an opportunity, not a sacrifice.

But you do need to find a way to reduce how much you are spending so you can increase how much you save.

The easiest way to do it is by cutting back on your housing, transportation, and food costs. The average American spends 70% of their money on housing, transportation, and food, so if you can spend less on them (say 25% or so, then you can bank the difference). If you move to a smaller apartment, walk to work, and cook at home, you could realistically increase your savings rate to 25%+ or even higher.

By reducing what I spent on my housing, transportation, and food costs, I increased my savings rate to 40% and sometimes as high as 80% while I was fast tracking my financial independence. The only way I was able to fast track was by cutting way back on my living expenses and investing the difference.

Focus on where you spend the most money to save the most money. Cut back your housing expense as much as you can through a strategy known as house hacking where you rent or buy a 3 or 4 bedroom apartment or house and rent out the other room. Youre going to save a lot more money doing that than by cutting out things like your $5 latte.

Im not here to tell you what to buy or not to buy, but its important to recognize that whenever you buy anything youre actually trading your future freedom for it.

At the end of the day it comes down to a personal choice, but I was happy moving to a smaller apartment, moving closer to my office, and eating out less, to bank the difference. And I definitely was able to bank the difference--saving at least an additional $13,000 per year by cutting back.

While I dont have the exact figures, I estimate that cutting back for 2 years, before buying my first home, I was able to save about $25,000 that I invested in 2011 and 2012, and that cutting back is now worth more than $100,000 in my investment accounts. Im going to continue to let it grow and hopefully making that decision 2 years ago will compound in 20 years into a lot more money. It was totally worth cutting back on my three biggest expenses. Try it out.

When I was on my own financial independence journey I calculated that for every $100 I saved I was buying a week of freedom in the future.

Not all debt is created equal. There is good debt vs bad debt. Some debt you lose money on and some debt you can make money with.

Good debt is debt like mortgage debt you use for investing in real estate or building a real estate empire or in some cases student loan debt if it helps you get a better job or make more money over your career.

Bad debt is credit card debt since the interest rate on it is probably over 20%. Pay down any credit card debt you have immediately since you are losing money with it.

While there are a bunch of different debt payoff strategies, the best strategy is simply to pay down your debt with the highest interest rate first, which in most cases is going to be credit card debt, then any personal loans, followed by student loans, and then mortgages.

The simple rationale is that compounding works both ways, meaning that just like your investments can grow and compound over time, so can your debt.

So whenever youre paying off a debt you want to pay down your highest interest rate debt because its like getting that percentage return on your money.

If you pay off your 20% interest rate credit card its like you made 20% because your debt is no longer growing, as opposed to paying down your student loan balance with a 5% interest rate where youd only be getting 5% on your money.

Since your full-time job is where youre likely currently making the most money, its important to try and get paid as much as possible.

The simple fact is that most people deserve a raise, but theyre too afraid to ask for one. The impact of a single raise of a few thousands of dollars can actually add up to tons of additional money over time.

Just getting 1 percent bigger raises each year can make you literally hundreds of thousands of dollars richer over the next twenty to thirty years by investing and compounding that small raise difference.

A simple study that looked at an annual 3 percent versus a 4 percent raise each year showed that after thirty years the 4 percent raise was worth $578,549 more when that small 1 percent difference was invested in the stock market.

This is because your future earning potential is impacted by your base salary today. Most people are underpaid in their roles, but many dont do anything about it.

Eighty-nine percent of Americans believe they deserve a raise, but only 54 percent plan to ask for one in the next year.

We typically spend more time planning for a vacation than working to improve and optimize our careers, which is a missed opportunity.

In reality, most of the jobs that will exist in 20 years havent even been created yet, so while traditional advice is that you should become an expert in one thing, its actually more valuable to have a broad range of complementary skill sets.

For example, if you know how to use Google Analytics, you should also learn about branding and how to start a blog.

A side hustle is anything you do to make money outside of your full-time job.

While you can make money doing literally anything, the best side hustles are the ones where you can make money doing something you actually enjoy and where you can control what youre getting paid and when you work.

Far too many people drive for Lyft or Uber and are limited by the hours in a day they have to drive and what they get paid because the rates are set by the company, not the drivers.

While there is an infinite number of side hustles that you can launch, I like the side hustles that you can do online because they give you the ultimate flexibility to make money from anywhere in the world and on your own time.

Some of the best current side hustles are learning how to become a virtual assistant, start a blog using Bluehost (check out how to make money blogging), and running Facebook ads.

Its essential to switch from a saving to an investing mindset. Its not possible to fast track financial independence by keeping your money in a savings account--investing is an essential ingredient.

I have made more money through investing than anything else and most of it in my sleep! Just recently, I was looking at my investing returns over a 90 day period and realized that I had made over $15,000 in gains from one of my investments, which is more money than I made in 6 months working at my first job after college. If you really want to make money, then you need to be investing as much money as you can.

Investing your money is what really accelerates your ability to reach financial freedom faster because your money starts making money and then the growth accelerates.

While you can invest in literally anything, the most dependable investments are stocks, bonds, and real estate. You need a short term investing strategy (money youre going to need in the next 5 years) and long term investing strategy (for the money youre going to need in 10+ years).

Note: Its always worth keeping at least 6 months of expenses saved in high-interest online savings account for any unexpected emergencies in whats known as an emergency fund.

Your short term investments should be kept in a high interest online savings account and your long term investments for retirement should be largely kept in low cost highly diversified index funds like the Vanguard Total Stock Market Index Fund (VTSAX) or something similar that holds most of the stocks in the U.S. stock market.

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The FIRE Movement | Financial Independence Retire Early

Shortest Path to Financial Independence – Mad Fientist

What would you give up if someone said to you, If you give up five things, you can quit your job tomorrow and wont ever have to work again?

What else would you give up if you instead had to give up ten things? Fifteen things?

At some point it may not be worth it and youd rather keep your job but I imagine the list of things youd be happy to give up could be pretty long.

I actually thought about this a lot recently when creating the budget for The Perfect Life.

After determining what kind of life would make me and my wife happiest, I sat down to figure out exactly how much the perfect life would cost.

Before I describe the shortest path to financial independence, its probably a good idea to reiterate my definition of financial independence.

To me, financial independence is having enough income from your assets to cover your essential expenses so that you can survive without ever having to work again.

Never having to work again is very different from never working again.

Since I plan on working in some capacity after I achieve FI (on things I want to work on, rather than what my boss wants me to work on), Im not concerned with saving up enough money to cover my discretionary expenses.

Id rather reach FI as quickly as possible, quit my full-time job, and then slowly build up the amount of fun money I have by doing work that I enjoy.

As Mr. Money Mustache described in his First Retire, Then Get Rich article, its likely you will make more money and spend less post-FI than you anticipate. Therefore, Im happy with this plan and am in no way worried about living a boring life after financial independence.

So how can you achieve financial independence as quickly as possible?

The first thing you should do is list your current essential expenses. This will allow you to understand how much you spend per month and will help you better predict how much you will need to spend after you quit your job.

The number you computed in the previous step assumes your post-FI life will resemble your current life.

Most likely, this will not be the case. When you no longer have to work, the number of expenses that you incur should decrease.

This step is the fun part.

If you really envisage your post-FI life, you can quite happily drop expenses that are no longer necessary or important to you.

We currently own a house but plan on renting after reaching FI. There are a few reasons for this:

The decision to rent smaller apartments/houses in cheaper places will allow me to decrease my future monthly expenses significantly!

Sadly, we currently require two cars for me and my wife to both get to work. The costs associated with these cars is ridiculous and if I never have to own a car again, I wont. Post-FI, we wont need to own a car.

Not having a car will probably result in additional public transportation costs but by cutting out automobile ownership from our future expenses, I can decrease our future monthly expenses even further!

Im sure there are many expenses in your life that youd be happy to substitute for free alternatives post-FI if you take some time to think about it.

Theres a big, exciting world out there with many amazing, free things to do so why not start with those and then move on to things that cost money after you get bored of all the free options?

Library books instead of TV. Running instead of gym membership. Rock climbing on actual rocks instead of on a fake climbing wall that costs money to use.

You get the idea.

This exercise may help you decrease your current expenses even before you achieve financial independence.

If you ask yourself, would I give up x if it meant I could quit my job tomorrow and you answer yes, why would you continue paying that expense now? It is obviously not that important to you so why not remove that expense now and instead use that money to get one step closer to achieving FI?

The beauty of saving enough to only cover your essential expenses is that it will force you to really scrutinize your discretionary spending after you achieve FI.

If you have to go out and make extra money to buy something, youll most likely only buy things you really need or desire. You will truly be trading your free time for stuff so you will most likely only do that for things that are really important to you.

Theres no need to wait until FI to see if you can limit your discretionary spending to what your supplemental income can provide.

If you start developing supplemental income streams by doing things you enjoy now, youll be able to increase your savings rate while cutting out the discretionary expenses that really arent meaningful to you.

In conclusion, here are the simple steps to achieve financial independence as quickly as possible:

What would you consider giving up if it meant you could quit your job tomorrow?

Want to shorten your journey to financial independence even more? Check out this comprehensive guide How to Optimize Your Journey to Financial Independence

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Shortest Path to Financial Independence - Mad Fientist