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What I Gave Up for Financial Independence

What I Gave Up for Financial Independence

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Financial independence was a goal I achieved about twenty-nine (29) years ago. It was part of a ten (10) year plan, I accomplished in about eight (8) years. It was a goal with a plan! It required a level of commitment, discipline and determination day in and day out. Although I used savings and investing to achieve this goal, it was my choices that helped me achieve my success. 

Although financial independence means different things to people, I want to establish a definition for this article. Financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. In other words, their assets generate income that is greater than their expenses. It helps that I do not live an opulent lifestyle. I do not live in a mansion, drive luxury cars or spend a great deal of money, but I enjoy my life and do not feel deprived.

For most of my life, I have been able to do all the things I wanted to do. I have been a lifelong saver and value shopper. I was fortunate to graduate college/graduate school without student debt. I had substantial savings for a down payment on my first home. I bought my first home twenty-five (25%) percent below market value. I searched for a fixer upper and was able to assume the below market mortgage. My mortgage payment was less than my rent at the time. It doubled in value in three and half years.

Savings was always a priority! I lived on less, but never felt deprived. We moved from a two bedroom apartment with quality furniture to fill the public areas of the three bedroom m home. My wife and I did the remodeling ourselves which was mostly painting, pulling up carpeting and some plumbing work. The hardwood floors were in good condition and we replaced the drapes. The landscaping needed some work and so did the fencing. It was a lot of sweat equity and materials. Time has value, but it was worth it.

It was during this time, I found ways to save money on my expenses. Small changes added up to hundreds of dollars per month in savings. It was more than forty (40) years ago when I earned less and my expenses were lower. No excuses though! I am a value shopper. I look for opportunities to buy at lower prices or I don’t spend my money. I always had a budget and stuck to it. It helped that I was paid reasonable well and excellent benefits working for a Fortune 100 company.

When I bought my house, I immediately set up a payroll deduction for annual expenses such as property taxes, property insurance and savings. I never went into debt for major or minor purchases. Instead of living a more opulent lifestyle, we had parties with friends and everyone shared in the food and drink. We slowly bought outdoor furniture on sale and furnished the additional bedroom when our first child was born. When we moved to our dream house on a country club, we had the savings to fix it up.

This house was our last! It was time to grow our savings to achieve financial independence. I stated to invest in income (rental) property. My first investment in a nine (9) unit had positive cash flow almost immediately. I increased the rental income and traded it for a twenty-four (24) unit. My savings were working harder for me. I plowed the increased income into my investments and began to build wealth. I did not increase my lifestyle, but made different career choices. I left the Fortune 100 company!

I increased my income and took more risk in my career. I was secure in my investments which gave me some freedom to take more risk in my career. I took the skills I learned and increased my income. Smaller companies provide much more responsibility and authority. What did I give up? The security of a Fortune 100 company and Cadillac benefits. I grew as a professional and learned a lot more how to run a company. I went from a senior staff position to senior management.

My ten (10) year plan was to achieve financial independence; however it covered more than building wealth. I saw it as an opportunity to do the things I wanted to do versus the things I had to do. Financial independence provided the opportunity to start businesses and find new opportunities. After seven years, I cashed out and invested in the stock market. It certainly is not as secure as income property, but less management intense. Your time has value although it is difficult to quantify it.

Final thoughts

What did I give up for financial independence? Nothing! “The law of work seems unfair, but nothing can change it; the more enjoyment you get out of your work, the more money you will make.” (Mark Twain) This is not some secret, but very few people feel this way about what they do for work. I have to include my quest for financial independence as part of that work. It was not easy, but I enjoyed investing in income property. It is a great way to achieve financial independence!

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Comments

  1. The common themes among your posts on this topic are 1) success and 2) time. You’ve always pointed out that the success you’ve achieved was done over time, and I think that’s a great message to continue to share. Many people try with the best of intentions to achieve similar success, but give up after a short period of time. You have to set long term goals but with short term milestones along the way so that you can feel accomplishments and measure progress.

    • Thanks, you’re right. Long term goals require a consistent effort over time. It may be saving for retirement, operating a business or staying fit. Accumulating enough money for retirement is a huge number, but if you break it down to a monthly contribution it is very achievable. Sports is a great example of monitoring progress. Everyone wants to know the score or some other significant statistic. It is one of the reasons I treat a lot of what I do as a game.

  2. Inspiring story for anyone looking to achieve financial independence. It should be noted that finding ways to make more money along with saving more was instrumental in the accomplishment of your goal!

    A hybrid approach to building wealth is the most powerful. If you only make enough to save a little, it takes a lot longer to grow our net worth. Finding multiple streams of income is the best way to change that.

    • Investing in income property was my key to success. Although the cash flow was good, I reinvested it to accelerate the growth. Building wealth takes time and a great deal of effort.

  3. What a ride! I like the point about not feeling deprived, otherwise, it would have been really hard to achieve what you did. Defining the minimum wellness line and living just slightly above is key.

    • Thanks, it helped that my parents taught me well that less is more. It also helps that my wife agrees with my strategy. I never feel deprived because I find ways to have what I want at a (40-50%) discount.

  4. I think that if one focuses on being goal oriented, while at the same time being mindful of what’s truly going on around him/her, truly impressive things can be accomplished without significant tradeoffs. It looks like you were able to take that approach in your own way to achieve a goal (financial independence) without giving up anything critical in the big picture. Great example of how success can be a mindset.

    • I try to focus on the outcome or goal. I have have a great time doing simple things. For example, my wife and I go out for dinner twice a week, but the monthly cost is roughly $250. The goal is to go out (or take out) not spend a lot.

  5. Wow! Impressive. You were ahead of your time sounds like. You are right about having a good financial foundation means you can take bigger risks with higher reward. Thanks for the inspiration, I hope to be there some day….

    • I learned a lot from my parents! I started working for them at a very (5 years old) age. My mother used to take to various business meetings. I think I absorbed everything although I only half heartily enjoyed it. My wife and I took our children to our respective businesses when they were young too.

  6. You’ve had quite a successful career and have made a lot of smart money decisions. Having a job you like that helps you build wealth is a big plus too. I’m currently trying to find a better job that will help me get a more balanced life.

    • “Better” is very subjective. Find a job, you enjoy and you will do well. I still try to balance all the things I do in my life. It a little like juggling.

  7. We have been sitting down and looking at long term what we want and how to get there. So many times we get wrapped up in the short term, that all of our goals need more time, no matter how much we cut out.

    • Good, take those long term goals and beak them down to shorter range tasks. For example, if were trying to accumulate a couple million dollars, it would be overwhelming. If you break it down to $1,000 a month contribution, it is much more achievable.

  8. Very inspiring to hear from someone that already completed the financial independence journey. We’re working on becoming financial independent as well and we definitely have some work to do still.

    Good to hear that you didn’t give up anything for financial independence.