Giving the state of the economy, can you really achieve early financial independence? Is it a mirage that you can only imagine? My wife and I would like to assure you that it is real and attainable if you are serious about it. The bottom line is that you need to desire financial freedom in order to achieve it. The desire is the driving force for making early scarifies for later pleasures.
How We Got There:
Let me introduce myself. I am an engineer from New York and am happily married with a wonderful 7-year-old son. After working 10+ years as a hands-on engineer and later as a supervisor, I resigned in April 2012 to stop working for others and join forces with my wife (who is also an engineer). Together, we run our IT/Web consulting company full-time where I have been working part-time since 2003. Our business is home-based and it does not require us being psychically in New York or anywhere in particular as long as there is an Internet connection.
We do not have any debt! We paid off our home within 5+ years of purchase, our vacation apartment within 3 years of purchase, our two cars within 2 years of purchase. We always pay our credit cards in full every month, and have never ever carried any credit card balance.
We definitely feel like we are already retired. No debt, we work from home or wherever, plan international travels, etc. Our blog was started to reflect our debt free, retired at 30’s lifestyle.
Some Financial Rules that Our Family Practices:
• First and foremost, have your family in order. A stable family where husband and wife have similar or same set of goals is the bedrock of financial and emotional stability. Please don’t forget that most of family arguments are money based! We’ve always considered our finances as “The Family Finances”; never his or her finances.
• Be happy with what you have, not with what you could or should have! Therefore, do not compete with Joneses! One of the best ways of doing this is to live in a neighborhood that does not force you to compete with others in the first place. For example, drive a modest car and live in a place where everyone drives modest cars. Don’t get me wrong competition can be a good thing, but in the case of “Keeping up with the Joneses” it can lead many to an unhappy bankrupt life.
• Never ever carry any credit card debt. That does not mean don’t use credit cards. Do use cash reward credit cards all the time so you can track your expenses AND earn money, but don’t go above what you know you can’t afford.
• Try to make as much money as you can. One of the best ways of doing this is to work for you; own a business. Keep in mind that owning a business could be as simple as having a website or selling something that is in demand and you know how to make or provide! Also, save as much as you can. Choice of saving may vary, but do save!
• Always live below your means, regardless of your income. Know, plan, and track your cash flow for short-term and mid-to-long term
• OVER estimate your future/potential expenses and UNDER estimate your future/potential income.
The road is early financial independence has many challenges, but it is not impossible to take. If you’re willing to make sacrifices and your desire is strong enough, then there’s hope for you to succeed!
Readers: What steps will you take to achieve early financial independence? How far are you willing to go to achieve your goals?
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Photo Credit: FreeDigitalPhotos.net
It is a great story of success. Very inspirational.
You nailed all the important steps, there is nothing to add, really. Having a plan and common goal, live below your means…
That is it. Where are you going next?
Thanks, Financial Independence. We are itching for some international living 🙂
Looks like you’ve done a great job! Just for clarification though…do you need your current income to get by or are you able to live off of the assets you’ve built? I guess I wouldn’t really consider it “retired” if you HAVE to work to cover the bills.
From the way it sounds you’re a good example of why you should attempt to own your own business: you can make a lot of money and have a lenient schedule as long as the money has come in to cover the bills. I know I enjoy working from home and being 100% commission.
We are aiming for Location Independent Lifestyle,so we just don’t want to stop working but we would perhaps reduce the work load a bit.
To your question; our current main source of income is still our business and we put good amount of time into it. But, we also have established other online sources of incomes, and with some adjustments, we COULD live off of it, if we wanted to. That being said, we are just in our mid-30s so not working would be boring. (After joining full time to our own company, I had some additional free time so I started my blog.)
If I may ask, what kind of online income sources?
Our company also produces online video content, mostly children arts & crafts videos. We have syndication, distribution deals, etc.
Jason – You are a brave soul working on 100% commission. 🙂 I’m sure you make it work, but I enjoy a little stability for a constant paycheck.
hmmm, I feel like this advice is slightly oversimplified. I think most people know this stuff…it’s making it happen that is the tricky part. I would LOVE to make more money! I would LOVE to not have any debt! But every case is unique and it’s not a one size fits all scenario.
I believe there is no secret formula to financial independence but only ONE which is C=B-A where C= cash flow, B= inflow and A= outflow. As long as C is positive, you are good. The higher the C value is the better.
Yes, most people already knows this stuff. The question is that how many people are applying it into their life?
Budget and the Beach – You’re right that every situation is unique. I’m still trying to figure out the “making it happen” part myself. While EFF was successful at this by going to work for himself, I’d like to find an alternative where I don’t quit my day-job. I have a few ideas and plan to post on them as I test them out.
Great post. I think you are in a great position as being your own boss is better than most. Will you sell one of the properties if you do the international living route? Cause I am seeing more outflow in rental expenses.
Currently, our investment property (a condo) is rented with positive cash flow. We live in our main house and it is also HQ of our business. We thought about selling one and would finalize our decision as we get closer.
I agree with some of the other commenters that it’s amazing what you’ve been able to do…but I might not call it retirement. Financial freedom? Sure sounds like it.
Yes, it is financial freedom therefore the name of our blog; early financial freedom.
LOL – In many ways, I’ve begun to think of financial freedom as being more important than retirement.
I’ll take financial freedom to broke retirement any day 🙂
I’d love to see a followup post on how the technically parts of how you’ve done this. Or maybe you’ve already done that on your site. Can your son code yet?
There is no secret formula but C=B-A where C= cash flow, B= inflow and A= outflow. We are at the top 5% of income, and have saved min. 30% to 50% of our BEFORE tax income every year, period.
My son had his first computer, a mac, when he was about 2. He is now on his 4th one, a laptop. He does not code, he is a good tester though :). On the business side of things,he has already come up with a business idea that generates a few thousands a year, of course with his mom’s help. Not to mention that his earnings goes to his 529 plan.
That’s pretty cool to have your son involved! It really sounds like the whole family is firing on all cylinders!
Never carrying credit card debt and being happy with what you have are huge keys to financial freedom. If you’re always trying to keep up you’ll never be able to save enough.
Yes, they are. I personally don’t see the benefit of contributing into a retirement account while carrying CC debt with 10% – 15%+ interest rate. No matter how rich you are, there is ALWAYS someone who is richer than you are, so being happy with what you have is way to go!
Wow, what a great story and testimony EFF! You and your family have accomplished some amazing things and it seems you have a solid head on your shoulders. You share some really important tips here too, some I need to focus on more in my own life. I love the travel photos you post on your blog, awesome stuff!
Thank you, and enjoy the photos 🙂