The following post is a guest contribution from Early Financial Freedom.
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.
Before you can decide how to invest your money or how much to stash away, it’s important to ask yourself the fundamental question:
• Why care about money?
The answer is harder than you think.
What would be the point of a blog if we didn’t explore an idea that may be slightly controversial?
Anyone who reads this blog knows that my quest for financial freedom heavily relies upon disciplined saving and planning for retirement. Like many people, I am using my employer-sponsored retirement plans, IRA’s, and personal savings to build up a fortune that I can one day live off of.
All of that is fine and good in theory, but what if everything I just said was ALL WRONG! What if all the money I’m saving will one day be worthless? It sounds crazy, that’s exactly what one famous author is promoting in one of his new books.
We all know that we should be saving more money for retirement, but how do you make that happen? How do you go from nothing to maxing out all our tax-advantaged savings options like your employer sponsored retirement plan or individual retirement account (IRA)?
As I’ve mentioned in previous posts, my wife and I have been on this path for sometime. I’m proud to say that we currently have reached the maximum amount allowed for my 401k and for our Roth IRA’s. It wasn’t easy, but looking back I’m sure glad we did it!
So what steps did we take along the way to get to this point? Here is the strategy we used:
/ Tags: 401K
, employer retirement plan
, Individual Retirement Account
, mutual funds
, Roth IRA
, tax advantaged savings account
, tax deferment
, Traditional IRA
Once you have your reasons for saving money and your motivation to one day retire, there’s only one thing left to do:
• Start saving today!
One simple reason: The effects of compound interest. Simply put, when you save your money, the effects of compound interest cause your money to grow far beyond anything you could have ever saved on your own. See for yourself:
Let me be the first to say “Congratulations”! Despite the intimidating packet of papers you need to review and fill out as well as the dozen 401k questions you probably have, this is a great opportunity for you!
Not only will you be starting down the road to financial freedom (in other words: retirement), but you’ll also be given the opportunity to make FREE MONEY! Yes, I said free money! Why is it free?
1) The money you put away comes out of your paycheck BEFORE taxes and it grows tax free until you retire!
2) Your company will likely (as a lot of companies often do) kick in a little bit extra cash in addition to the money you plan to put away. Who wouldn’t take a little extra money for free!
Without further ado, let’s see if we can tackle some of your 401k questions with a few of the topics below:
/ Tags: 401K
, 401k questions
, asset allocation
, free money
, Stocks & Investing