Thursday, July 10, 2014

Celebrate Independence Day With Independence

What a great country we live in!
Being born in the United States of America any time in the last 50 years or so puts you in a wonderful position – one where you have definitely won the ovarian lottery.
I’ve discussed before why simply being born in a first world country in modern times already puts you in a better position than pretty much any historical figure you can think of that was alive before 1900. Access to modern-day amenities like electricity, running hot water, the internet, indoor plumbing, and refrigeration puts you in a pretty nice spot. Add in transportation that isn’t powered by a horse, restaurants and grocery stores that can serve you food from all over the world, modern heating and cooling systems, and entertainment options that stretch the imagination, and you’re living far better than Alexander the Great or George Washington could have ever dreamed.
But why not take it a step further? 
Those things are all very wonderful, but what about independence? Independence from wage slavery, stress, money concerns, and not having enough time?
Why not create your own Independence Day? A day when you claim freedom, whatever that may mean to you.
It sounds impossible, but it’s not. It simply takes planning, consistency, and hard work.
I haven’t made much money throughout my life. You can go back and view any of my monthly budgetsstretching over more than three years and see that. But the great thing is that it doesn’t take much money to be happy, and it certainly doesn’t take much to be free.
This past month I earned almost $700 in dividend income. And that passive income covered almost halfthe ~$1,500 in personal expenses I had.
Now, not every month is this cheap nor so successful with dividend income. But if after just over four years I’ve reached the point where I can cover half my expenses here and there I’d consider that a resounding success!
In fact, when you get to the point where you’re living far below your means by embracing frugality and you’ve built up a sizable passive income source you’re more free than you might believe – even if you’re not completely financially independent.
I recently decided to quit a stressful full-time job in the automotive field to pursue writing. This was a decision that I took very seriously, and while it likely cut my income dramatically for the time being, my quality of life quotient skyrocketed because I became much freer than ever before. That’s a trade-off I’d be willing to take any day of the week. Time isn’t just money; time is life.
However, even if I didn’t have the blog I really was already pretty free. I’ve pointed out that dividends could indeed be used for expenses (rather than reinvestment) far before the point of full financial independence (when all passive income exceeds all expenses). So if I were to stop investing right now and use that $700 for expenses I could have covered my rent, health insurance, mobile phone bill, all the food I ate, and the fuel I put in my car over the last month.
At that point I just have to go out and earn another $800 or so from other sources. And $800 doesn’t necessarily require climbing the corporate ladder or running on the rat wheel indefinitely. Certainly an enterprising individual could likely earn a couple hundred dollars or so from a hobby-turned-business and before you know it a local, enjoyable part-time gig is all you really need to get by. The days of working for one company for 30-40 years before collecting your pension and gold watch are long gone, and potentially with it went the days where you collect all of your income from one source. We like to diversify investments; why not diversify income sources?
I’m still aiming for full financial independence by 40 years old. I desperately want to get to the point where my passive income exceeds my expenses and my destiny is truly within my complete control. I’ll own my own time, which means nobody else (namely, an employer) owns me. But it’s important to also realize that you don’t need to complete the journey to reap the benefits. The benefits are compounding for you every single day that you’re chiseling away at the chains that beholden you to whatever desk or cubicle you spend most of your time at. Freedom awaits you.
So your own Independence Day might be closer than you think. The difficulty of the grind, your level of tolerance, your savings rate, and how much passive income you’ve already built all factor into that, but freedom isn’t necessarily all or nothing. I’m still chasing 100% freedom, but I’ll take 50% or so in the meanwhile. I’ve found financial independence to be both a journey and a destination, rather than a destination alone. Much like life is a journey and we’re learning and growing as people every single day, more and more freedom is being added to your glorious, growing pile of it every single day you’re chasing financial independence.
So you can actually create your own Independence Day. And it might just be sooner than you expected. Just don’t expect the government to reward you with an official day on the calender and a paid day off. Of course, you won’t need that because the rest of your life will be paved with paid days off.
What about you? Creating your own Independence Day? 

This article was written by Dividend Mantra. If you enjoyed this article, please subscribe to my feed [RSS]

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