The Isolation Of Financial Independence

The Dr. Seuss classic, Oh the Places You’ll Go is one of my favorite books to read my young child. It’s an amazing synopsis of what a kid can emotionally expect to experience in the future. In just a few pages it captures the ambition, thrill, excitement, boredom, trepidation and isolation of life.  

So many of the lines are pertinent, even for adults. It’s this one, discussing loneliness, that always stands out to me:

“All Alone!

Whether you like it or not,

Alone will be something

You’ll be quite a lot.”

It’s true. As we become young adults, and move into our careers, it’s this isolation that we try to avoid at all costs. It can often lead us to spend more than we want. It’s often why we go out to the clubs, restaurants or extravagant outings. It’s often why we purchase the nicer car, the bigger home, the better jewelry. 

We want to show people we have value so they will want to remain near us. We want to outrun – or outspend – this loneliness.

As you take your initial steps towards financial independence

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The Optimal Financial Performance

The textbook says to stock 15% away each paycheck into a tax-advantaged account, and over 40 years you will have enough saved for retirement.

People save far more than 15%, though, trying to reach retirement in a decade or less.

What’s the optimal choice for you?

The textbook says buy a house that’s under 30% of your income.

Others buy houses that are 20% or less than their income.

What’s the optimal choice for you?

The textbook says that people, on average, spend $3,000…

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The Latte

Cutting out the latte has become a budgeting flashpoint.

Some claim you must “CUT” the expense out of your budget. Think how much the $4 could climb when invested over thirty years, they cry.

Others say, “KEEP” your latte. It’s not a large enough expenditure to make a significant difference to your savings rate, they soothe.

Neither side is correct. Neither side is wrong.

It’s up to you…

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Your Financial Teacher

When people reach a certain age where their finances become a concern, they begin to question why they never learned this in school?

Why the calculus? Why the stats? Why the trig? Why not financial education?

It’s a fair question; an important one.

Instead, we’re forced to seek out teachers on our own.

For some, they find a teacher…

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Take Ownership

When we don’t understand something we’ve learned to outsource the problem.

We don’t understand website design then we pay someone. We don’t understand a home repair then we hire a contractor. We fear tax time then we tap an accountant.

Outsourcing basic finances, though, helps those in the financial services industry make such large incomes.

They sell you with no fees, hiding the fact they’ll sparse out your future into bad products that pay them a commission.

They sell you insurance…

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Test Your Savings Rate

Entrepreneurs test like crazy. They test the different prices for products they sell. They test different marketing tactics. They test different technologies. They probably test different clothes they wear. They -- seemingly -- test everything.

Why don’t we do the same when saving?

Think you can only save 5% this month? Why not try 10%? What’s the worse that could happen? If you can’t make it without putting your family at harm, then simply tap the funds you planned on not spending.

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