I’m a ten-year veteran in the field of Analytics/Data Science that has seen tremendous growth and a massive shortage of talent. As a result, my income has exploded 7X since my very first job right out of college. With age, however, it has become increasingly clear that my priority in life is not spending my time at work everyday so I can afford better things. There are many reasons why gaining financial freedom as soon as possible is both a defensive and offensive mechanism against ever-shifting external environment, but few have gotten there. The journey to financial freedom involves a future of unknown which many have not overcome.
The hurdles are plenty, some common ones I’ve heard include
- This way of life is what we’ve been taught since the very beginning – Success means getting good grades in school, going to a good college, getting a good job, and retire after 40 years of working, no? When this paradigm is challenged it’s often met with mockery and incredulous responses. You can’t blame them, this is the safest path to a quality life, just not necessarily a happy one.
- Running out of money is scary – If we don’t work, where is money going to come from? How can we afford the basics of living? How do we buy a bigger house and a better car? Where do we find the money to pay for better school for our kids so they can join the rat race?
- Retiring early from a “job” means you’re lazy – Why are you wasting your life if you don’t go to work from 9-5? Everyone else does it.
- Retiring early would lose one’s purpose – especially those who associate their personal success to the job they do.
Truth is, many fears are solvable and concerns can be addressed proactively. Precisely because only few have achieved financial independence, no one can show us the way to an alternative solution. In my case, the primary fear is not having the financial security to meet future life obligation when I do not hold a job (especially in the Bay Area).
Lately, however, I’ve come to terms with my fear of not having enough money if I don’t work a desk job. Having listened through podcasts from Biggerpockets and read blogs of those who’ve been there (e.g. Financial Samurai), I’m more convinced than ever that it’s possible. The key lies in using passive income – generating regular streams of cash flow where they require minimal effort to maintain – to replace money needed to live a quality life. In the next 2.5 years, I’m setting achievable goals to build passive income one step at a time. To start, I’m targeting $400 a month (excluding rental income as most of them go to mortgages). This means my utility bills are covered, which has been a source of drag (I will elaborate on this in a future post). I’ll look to increase this goal by $100 at a time once this is achieved.
Overwhelming it may seem given the timeline, the good news is if I don’t make it by then, I will be much further along on a path to financial freedom. Inertia is often the biggest bottleneck, and getting over the hump of taking an action is already a great accomplishment.