My 12 Month Plan For Financial Freedom - Escaping From The Shackles of Wages
I don't know if I'm being ungrateful by making statements such as "escaping the shackles of the wages", some people might find this quite offensive! I mean there are people out there unemployed people who would give their right arm to be in my position and to hear someone whine and complain on a blog might be quite counter productive (Bear with me). The reason I started this blog was to find a way to become independent from the wage! while many people enjoy going to work and contributing to the company and I respect them very much I just don't see myself like that. I value independence and being able to provide for myself is a better position for me rather than working for someone else..to me it just makes sense. I know there's now a growing breed of individuals who feel like this too and it's just a matter of time until they realise this.
Ok so now that I've put things in perspective and really know what I want I now need to devise a plan to become financially independent. Just dreaming about being free won't make you independent, you have to plan and work relentlessly to get there. There may be a lot of tears on the way and there might be times when you just want to throw the towel in and hang up your gloves but for those who go on will go on to living their dream.
Ok so now that I've put things in perspective and really know what I want I now need to devise a plan to become financially independent. Just dreaming about being free won't make you independent, you have to plan and work relentlessly to get there. There may be a lot of tears on the way and there might be times when you just want to throw the towel in and hang up your gloves but for those who go on will go on to living their dream.
My Spin on Financial Independence - Be Flexible About The Way You Think About Monetary Independence
I'm sure there's a wiki definition of financial independence and I would probably use it if I had an assignment due! For me my understanding of financial independence has a spin to it. Some of the questions that I asked myself when I thought about this was How much do I really need to go on? What can I do now so that I can earn forever or the foreseeable future? How reliable is this source of income?
It all really boils down to how much you need on a monthly basis to get through life. If you need £1000 per month then you will have to put in more hard work compared to someone who needs £500 per month. Therefore my bespoke specific definition of being independent from the wage is "Being able to earn money without doing work so that I can maintain my current standard of living and quality of life". This definition might be different to the real definition but who cares? that's my goal and I wan't to achieve it as quickly as possible!
How Much Do I Need & How Do I Work This Out?
Being a mathematician I love working with numbers, numbers really help to quantify a goal and find out exactly what I'm working towards. Unfortunately I've not used the skills that I've been blessed with to good use! I have a mountain of debt and a oversized humongous mortgage to pay off and I did all of this without really looking at numbers which has ultimately been my downfall. I did something liberating the other day, I sat down quietly and looked at how much income I have coming in and how much I have going out, I had been putting this off for a while but I think it's time to come to terms and find a way out. Here are the numbers:
Income: £1595.00
Expenses: £1200.00
Debt: £45,000.00
Mortgage: £132,000
Savings: £8000.00
So there you have it my dismal state of affairs! It's all out in the open and I have nowhere to hide. Thankfully my outgoings are less than my income which has helped me to save money and have an emergency fund if things go wrong. So what can we deduce from these raw discrete figures, well for me to go on living the life I live I need £1200! but before I commit to this figure I need to see whether I am spending any excess or wasting any money. I made some time to go through my outgoings item by item with my partner to see whether we really needed to spend so much and the results were an eye opener. Some of the items were needless expensive phone contracts, needless insurance payments for a junk of a car and excessive spending on take-out and days out that really were not that fun. We calculated that we overspend by about £300.
We have now made a commitment to make the changes so that we can shave our outgoings down to £900, with a further intention of going down to £800! Will this affect our quality of life? it might but we would rather be financially independent than justify our life with meaningless overspending on silly things like 3 phone contracts!
Ok so there you have it! once I have approximately £800 coming in from passive income streams I can say that I am financially independent! does that mean I will quit my job? well not just yet, but having the choice does give me a great feeling. Once I have a reliable source of passive income that is permanent and growing I will be in a position to retire.
For me it's all about having the freedom to choose independence and doing whatever is necessary to get there. Read my next post which will outline in detail my twelve month plan to financial freedom, it might take longer, it might come sooner but rest assured this will not be a get rich quick scheme where you can quit your job overnight and fly to the Bahamas forever.
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