Well I've stated or at the very least intimated several times already in my (thus far), few short posts, that one of my over-riding goals is to become financially independent.
Well there is a problem for you there already dear reader, because how can you possibly relate to such an erroneous statement, you see from the second that I selected that particular phrase, our paths with regard to the rest of this conversation may have started to meander gently off in different directions.
OR THEY COULD HAVE VIOLENTLY SWERVED OFF IN SUCH OPPOSING DIRECTIONS THAT A DIAGRAM ON PAPER WOULD LOOK LIKE 2 JUVENILE DELINQUENTS BOTH DOING HANDBRAKE TURNS IN A McDONALDS CAR PARK, ONE HEADING NORTH AND ONE SOUTH!
You see the reason for this is that phrases like "financially independent", mean such radically different things to different people!
You may want a castle made from solid gold with diamond encrusted ramparts 200 trained meerkat butlers and a liquid cash accumulation of £1.68 trillion pounds, just in case the one castle becomes a little cramped one day, or the meerkats run away to pursue careers in acting and go on to have incredibly successful careers selling car insurance, (If you are from outside of the UK, this may not make a lot of sense but google comparethemeerkat.com TV advertisements, and it will probably make more sense than the rest of my blog)
Conversely, you may want a couple of thousand pounds in a building society account for emergencies and a comfortable "paid for" bungalow with a spare room to display your collection of wonder woman action figures.
Neither of these scenarios is the right or indeed the wrong one. There is no amount of money that is grand enough or not grand enough, this information is not to be voted upon or judged by the masses...Its your own guide stick for how good or bad you are doing on your own pre determined road to financial freedom or independence. I guess what I am trying to convey here, (with far more words than are necessary as per usual), is that this is a very personal thing to assess and only you can decide just what it is that you want from life and when you will have enough for you to feel successful and "financially independent"
Coming up with this "magic figure" may seem far too difficult a task, but I would like to share a strategy that I stumbled across in a "happy clappy" self help book that I read a few short years ago, I've read so many that to recall exactly which one it was would be incredibly difficult, but I did find it a great way of answering the extremely difficult question of how much you "need."
It went something along the lines of...Find the amount that you must have per week to cover all of your expenses, such as
What you may ask is so magical about this number...?
GOOD QUESTION.
Well it is the exact amount that would free you from needing to go to work in the next 12 months, doesn't that sound good?
I should pause to say that of course you may love your job, and that is awesome, and if you are one of the select few who can make this happy statement, then I am genuinely happy for you, but I should point out that a few years ago I had a position as a warehouse manager and despite the fact that I never received more than £7 per hour, I LOVED the job, which was all well and good, but when a period of economic turmoil hit it turned out that I loved the job more than it loved me and I was downsized out of the company!
My point?, well its just this...When you work for someone else you never truly have your destiny in your own hands and I don't see that situation getting much better for at least the next few years, Do you?
And even if you do love your job, it would still be nice to have the money in your life to go to work purely and simply because you wanted to wouldn't it?
Back to the calculations now, once you have ascertained your magic number multiply it by 12,
So for example, lets assume that your figure is £12,000
£12,000 x 12 = 144,000
What is the relevance of this number you ask? , quite rightly...And I think you ask a bloody good question I have to say
Well if you had this amount in the bank, it would pay you in interest each year almost exactly the amount that you decided you needed to take care of all the essentials in life (your magic number), so that you would never NEED to work again.
The reason I have spent so much time on this is that when I did this exercise, I was shocked at how low the amount was in relation to what I had always believed it was, I used to ponder what amount would free me from the need to ever have to work a job again, and I'd come up with figures ranging from £1 million to £2.5 million, but it was sooo much lower.
Any credit agreements, mortgages etc, will be diminishing and eventually disappear from you life over the time of saving or making this amount.
THE TRICK HERE IS TO KEEP WELL, WELL, WELL AWAY FROM OBTAINING FURTHER CREDIT OR LOANS AS YOUR EXPENSES SHRINK.
I hope that you don't see this amount as beyond your wildest dreams or far too insurmountable a money mountain, the likes of which you will never behold with your very own eyes, because that would be incredibly sad. I hope the power of the dreams of the future you are even slightly visible to you now because that will inspire you to move forward into achieving that which you want to make manifest.
A couple of points to help shove you forward in your thinking
Steven ; )
Well there is a problem for you there already dear reader, because how can you possibly relate to such an erroneous statement, you see from the second that I selected that particular phrase, our paths with regard to the rest of this conversation may have started to meander gently off in different directions.
OR THEY COULD HAVE VIOLENTLY SWERVED OFF IN SUCH OPPOSING DIRECTIONS THAT A DIAGRAM ON PAPER WOULD LOOK LIKE 2 JUVENILE DELINQUENTS BOTH DOING HANDBRAKE TURNS IN A McDONALDS CAR PARK, ONE HEADING NORTH AND ONE SOUTH!
You see the reason for this is that phrases like "financially independent", mean such radically different things to different people!
You may want a castle made from solid gold with diamond encrusted ramparts 200 trained meerkat butlers and a liquid cash accumulation of £1.68 trillion pounds, just in case the one castle becomes a little cramped one day, or the meerkats run away to pursue careers in acting and go on to have incredibly successful careers selling car insurance, (If you are from outside of the UK, this may not make a lot of sense but google comparethemeerkat.com TV advertisements, and it will probably make more sense than the rest of my blog)
Conversely, you may want a couple of thousand pounds in a building society account for emergencies and a comfortable "paid for" bungalow with a spare room to display your collection of wonder woman action figures.
Neither of these scenarios is the right or indeed the wrong one. There is no amount of money that is grand enough or not grand enough, this information is not to be voted upon or judged by the masses...Its your own guide stick for how good or bad you are doing on your own pre determined road to financial freedom or independence. I guess what I am trying to convey here, (with far more words than are necessary as per usual), is that this is a very personal thing to assess and only you can decide just what it is that you want from life and when you will have enough for you to feel successful and "financially independent"
Coming up with this "magic figure" may seem far too difficult a task, but I would like to share a strategy that I stumbled across in a "happy clappy" self help book that I read a few short years ago, I've read so many that to recall exactly which one it was would be incredibly difficult, but I did find it a great way of answering the extremely difficult question of how much you "need."
It went something along the lines of...Find the amount that you must have per week to cover all of your expenses, such as
- rent or mortgage
- utilities, gas, electric, water, phone, Internet
- any credit agreements
- loans and the "dreaded plastic"
- food, clothing
- rates, council tax
- vets fees
- medical expenses
- cost of keeping your car on the road
- school expenses
What you may ask is so magical about this number...?
GOOD QUESTION.
Well it is the exact amount that would free you from needing to go to work in the next 12 months, doesn't that sound good?
I should pause to say that of course you may love your job, and that is awesome, and if you are one of the select few who can make this happy statement, then I am genuinely happy for you, but I should point out that a few years ago I had a position as a warehouse manager and despite the fact that I never received more than £7 per hour, I LOVED the job, which was all well and good, but when a period of economic turmoil hit it turned out that I loved the job more than it loved me and I was downsized out of the company!
My point?, well its just this...When you work for someone else you never truly have your destiny in your own hands and I don't see that situation getting much better for at least the next few years, Do you?
And even if you do love your job, it would still be nice to have the money in your life to go to work purely and simply because you wanted to wouldn't it?
Back to the calculations now, once you have ascertained your magic number multiply it by 12,
So for example, lets assume that your figure is £12,000
£12,000 x 12 = 144,000
What is the relevance of this number you ask? , quite rightly...And I think you ask a bloody good question I have to say
Well if you had this amount in the bank, it would pay you in interest each year almost exactly the amount that you decided you needed to take care of all the essentials in life (your magic number), so that you would never NEED to work again.
The reason I have spent so much time on this is that when I did this exercise, I was shocked at how low the amount was in relation to what I had always believed it was, I used to ponder what amount would free me from the need to ever have to work a job again, and I'd come up with figures ranging from £1 million to £2.5 million, but it was sooo much lower.
Any credit agreements, mortgages etc, will be diminishing and eventually disappear from you life over the time of saving or making this amount.
THE TRICK HERE IS TO KEEP WELL, WELL, WELL AWAY FROM OBTAINING FURTHER CREDIT OR LOANS AS YOUR EXPENSES SHRINK.
I hope that you don't see this amount as beyond your wildest dreams or far too insurmountable a money mountain, the likes of which you will never behold with your very own eyes, because that would be incredibly sad. I hope the power of the dreams of the future you are even slightly visible to you now because that will inspire you to move forward into achieving that which you want to make manifest.
A couple of points to help shove you forward in your thinking
- In the United states, there are over 5.2 million millionaire households
- In the United Kingdom there are over 300,000 millionaire households
Steven ; )
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