A road trip to financial freedom
| Financial freedom | Retirement | ETFs |
|---|---|---|
| TFSA | Offshore | Property |
| Markets | Investment terms | Fees |
Topic: Financial freedom
Tia says, "I’m self-employed and enjoy my work. Even though I’m fit and healthy, I’m thinking I should get a back-up plan and make sure I no longer need to work by age 65." Tia is 50 and by most standards a late starter to financial freedom. She has zero retirement savings. Is it too late for her to reach financial freedom?
I didn't make a big fuss about reaching financial freedom, but it's a pretty good feeling. It's been a year now since I've left corporate employment to rest, play, and set off in a new direction. Thankfully, my expenses have stayed under control and my portfolio feels moderately stable with a cash buffer built in. This is my annual financial freedom review and a few thoughts on reaching that big financial freedom goal.
Low interest rates during lockdown and stimulus handouts in countries such as the US fuelled a bubble in the markets that had to burst at some point. The shimmering orbs imploded spectacularly in 2022 with the S&P 500 down 15% and the tech-heavy Nasdaq down 26% for the year. South Africans with most of their portfolio offshore would have felt the most pain, while those who stuck to local funds can count themselves lucky if their portfolio beat inflation. My own portfolio grew by 7% but most of that came from adding more to the 'pot'.
It's been a good year in the market. Most of my funds gave a return of more than 20%. And when the sun shines on the markets, it shines on everyone. As I suspect was the case for most of you, my portfolio saw a strong growth spurt in 2021. And with my travel expenses contained by the restrictions of a pandemic and the weight of quite a lot of work on my plate, I found myself buoyed closer to financial freedom.
For most of us on the road to financial freedom, the idea is not to stop working, but to not work so hard and only on the jobs we love. The economist Keynes forecast that working to solve for economic scarcity would be a thing of the past by now for all humans, freeing us up to enjoy as much leisure time as we need. Still we’re stuck with a 40-hour work week. Why is this?
The FIRE movement sometimes makes the mistake of thinking that 'early retirement' is the only way to gain financial freedom. But there are other recipes for earning an income and being free. The one key ingredient in all recipes for sustained financial freedom, though, is being able to live below your means.
This is my favourite blog post of the year. Probably because 2020 has been an exceptional year in terms of moving towards my financial goals. When I started this blog, I was 52% on my way to financial freedom. As of today, that figure stands at 75%. What made such a big leap possible?
It's a new year and my blog needed a new name - easier to remember, accurately describing a journey to freedom, and now a proudly South African domain. Welcome to Go Freedom!
It’s almost six months since I launched this website and time for an update on my journey to financial freedom. It’s been a mostly smooth drive since June and my overall feeling is one of being hopeful. If this update was a song, it would be Jenn Johnson's 'You're gonna be OK'.
Let's face it. It's hard to relax on holiday when your wallet aches every time you want to do, see or eat something. But there are ways to see the world that fit most budgets. Here are some frugal travel tips for those who need to find out what's on the other side of the fence.
Soon we’re off to Greece for our second holiday this year. Partly possible because I haven't bought a new car in almost 17 years, but also because I've spent the past few years trimming down my running costs to the bare minimum that would work for me. This is how I manage living below my means. Well, for most of the year.
Are there routes to your financial freedom magic number other than the 4% rule or rule of 300? Because 300 times your monthly expenses is kind of a tall order and maybe you are feeling somewhat 'flat tyres' after reading the previous two posts. Time to look at other formulas that could work better for you when considering how much is enough?
Four things that can go wrong with the 4% rule
The 4% rule is a great guide towards your magic number - if you keep in mind that it's a rule of thumb and like all simplification it has the potential to trip you up if you're not aware of its shortcomings. Here are the four main possible 'wobblies' you need to prepare for.
The 4% rule / rule of 300 - how to calculate your magic number
If your GPS is set on financial freedom, that place where you can just be for a while and march to your own beat, you'll need to know your magic number. The amount at which you can say, 'If I quit my job now, I'll be OK for a very long time.' Fortunately, you don't need complicated maths - if you use the 4% rule or rule of 300.
Why I (sometimes) fake financial freedom
It can no longer be postponed. After more than seven years since my last one, and five years with Big Investments Group (B.I.G.), air punching and silently screaming behind closed doors, I’ve lined up a sabbatical. Two months out of the office. Out of reach. Released from duty. Free to do-be-do.
Will we live a long, long time?
According to legend, if you look into the Well of Reflection at the cemetery of the sacred temple village of Koyasan and do not see your own reflection, you will die within three years. So it happened that I contemplated my own mortality every step of the way back into the village, feeling a little pale and unsettled. I don’t know if it were the clouds that added to the illusion, but for the life of me I could not see my own reflection.