If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.
If you enjoy the blog, also consider the book which is much better organized and more complete. You can read the first chapter for free, listen to the preamble, or see the reviews (1,2,3,4,5,6,7,8,9, A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,Z). Subscribe to the blog via email or RSS. Get updates on the facebook page, join the forums, and look for tactics on the ERE wiki. Here's a list of all the ERE blog posts.
Imagine for a second that you have $250,000 in the bank; in fact, imagine that everybody through some miracle started with that amount and that you withdrew $10,000 annually which was more than enough to live on… that last part may be hard to imagine for those who are used to consumerism, but for the sake of the argument, assume you were experienced in living quite well on that amount.
Now, suppose you were given a choice.
- Keep living this way.
- Spend the $250,000 on a house amongst many other things making it necessary to maintain employment or some other working income for the rest of your life.
Which would you find more scary? I think a lot of the fear of relying on investment income to “make” a living is simply due to a lack of familiarity with it. To me it seems a lot safer than relying on an employer.
Fear all depends on what one is used to. It is largely connected to uncertainty which is largely connected to ignorance. To become less ignorant, however, one must necessarily do things which seem scary at first.
Originally posted 2010-10-09 00:27:05.
