Ricard Torres used to have a promising career as an engineer, but he realized the typical 9-5 lifestyle didn’t make him happy. So, he decided to pursue financial independence by creating online businesses, smart spending to maximize happiness, and investing. Here’s what he’s learned on his journey.
Starting on the road to financial independence gives you a leg up compared to most people. You need to be persistent, patient, and skilled in money management and investing. But one key skill that might not be immediately obvious is resilience – the ability to bounce back from adversity.
Everyone faces setbacks, and you will too. Our brains often trick us into thinking that good times will last forever, but that’s rarely the case. Being aware that things can go wrong puts you in a better position to prepare mentally and financially.
Let’s talk about what happens if you lose your job, which can be a nightmare scenario. Most people, myself included, take their paycheck for granted. I had a specialized job that I didn’t always enjoy but thought I was indispensable. I felt secure because I assumed my skills were too valuable to lose.
Everything seemed great. My financial charts showed a constant upward line towards financial independence. But then, I was unexpectedly laid off. The first feeling was overwhelming anxiety, followed by fear about how to pay bills and support myself and my family. It made me question if my dream of financial independence was over.
Here’s how to prepare for such a situation. Firstly, having an emergency fund is crucial. It’s your first line of defense. I built mine by drastically cutting my spending for a month to see what the absolute minimum I needed to live on was. Then, I saved enough to cover this minimum lifestyle for a year. This fund can be a lifesaver, giving you time to adjust without panicking.
If you want to stay in your field after a layoff, keep your CV updated. Every six months, review and refresh it with new skills and accomplishments. On the other hand, getting laid off might be an opportunity to step back and consider a career change. It takes around ten years to become an expert in something, so if you’ve hit that mark, it might be time to challenge yourself with something new.
Another way to cushion the blow of losing your job is to diversify your income sources. Before I was laid off, I started small side businesses that brought in extra cash with just an hour of work each day. This wasn’t just a safety net; it was a proactive step towards financial stability. One great idea is to start a blog about something you’re passionate about. Over time, you can build a following and even monetize it.
Remember, the path to financial independence is filled with bumps. Losing your job and seeing your savings rate drop to zero can feel devastating, but it’s just a part of the journey. Think of tough times as necessary steps to reach the good times. Adversity doesn’t derail your plans; it’s a short-term setback.
The key is to stay focused on your goals. With an emergency fund and multiple income streams, you can withstand any financial hiccups on your way to achieving financial independence and living life on your own terms.