Good morning! Today, Jon from MoneySmartGuides shares his thoughts on financial independence and jokes about possibly becoming my neighbor in Guatemala. If you’re interested in guest posting on RFI, let me know.
You can find me today on Stacking Benjamins, discussing how to plan for your financial future, and on Club Thrifty, talking about making money from home. On Make Money Your Way, Jessica Larrew is sharing how she earned over $100,000 on Amazon last year. It’s a busy but productive day!
When I was a kid, I thought being financially independent meant having a huge mansion, flashy cars, and tons of stuff. I don’t even remember what those “things” were; I just equated having them with having lots of money. Funny enough, I also wanted to be a garbage man when I grew up. Thinking about it now, you could probably do well with the right mindset. After all, one man’s trash is another man’s treasure!
**Post-College Debt**
After graduating from college, I thought everything would fall into place. I imagined getting a high-paying job, buying a mansion, and becoming a CEO by 30. Reality check: I got the only job I was offered, making $27,500 a year. I didn’t let that stop me from living well, maybe too well, because I ended up with a significant amount of credit card debt.
I was spending money to make myself feel better for not being where I thought I should be. Buying things gave me a temporary high, so I kept doing it and maxed out two credit cards. Eventually, I opened a third card with a 0% interest rate on balance transfers, planning to pay off the other cards. But soon enough, I started spending again, and that’s when it hit me: buying things wasn’t solving my problems. I laid out everything I bought on my bed, took a picture, and reminded myself to think before buying anything else.
**My Big Realization**
As I reined in my spending and paid off my debts, I realized what truly made me happy: spending time with friends and family and doing activities I love. Things didn’t bring me happiness; people did. I wanted the time to build special experiences with them, which meant I needed a plan.
**My Plan**
To enjoy the experiences I cherish, I need money, but I don’t want to be tied to a desk for 40 years to get it. So, I diversified my income. We all know diversifying investments is crucial because it reduces risk and slightly increases reward. The same principle applies to income.
I have a full-time job, which is my primary income source. I also invest in the stock market, run three blogs, and do smaller things like selling items on eBay, taking surveys, and selling scrap metal. While these side activities don’t make a lot of money, every bit adds up and gets invested to grow over time.
**Final Thoughts**
Looking back, I see that my younger self didn’t really want financial independence. I wanted to be rich, like Scrooge McDuck. Now I understand that being rich and being financially independent are not the same. You can be financially independent without being wealthy in monetary terms.
There’s a saying I love: “It costs a ton of money to live like a King for a day, but you can live like a Prince forever on much less.” This means you can either live extravagantly for a short time or comfortably for a long time.
Here are three key takeaways from my experience:
1. Understand that things cost more money than you think. It’s not just the purchase price but the ongoing costs that can really hurt your finances.
2. Find a way to earn income from something you love. I enjoy my job but I love blogging. It’s amazing that I can make money from it. It’s not easy, and it takes a lot of work, but it doesn’t feel like work to me. Think about what you love doing and see if you can turn it into an income source.
3. Always keep learning and growing. Before discovering this blog, I thought I needed a lot more money to become financially independent. Learning about life in Guatemala made me realize that financial independence can be achieved with what I already have, especially in different places. Learning helps us grow and become better people.
Jon writes for MoneySmartGuides, a personal finance blog focused on helping people achieve their financial dreams, especially through investing and paying off debt.