“Instead of wondering when your next vacation is, maybe you ought to set up a life you don’t need to escape from.” – Seth Godin.
I want you to break free. Life is far too damn short to be stuck at a job that you hate, with a partner that you can’t stand or in the same debt that has been strangling you forever. I’ve pulled together all possible resources and ideas to make this possible for you.
However, it has been brought to my attention that I haven’t covered everything about financial freedom by 30.
I have a confession to make: I don’t know what the hell I’m doing 99% of the time.
When I started writing about personal finance five damn years ago I had no clue what was next. Some of my peers have fancy content calendars, budgeting software, and all sorts of other intricate tools. I have none of that. I just wing it. The same goes for my money. When I bought my first rental property, I did zero research. Yikes! It turns out that the area went through a boom and I made a handsome profit off the appreciation.
Did I plan this? Hell no. I usually don’t know what I’m going to do next.
This article was so supposed to be live a few days ago. Remember, I have no content calendar.
A second confession : I come from an immigrant family. Saving money is my default option. I don’t mean to be ignorant or arrogant when I cover money. I just never understood the idea of debt.
I know no other option. I can’t buy things that I can’t afford. I could never use a credit card to pay for random crap. Why would I buy something that I can’t afford?
The good news is that I’ve spoken to tons of readers and figured out how to help you in your 20s with your goals.
I recently shared with you how financial freedom is possible by 30. Today, I’ve created the ULTIMATE GUIDE.
What the hell is financial freedom all about?
“A desk is a dangerous place from which to view the world.” – John le Carre
It’s more a state of mind and being than a bunch of numbers in your bank account.
Okay, I just wrote something that makes me look like a damn hippie! I’m not a hippie. I actually haven’t had a drink in a few months. I’m more focused than ever. Sadly, the focus is making me sound like a hippie.
Freedom is about paying off your debt, getting rid of your student loans, and being in control of what happens next. You see, we all just keep on keeping on in hopes of things improving eventually. I hate to break this to you, but unless you change your mindset or how you approach issues, nothing will ever change.
You can’t be mad about the results you didn’t get with the work you didn’t do.
I hope that this guide serves as a wake-up call to get you planning a bit better. As I mentioned, I don’t know what I’m doing 99% of the time. Thankfully, that 1% is when I pay myself first, avoid credit card debt, work on building my income, read more books, and attend conferences/events.
You don’t have to be perfect all of the time. You just have to change how you do some things.
This leads to an important question…
What are the numbers behind financial freedom?
I searched long and hard. I just don’t know how to answer this.
I was raised to not brag about money when times are good or to seek pity when times are rough. Pretty much, I was always told not to talk about money. I also was brought to be honorable, even when poor.
This is why I never reveal numbers on here when times are going great and why I try not to feel sorry for myself when times are lean.
What are the numbers behind your financial freedom? What should you strive for?
- Debt at zero. This includes mortgage-related debt but not investments. For example, if you own a rental property you likely won’t have this paid off for a long time.
- Savings of at least $25,000 or six months worth of living expenses. This will allow you to take some risks and have money in the bank to bail yourself out.
- Annual income at ??? I’m confused on this one. I’m working on building my income. This will vary on your lifestyle.
I personally spend a ton of money on food, yet I save money on other areas. I can get by on $50,000 a year before tax. Obviously I want more. What you can get by on is up to you. My ultimate goal is to make $100,000 pre-tax annually from all of my online ventures. Not there yet.
I have friends that live well on entry-level salaries. It depends on how you spend your money. But you already know that.
What’s your ultimate income goals? Could you live off less?
What are the steps towards financial freedom?
You need to do a few key things with your money to reach this stage. They are:
- You have to pay off your debt. There’s nothing pretty about this. You need to do whatever it takes to get rid of your debt so that your income becomes your income.
- Save money relentlessly and unapologetically. You have to be relentless if you want to see any results. Don’t create excuses to waste money. Setup systems so that you don’t even have access to your money.
- Invest! Take risks with your time or money. We all have money or time to invest. If you don’t have money, you can invest time into new projects that could bring you income in the future. If you have a decent amount of money, you can buy a rental property, get into stocks, or take other risks.
I’m very proud of our ultimate wealth building plan. Check it out and see how you can build up your wealth. I don’t want to get repetitive here.
How do you stack your cash?
Build your savings. Stack that paper. Call it what you want to call it. We all want money in the bank.
I covered how I saved $25k by 25. I also wrote an extensive guide on crushing debt. These two articles will help you beef up those savings and crush that debt. Read them and apply the tips. Then go back to getting wasted or doing something more fun.
As I just mentioned, you have to kill your debt and then start saving up money. What are the best ways to save money when you want to get hardcore?
- Consider some form of extreme living. If you want to see rapid results, you could try one of the many extreme strategies out there. Some folks have gone as far as to live in a trailer or to move to a third world country as they grow their business.
- Sell your crap. You can always get rid of crap for extra money. Every summer we host a yard sale where we sell our stuff and make some money. It’s usually likely your crap that got you into debt.
- Try to freelance for extra cash. If you want to boost up your savings, I always recommend freelancing for extra money. Why not spend less time on Facebook and more time on making money?
- Cut out a payment or two. I recently negotiated my cell phone contract to save more money. You should cut out a payment or two if you want to see real results here.
- Keep on going until you get there. Repeat. There’s no other way around it. You didn’t get into debt overnight. It’s going to take you a while to dig yourself out of this mess.
You just need to keep on saving up until you feel comfortable with where you’re at. Then the ball is in your court.
Common questions that we need to address are…
I receive many of the same questions from you guys in email form/Tweets/Facebook messages/over drunken arguments. I want to answer them all in one place.
Do I have to start a business?
Nope. Life is often what happens after work. You don’t have to love what you do and be passionate about being passionate while drinking passion juice. If you like your job, then all the power to you.
You can start an online business or freelance if you want to. You don’t have to. You can hustle at two jobs and work like a mad man to get out of debt. That’s cool too. It’s your choice. Starting a business isn’t mandatory.
Is it too late to get serious about my finances?
Yes. It’s always too late. Stop whining and start now. The best time to start something is always six months ago. The second best time is right now.
Does one have to be debt-free?
Yes. Financial freedom in my eyes is about not owing any money. It might take you longer to get out of debt, but you have to do it. Don’t stress if you have to wait until your mid-30s to pay off your debt. As long as you get there.
Do I have to travel?
Nope. Freedom is about being able to do whatever you want. To some it’s traveling more often, to other it’s being able to eat out lobster every Friday night with family and friends.
Is this the same thing as early retirement?
Nope. We already looked at the idea of early retirement. The goal here isn’t to be idle or retired. It’s to slap that debt across the face and be able to do cool things in our 20s. Why waste away our best years?
Why 30? Why not earlier or later?
Because I’m assuming and hoping that you’re in your 20s. 30 is just the age that I’m hoping for. It could be 28, 31, or whatever. That’s your call.
The whole goal of Studenomics and our journey is to be financially free and living the good life by 30. You can make excuses or you can join us. I look forward to seeing your progress.