How to Achieve Financial Independence

I achieved my financial independence several years ago and I thought I shared my experience in case it is useful to you.???

I don't quite agree with the typical FIRE (financial independence, retire early) program which focuses on savings a high percentage of your income. During the early part of one’s career, it won’t be wise to focus on savings. My starting salary as a fresh graduate was US$1300 per month. Whether I saved an extra US$100 more each month has little impact on the later part of my life but whether I developed myself would have huge implications 10, 20, 30 years down the road. ?

1. How to spend

I have always been a course junkie. Each year, I would spend a few hundred to a few thousand dollars to attend courses ranging from graphic design and photography to selling skill and public speaking.?These skills help me increase my income multiple folds in the later part of my career.

As an engineer (by training) with no social skills and no finance knowledge, I took my entire savings to pursue a masters in finance at Lancaster University in the UK in 1996. The investment paid off as the course prepared me for an international banking career.

When I could afford it, I spent money to engage personal trainers to train me at the gym. There is no point of achieving financial independence when you don’t have the health to enjoy it.??

I also buy drinks and host networking events regularly because building relationships is critical in getting more job and business opportunities later on.

2. What to save

Of course, we should not spend all the money we earn. When it comes to savings, I focus on the bigger items like accommodation and cars.?

I moved out of my parents’ public housing apartment only after working for five years (in Asia, it is quite common to stay with parents). I delayed my car purchase for a year. In Singapore, cars are expensive. Slightly better cars cost more than US$100k.??

I hardly buy branded goods. My bags are from Muji which served me well. My suits are tailored in Hong Kong which cost much less than those from high end fashion brands. I don't assess people based on the brand of clothes or watches they wear, so I assume they won't pay attention to mine as well.??

The above delay gratification saved me enough money to put down a downpayment for my first property.?

3. Start investing early

Relying solely on your day job salary would be difficult to achieve financial independence even if your salary is high. High income earners tend to have a more expensive lifestyle to upkeep.?I know this because there are many in my circle.

So it is quite important to invest your money. I started investing after working for about seven years. My first major investment is an apartment for my own stay. To service the mortgages, I was “forced” to set aside part of my salary each month. Besides real estate, I also invested in stocks. I have less than 10 stocks in my portfolio and tend to hold them over the long term. I don't invest much in funds. I made investment decision usually once a year.? ?

4. Have multiple sources of income

I have been a guest lecturer teaching at several universities for more than a decade while holding a full time job in banking. While the money from teaching is not a lot, it is a source of income which continues after I quit my banking job. I enjoy teaching and interacting with my students. It is quite nice to get paid for doing the things you like.??

My other sources of income come from?

• Executive coaching
• Speaking at conference
• Training
• Sponsorship of content and events

Of course, you need ensure there is no conflict with your day job. You can also consider becoming an advisor or consultant to companies you had worked for. With technology and work-from-home arrangement, it is now easier to run a one-person business that you are passionate about. ???

5. Incorporate Your Interests

Many people want to be financially independent because their current jobs are either stressful or boring. Sometimes, they have incompetent boss or they have to deal with office politics. Work can really take a toll on people mentally or physically, often both. One way to address this problem is to incorporate your interests into your work. I would conduct training for colleagues from other departments because I enjoy teaching. This honed my teaching skills which helped me become an adjunct associate professor years later. I often volunteered to be the photographer at my bank's events. Shooting photos at those events has helped me become a better photographer. The skill comes in handy today as I create content on social media.?

When you incorporate your interests into your work, you will enjoy your work-life better, and you won't feel the need to become financially independent so early.

Below is the survey result on the amount people need to be financially independent. Whatever amount you have in mind, I hope you will achieve yours. Good luck!?