Financial independence: How can you declare and how is work after that?

Today I am delighted to introduce my new friend Good Nelly from the popular blog  MyWayofViewing.  Good Nelly is a very talented financial writer and it is a honor to have her with us on our site.  In this post she will share a little bit about financial independence.





What is financial independence?
You can say that you are financially independent when you don’t have to work anymore to meet your daily necessities. You can still continue working for your pleasure or for job satisfaction, but it can be a part-time job or what you like to do.
Before going into the discussion of what work could be like after you become economically independent, first let’s discuss when you can declare that you’re financially independent.


You have multiple sources of income
Apart from social security income, you should have a good investment portfolio with interests and dividends. Do you have any part-time work or a monthly pension? Then also, you can be financially independent at retirement.


You have paid off your mortgage loan
You shouldn’t declare yourself economically independent if you’re making payments on your mortgage loan. So, if you’re close to your retirement, try to repay your mortgage loan. However, check out whether or not there’s any prepayment penalty on your home loan; if yes, then talk to your lender that you want to repay your loan fast.


You have reached your FI number
You need to calculate your Financial Independence (FI) number to know how much you require to consider yourself financially independent.
The first part of the formula is:
Financial Independence number = Yearly how much you spend / Safely how much you can withdraw
Next, calculate how many years it’ll take to attain your FI:
Years remaining to achieve FI = (FI number – How much you’ve already saved) / Amount you’re able to save per year
It is advisable you save at least 20% of your gross monthly income to attain financial independence.
And, also, you need to calculate your net worth.


How is work after attaining economic independence?


You can continue working fearlessly
When you’re doing a job, you always have the fear of getting laid off. However, when you attain your FI number, working becomes fun! You are no longer afraid of having to continue your job and adjusting yourself to the workplace. If required, you can put down your papers any time and may get a lump sum amount as well.


Working becomes fun
You attain more job satisfaction when you work on your own terms. Even you can continue a part-time job as per your wish. You look forward to do your work instead of motivating yourself on a Monday morning. You look forward to Monday since you’ll do what you like.


You are much more confident than before
When you become confident in what you’re doing, you don’t have to strive hard for the results and success comes to you without much try. A confident person can make more good decisions.


You can select your own peer group
We all know that we have to be around with people to make connections due to your business or you’re compelled to because they are your seniors in your job. However, when you become financially independent, you can spend time with people you want to.


You don’t hesitate to say “what’s right”
Just think once – How many times have you wanted to speak what is right but you couldn’t because it was a question of your reputation, irrespective of whether you have a business or a job? However, when your reputation doesn’t matter anymore, you can raise your voice against injustice.


You can do something new without the fear of failing
Since you’re not afraid to fail, you can do whatever you want to do. You can learn from your mistakes and start successful ventures – like investing in more profitable returns.

Whether or not you will continue working after achieving financial independence is exclusively your decision, but you should try to achieve your FI number. If required, you can consult with a financial advisor to set practical goals to attain financial freedom within a definite time period.


Author Bio – Good Nelly is a financial writer and a blogger as well. She writes regularly on her personal blog MyWayofViewing on a variety of topics and she also contributes her valuable posts to different financial communities, blogs and websites too. You can also check out her social media profile at GP for more information. Besides writing, she enjoys reading and loves to travel a lot. For any query, you can email her at

Do you have millionaire habits?

Did you know that only 20% of millionaires in America inherited their money and the other 80% are first generation millionaires.  This 80% didn’t build their wealth by accident or do it overnight. These millionaires set goals and do whatever it takes to accomplish their goals. I thought I would make a short list of habits the wealthy have that the average middle class worker’s don’t.

Start early in life

Time allows you take risk especially when it comes to investing.  Starting early gives you the opportunity to take on more risky investments and recoup from them if they fail. Millionaires understand this and they also understand compounding interest. The longer money compounds the faster it grows.  Lets say that money growing at 6% percent a year will double in 12 years, but that same money will be worth 4 times that much in 24 years. That why compounding interest has been called the 8th wonder of the world.

They don’t act rich

You won’t hardly ever catch the average millionaire living in a million dollar home or driving a new $70,000 car.  Millionaires spent their money on assets that appreciate and they very rarely spend their money on liabilities.  According to studies the average millionaire drive Toyota’s and not Bentley’s or range rovers even though they can afford them.  In the book Millionaire Next Door by Thomas J Stanley, he found that people with a high net worth usually live below their means and value financial independence not social status symbols.


Your average millionaires are focused individuals. They set goals and are eager to achieve their goals. They don’t set back and rely on others accomplish their goals.

Extremely confident

Most millionaires are not cocky or arrogant they are just extremely confident. They have a “I can do anything attitude”.  They have great confidence in themselves and their family.  They are not afraid to fail and when they do they are confident in their ability to learn from it.

Always thinking about the future

Millionaires know that the future is just around the corner. They know if they want to stay wealthy they have to plan for the long-term. They don’t just set around and wait for opportunities that will impact their futures.

Millionaires Read

Your average millionaires are readers. They are constantly learning and studying. According to a resent study 85% of millionaires read two or more books a month. They choose to read non-fiction books and books on successful people.

Don’t waste time

Your average millionaire knows that time allows their money to grow but they don’t like wasting their time.  They know time is something that cannot be bought. Studies show 70% of all self-made millionaires spend less than 45 mins a day watching T.V.   They also spend less time surfing the internet, scrolling Facebook or watching youtube videos.  It’s very rare that you will catch a millionaire playing games or wasting time on their cell phones.


So do you portray any millionaire habits?

Are you wasting time?

What are you doing to reach millionaire status?



Do you know your net worth?

The Joneses

Ok so you got a neighbor, friend or a family member who is always posting the coolest social media pictures of their nice house with the big pool in the backyard, them driving their new cars or them hanging out on the lake in their new boat.  Oh yeah, how about those vacation pictures?  Well, if you think they own all those items or pay for those fancy vacations your probably wrong.   When I look at these people, I always wonder if they sold all of the stuff they owned and paid all of their debts what money would they have left over.   On average the household net worth for ages 35-44 is only $35,000. Now how’s that? They are driving new cars, boats and living in a $200,000 house. Most of what you’re seeing is on credit because the average american has so much credit that they can’t even hardly afford to put gas in those financed boats and cars.  In reality, they owe as much on theses items as they’re worth, so it does nothing for their wealth. This is why I recommend everyone do a net worth statement just to see where you stand.

How to figure your Net Worth

To determine your net worth you need to make a list of your assets and their value. An asset is anything you own of value that can be converted into cash.  When figuring the value of your assets you need to be realistic and do some research to figure their correct value.

So let’s get started, here are some examples of assets you may own.

  • Personal Property
  • Your automobiles, boats, motorcycles, tractors
  • Money in the bank, cash on hand
  • Money that is owed to you
  • Cash value of insurance policies
  • Investment accounts, Roth IRAs ,mutual funds, 401k
  • Your home, vacation homes


Now list all your liabilities and their balances. A liability is anything you owe money own.  Here are some examples of some liabilities an average american may have.

  • Mortgage
  • Auto, Boat, Motorcycle, RV loans
  • Credit Cards balances
  • Student Loans

Now that you have made a list of all of your assets and liabilities and their values we need to subtract the two numbers to find your net worth.

Are you average?

Here is a list of the average american household net worth by age in the US. including their home.

  • > 35        $6,600
  • 35-44       $35,000
  • 45-54       $84,500
  • 55-64       $149,950
  • 65+          $170,500

When seeing the averages I was shocked that how low the average net worth by age was.

Why figure your Net Worth?

Your net worth statement is a financial snapshot of how you’re doing.  You need to know this information to set financial goals you are working for and to track your progress.   My wife and I do a net worth statement at the first of every month.  Doing this gives us an idea of how we are doing financially at that moment in time.  A net worth statement always gives us an idea on how our investments are doing and what kind of adjustments we need to make from month to month.


So is your net worth below average, average or above average?

Can you retire early?


Can you retire early?

Of course you can! But your going to have to stop throwing your money away.  The biggest thing that stands in the way of people retiring early is DEBT, because it keeps you from saving money, investing money and buying assets. The average household in the US carries a lot of debt and according to a resent study, the average US household carries a little over $200,000 worth of it.  So when you think your friends on social media are doing so good, their probably not.

Credit Cards

I hate credit cards period and my opinion on credit cards is that no one needs them. To be honest I have never ever had one. I don’t care how many points I can get or how many miles I can get, rewards don’t make you wealthy.  If I can’t buy it with cash, check or debit I don’t need it.  So lets take the average credit card debt in the US and make the minimum payments like statistics show 80% of american households do.  It will take you over 17 years to pay off your debt if you make the minimum monthly payment on the average US household balance of $15,263.00 with a 14.95% APR.  You will pay $10,498.36 in interest charges alone.  I know that some of you have credit cards and pay off the balance at the end of the month and that’s great but according to a study people spend 47% more money at stores when paying with credit over cash or check. If you think you can beat the banks and the credit card industries your wrong, they know how to get you to spend your money. So think about it before you fill out that next credit card application. Credit Cards are like snakes, if you play with snakes long enough one will eventually bite you.


According to LendingTree the national average home loan is $222,261 with a $1,061 average monthly payment for 30-years.  That means on average if they keep their houses they would be paying over $150,000 in interest. You should never go over 15 years and always get a fixed interest rate.  I believe if you can’t put down at least 25% down you can’t afford the house.   You  should always keep the payments less than 25% off your take home pay and NEVER buy a home for the price they tell you you’re pre-approved for.  Take the pre-approved amount and divide it 25% and that’s what you really can afford.

Car Loans

Now finally lets talk about the worst thing you can throw your money away on. The average new car purchase in the US is $30,032 with an average payment of $503 over 70 months. New cars and trucks depreciate about as fast as anything you can buy. On average, a new car will lose as much as 19 percent of its value in its first year of ownership.   Thats not including the money you lost on the wear, maintenance, collision insurance and interest you are paying on the loan.   When you go to purchase a car and you can’t pay for the car with cash, you can’t really afford the car. You might be able to afford the monthly payment but technically you can’t afford the car.  Always buy good used cars that you can pay cash for.  Trust me there are plenty of them out there to choose from.


Now are you starting to see why people are having to work so long and why the average american is working well up into their 60’s. A new survey shows that the average American has less than $1,000 in their savings account and the median working-age couple has saved only $5,000 for their retirement because of all this overspending.  If you ever are going to a have a shot at early retirement you are going to have to make sacrifices in your lifestyle.  When we were trying to hit our goal of financial independence my wife and I shared a car , lived in a RV, and then a 490sq ft apartment not because we had to, only because we knew what it took to save money.   As you build wealth you will realize that you don’t need all those typical social status symbols.   Our daily driver is still a 14-year-old Toyota and our newest vehicle we own is a 2006 Ford.  Always remember according to statistics, 84.5 percent of new cars and 74 percent of homes in America are financed.  Honestly, there is NO way to build wealth by throwing your money away on interest.  If you really want to build real wealth and have a shot to retire early you must understand that every dollar you spend in your early working years should be spent as an investment outside of basic living expenses.  So what I am trying to say is don’t try to keep up with the Joneses because they’re in debt up to their eyeballs.


What kind of sacrifices are you making so you can retire early?




Traditional Retirement

When we hear the word retirement most of us think of the golden years in life. Ya know the 62+ year olds who have finally put in enough time and are ready to draw Social Security.  They’re the people who have put in years of hard work and are finally ready to enjoy the fruits of their labor.  They are ready to sit back with grandkids, play some bingo and if they were lucky enough to save some money along all those years, they can buy a RV and hit the road for a trip or two.  The only problem with that is that they don’t get to enjoy the fruits long enough.  According to a resent study the overall life expectancy is just 78 years old.  The life expectancy for the average American man is 76 and for women it is 81 years old.  The study also concluded by saying if they were lucky enough to make it past the average death age that the average age for being admitted to a nursing home was 83.  So what I get out of a traditional retirement is that if you are wanting to enjoy your retirement you better do it quick.


 Early Retirement

My definition of early retirement is when you become financially independence before the age of 49. You can read all day long on the internet of people like me in their 30’s and 40’s who have taken an early retirement because of saving and investing a big part of there income. We have saved enough in investment accounts and assets to tell the boss man to take his job and shove it.  No, we are not people who got a big inheritance or who won the lottery.  We are just ordinary people, just like the 62+ year olds that retire every day, only we did it quicker.  We are super savers that watch what we spend and treat our money like family. People like us shop for the best deals on everything.  We don’t buy on impulse and could careless about what the Joneses are wearing or driving. In other words, we live below our means and live as simple as possible.

My wife and I have been retired for almost 2 years now.  When we hit our goal of being financially independent, we knew we didn’t want to quit working all together.  We were still young and we wanted to still use our mind and body; and we have.  The past 2 years have allowed us to try new adventures like allowing couples to get married on our farm.  This is something that we like to do, it gives us the chance to meet a lot of new people  and “yes” we do make a little money in the process that helps us make some upgrades on the farm.  In the past 2 years we have been doing some traveling and spending time with family and friends, something we never had the time to do while we were working full-time.  So, after 2 years I would definitely say that is was all worth the sacrifices we made to get here today.

What’s your definition of early retirement?