Start Your FI Plan EarlyThe next big secret for achieving FI is to start early. The benefit of time when saving and investing has a wonderful compounding affect. Saving in a methodical steady way and accruing growth or equity in properties or investments allows your money to work for you. This is the concept investment advisors tell you about, the compounding of money over time that grows and grows in your account. The story about saving $100 every week and then in 30 years, with interest, it is worth one million dollars!! Or, investing in a balanced index stock fund that grows by 7% per year, etc. This is the math of compounding earnings, but it is no secret really.. it is what runs the world.. for those that use it. So, consider your age as an indicator of progress towards the goal of Financial Independence and that at any given future age, certain financial target levels (such as Total Savings for example) would be part of the plan. Do you want a million bucks by the age of 40 or 60 and will that be enough? Or, do you want to pay off the house you bought by the age of 40 or 60 and will that be your forever house?
As you ponder these questions, it is obvious that your life's choices will profoundly define your Earn-Save-Invest plans for Financial Independence. And, there are certainly quality of life questions that surround how all that "Saving" will affect your "Spending" and how you live your life. That's why your FI plan needs to start early, reviewed and revised often, and stay balanced with your life goals. Certain key age milestones may anchor elements of your financial plan and carry great weight on whether your plan will be successful or fail. Some of the typical age milestones may include:
Whatever FI planning you may define, the goal and pursuit should be constant. The benefits will far exceed the efforts and sacrifices along the way. Reference Information |