Just finished “The Simple Path to Wealth”
Just finished “The Simple Path to Wealth”. Superb.
1. Live WAY below your means
2. Invest savings in low cost index funds (VTSAX)
3. When your investments total to 25x your annual expenses, you’re financially independent. You’re free to live life on your terms. 🏝
Example: If you can live off $30k/year, you’re financially independent when you have 750k invested in low cost stock index funds.
The goal isn’t necessarily “early retirement”. The goal is freedom.
Financial independence = freedom to work on what you care about, when you want.
So how do some people manage to save 25 times their annual expenses? By cutting expenses even while growing income, and consistently investing the savings.
You have to want freedom more than you want that flashy new car.
A mindset that has helped me is thinking about debt and needless spending as voluntarily reducing my freedom.
To highlight the value of cutting expenses, for every $100 per month you can trim, it means you need $30,000 less to achieve FI ($1,200 yearly expense x 25 = $30,000)