Financially Free?

MDZ · #1 (**permalink**) 09-05-07, 09:25 PM

When this forum started, there was a lot of discussion on the topic of being financially free. What we meant when we said financially free was that the money coming from your investments covered your expenses.

I wanted to see how many of us are still aiming for that activley right now, or have achieved this goal. Feel free to share where you are at, or if you are just starting.

MDZ · #2 (**permalink**) 09-08-07, 06:03 PM

Okay, no discussion yet but that is fine. For me personally, getting to being financialy free is probably one of my biggest goals right now. Most everything I do is aimed at that goal, and I would like to be there by 25 (I am 22 now).

My plans for once I obtain financial freedom are to take a step back and really review where I am at in life, and then start again down a more focused path. Right now I have a bunch of ideas/ventures going, and some of them are not making that much money. I still keep them going though, becuase they are putting me closer to my goal of expenses<passive income.

I would like to become involved in venture capital, looking at new firms and technologies to see what will become big in the next few years. This is my plan.

Airelon · #3 (**permalink**) 09-10-07, 09:01 AM

Good topic . . .

A while back, I came up with a strategy to do so. I noticed that many wealthy entities, whether they be institutions or individuals, had several income ventures, all of which would feed the other, and feed off each other. So I came up with a little strategy that consisted of a few things:

Low Risk Bank Income:
By stacking CD's against one another in longer term CD Ladders, I would enjoy regular income, from long term CD's. For example, if you put $200,000.00 into a 5 stacked CD ladder, compounded quarterly - each a 36 month maturing CD - can yield you much more than a rollover single CD for that time period, and you get the liquidity since they are stacked.

Take a portion of the CD income (5%) and stick it towards Stock accounts.

Dividend Income:
80% of what's in the stock account goes towards Dividend Investing. It's a little method I developed when I studied the long term buy and hold strategies. It combines Dogs of the Dow, Seasonality, Dollar Averaging Investing and Dividend Investing - with a very specific screen.

Take 3% of my profits and stick it towards my Commodity Futures accounts. Another 3% of my profits, and stick it towards an account that will roll the money into the next maturing CD. So I therein create a circle in which two enterprises, are feeding each other. My CD's are feeding my dividend investing, which further feeds my CD, which further feeds my dividend investing; and so on.

Trading:
The most risky of my adventures.

I trade stocks (20% of my account), and futures options. I don't engage in stock trading from July 15th to November 1st. In that time, I engage in Futures Options trading. So far, I'm 6 for 6, and trying to pull out of the 7th Soymeal trade with a profit (I have a put option - December contract)

At the end of the year, take a percentage of the profits (around 5%) of the Futures trading, and split it. Half goes to the Bank for CD growth, and half goes to my investing accounts

MDZ · #4 (**permalink**) 09-10-07, 08:20 PM

This is a really good point that most people don't realize or think about. One of the greatest ways to build wealth is to allow it to feed off one another. A bigger example is owning a building, and then renting it out to other companies that you own.

I like how you talked about what you are doing, becuase it is totally different from what I am doing.

I work with a group that invests in property that is in a good area, but is run down and in need of repair. We then work on getting financing for the deal, and then manage the work while it is being done. Some of this work we are able to take care of businesses owned by ourselves, so this is how we are able to "feed" one venture off of another.

My plan is to continue working in real estate, which will be my long term passive income. For the short term, I work on managing smaller ventures that are less passive, but still make very good income for the time put in.

JeffBox · #5 (**permalink**) 10-09-07, 03:09 PM

Hi guys,

My plan has definitely "evolved" ever since I started posting. Right now I'm in my senior year in college, and I'm not really in the hurry to become financially free like I was a few years ago. I'm more focused on the experience. That being said, I still want to become financially free relatively early in the game, although I don't have a set year. My plan (as of now anyway) is to get certified to teach English abroad after I graduate, then teach in Spain for a year to learn Spanish, and then possibly go to Hong Kong or South Korea to teach for a few years to save money.

Since I'm not really into the stock market, my plan is to either invest in real estate and/or buy a few index funds. My real estate investment analysis class uses extremely (imo) in-depth models that account for seemingly everything, and I intend on putting them to good use when the time is right.
I think index funds are a great way to get good long term gains on money without having to really track the market. I'm perfectly happy getting "average" returns to the tune of 11-12% if I spend almost no time managing the investment.
I think with the above plan I could probably be out by the time I'm 30 (I'm 21 now.) What do you guys think? Suggestions? I'm all ears.

Airelon · #6 (**permalink**) 10-10-07, 08:17 AM

I think the main thing you have going for you that I noticed from your post is the abundance of education you have for the real estate market.

When it comes to my trading as well as my investing, one of the key 'battle strategies' is that I have a well thought out plan. For every contingency.

So I definitely see it as do-able as you seem to have a great deal of knowledge accumulated in that sector, and the other key factor: patience. Not being in a hurry to be financially free.

God, to be your age again. I would have started traveling as you plan to, earlier than I did. I didn't start traveling until I was about 26.

MDZ · #7 (**permalink**) 10-10-07, 09:27 PM

Jeff, I think that you make a good point here. Now that I have been working to become financially free for a few years, I can look back and at least have something to base my reasoning off of. What I think is really important is that you enjoy life no matter what you are doing. I know some people who have become so wrapped up in the idea of being "successful" in business, that they fail at about every other aspect of their life.

For me, and I think you to, it is still important to become financially free, but we are not willing to sacrafice quality of life for that. I am willing to go without a few fancy toys for a while, but I am not willing to spend so much time working that I don't travel, or have friends, or stay close with my family. I think that this is the mistake that some people make.

Stocktrading101 · #8 (**permalink**) 11-01-07, 12:23 AM

Quote:

When this forum started, there was a lot of discussion on the topic of being financially free. What we meant when we said financially free was that the money coming from your investments covered your expenses.

I wanted to see how many of us are still aiming for that actively right now, or have achieved this goal. Feel free to share where you are at, or if you are just starting.

Right now my big big goal is to be making $3,000 a month off the my website by my 22nd birthday, or by next May. I absolutely love blogging and stocks and to do both full time is my dream job. My plan is to keep my costs low (which are right now a tad less than $1k a month) and start leveraging my extra income to invest in the stock market as I once did before things got a little sidetracked for me financially.

As I generate more revenue off my website I want to bring on others to join my team and become paid writers. By 25 it would be sweet to have a thriving website pulling like 500,000+ page impressions a month all staffed by great writers other than myself. Hopefully by that point my passive income will be greater than my monthly expenses and I can focus heavily on trading my portfolio, building the Falkin Investing Organization, and perhaps getting married or something

. That's where I am at right now.

Quote:

My plan (as of now anyway) is to get certified to teach English abroad after I graduate, then teach in Spain for a year to learn Spanish, and then possibly go to Hong Kong or South Korea to teach for a few years to save money.

Wow Jeff that is a big change up from the real estate man, nonetheless pretty cool.

Quote:

For me, and I think you to, it is still important to become financially free, but we are not willing to sacrafice quality of life for that. I am willing to go without a few fancy toys for a while, but I am not willing to spend so much time working that I don't travel, or have friends, or stay close with my family. I think that this is the mistake that some people make.

I love that comment Mark. It makes me think about those people who are wealthy but don't spend a dime and are actually more miserable now then they were before they were wealthy. To me and I bet you would agree it comes down to having that healthy balance of both.