How much do I need to invest to become financially free?

gain financial independence and retire early

Yesterday a member of the PFC community asked me whether you can invest too much. My answer to him was “can you have too much money?”. But what I THINK he meant was WHY am I investing so much? My answer to THAT is in order to become financially free! Once you have invested 25 times your annual spending, that nest egg will kick off enough growth and income so that you NEVER need to work again!

That said, I don’t really love the word “retirement”. It evokes this image of sitting on your porch with a blanket over your lap just waiting to die. I actually prefer the term “financial independence”. That means you have ultimate freedom with your time and decisions. Hate your job? Quit. Wanna start a company? Do it. Wanna volunteer and focus on your side hustle? Do it. Wanna keep working because you love it or want to have even nicer stuff? Do it!

On the FLIP side of financial independence at an early age is NEVER getting to retire. Ever see someone in their 70s pushing carts or greeting you at big box store? They’re not doing it because they love it, they’re doing it because they need the money. 65 came and went, and they weren’t magically able to cover all their bills. Social security provides a bit, but not really enough to sustain yourself. My social security projection is currently around $1,500/month. That’s nearly impossible to survive on and it certainly won’t be comfortable.

So that’s why I harp on “investing early and often”. The more you put in, the harder you push, the sooner you get there! It will save you from poverty in your later years, and might even buy you some of that sweet financial independence at a much younger age!

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

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