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Financial Independence

I am currently seeking my financial independence in a near future, in this blog I will share everything I learn and my experiences.
— Alisson.

Financial independence typically means having enough income to pay your living expenses for the rest of your life without having to work full time. Years ago I started it, but then I moved to another country, looking for improve my carrear and I put this goal aside for a while, now I am 100% focused in it.

In here I will share all the positive and negative experiences, and share all material I am using to learn how to achieve my financial independence. I’m just getting this new blog going, so stay tuned for more. Subscribe below to get notified when I post new updates.

Sacrifices to Achieve Success

Sacrifice laziness

If you do not sacrifice your laziness you will keep postponing from today to tomorrow, start today!

Sacrificing dependence

If you do not sacrifice your dependence, your life will never be in your hands.

Sacrifice inconsistency

Be consistent, if you are not, your potential will be wasted.

Sacrifice perfectionism

You don’t need to be perfect, start to do what you want, or you will be always waiting the best moment.

Sacrifice the need to please everyone

If you try to please everyone, you will be always in a toxic environment.

Sacrifice inflexibility

If you do not sacrifice the inflexibility, the world will leave you behind.

Sacrifice balance

If you do not sacrifice the balance, your results will never be good enough.

Without sacrifice there is no victory

I’d like to recommend a book that I already recommended here: Think and Grow Rich. Have a great time!

Rules of money

Money is a path

Money is a path, not an end. The money is for you to realize things, not happiness, you can buy education, health, traveling, money isn’t an end, money is not a cause, it is a consequence. Usually the people who has more money is the people who work the most.

Do not lose money

It is the rule of money for Warren Buffett, the other rule is to do not forget the first. It is impossible never to lose money, the concept is simple. People interpret the phrase wrong: it is not that you should never make mistakes, it is that you should lose as little as possible. Imagine that you have 100 ,00 USD and lose 50, you have lost 50% of your assets. To reach 100 again, you need to earn 50, which means earning 100% of your money. This does not mean that you must contribute everything in fixed income, but it does mean that you manage your risks.

Greed, fear and impatience generate losses

Careful where you invest, sometimes big growth could be related to frauds, sometimes people invest without knowing what is happening, inform your self, read the news and try to understand why the company is growing.

Income – Investment = Expenses

As I have said in my previous post. Pay your self first! Consider your investment as a bill you have to pay every month. If you do not invest, pay yourself some months, you will miss that in the future. Invest before and the you spend, do not spend and the invest.

Money is not the root of all evil

Knowing how to use this power for good (and to earn money from your own money, making him your servant), is the right way to deal with money. Lots of people don’t like people just because they are rich, people believe that for instance a poor person will be corrupted if they get money, actually, when the person get this money, they gain also power and they will do what they always want to do.

Do not use money that you don’t have

It is obvious, looks obvious and people don’t do it. Do not anticipate your dream, do not buy a car, a travel, a phone using credit, this rule is simple, if you don’t have, don’t use. It is about the fees that you need to pay, it is about the future that you give up, if you want financial freedom. Spend well!

Harvesting Rule

To harvest anything, first you need to plant. Lot’s of people wants the opposite, first you have to plant to harvest in the future, in a diet you won’t eat to get slimmer, you have to plant some effort everyday. Who plants nothing, won’t harvest anything.

Start now

Imagine two people, 1 and 2. The first one starts to invest when he is 19 years old and stops at 26 (7 years), and the person 2 starts from 26 till 65 years old (39 years). The same amount of money. If both have the same grow rate (for instance, 10%), who has more money?

Firstly, the who invest more was the person 2. He saved for much more years, but the person 1 had more compound interest for more time.

Starts as soon as possible!

Focus on contributions

Maintaining discipline and continuing to contribute gives much more return.Initially investing 1000, and 100 monthly, for 36 months at a rate of 10% per year, the contributions will represent around 65% of the final result. Do not excuse that you don’t have money now, start to invest as much as you can, as early as possible and keep doing it.

The future in uncertain – Be prepared

The future is uncertain. There is no point in wanting to predict the future, wanting to hit the butt when the next crisis is coming, etc. The game is not to predict when the uncertainty arrives, but to be prepared for when it arrives. I have posted before that I keep a bit of my money in a low interest account but with high liquidity, when I see some opportunity or crash, I still have money to invest more.

Most of the people who has money know this and try to be prepared for the future, and most of the people starting now believes that they can predict the future.

Saving on coffee doesn’t make you rich

Saving on stupid spending is stupid. You will not be rich saving all the coffees of your life. You need 3 things: win more, spend well and invest better. For instance, imagine if you go to a market very far that is much cheaper, it can make sense to make your shops there, but how long you spend to go there? 5 hours? Maybe those 5 hours can be use to something more important, how much is your hour?

Buy assets

People buy liabilities thinking they are assets. They don’t try to make the money to work for them – they just want to save it until they get entry to something. Money does not work when all you do with it is to acquire liabilities. Invest!

Here you can get audible book gifts. Study and learn!!

5 tips – How to save money

Income – Investment = Expenses

It is not Income – Expenses = Investment, what mostly do. Pay your self first, if you invest first you can’t spend what you already invested.

Buy tomorrow

Exactly after buy something you loose the wish to be with that thing all the time, try to buy it tomorrow, then after-tomorrow, after a while, maybe you will think that you really don’t need the item. Try at least to sleep before take the decision.

Buy because you need it

You buy something only because or you desire the item or you need it. Try to make a process when you are going to buy something, do you nee it? is it expensive? do I have money to buy it now? Maybe you will realize that you don’t need it, it was just a desire.

Check the promotions and spend well

When you go to the supermarket, you buy only one item? Maybe you can buy the bigger one and it will be cheaper! Spend less is different of spend well, for instance you can buy a LED lamp for you room, a LED lamp is much more expensive, but you will save much more energy!

Check how much you need to work to pay what you want to buy

First, remember, you pay taxes, big part of your salary already goes there. Where I am from, Brazil, 1/3 or your year is to pay taxes. Imagine that now you have just 2/3 of the year that is actually your money. You still have to pay your own cost and expenses. Hoe much days are left for you that are actually yours? Will you work forever to pay an iPhone? Check well how much you are paying per hour and how much time of your year you need to work to pay this item.

To finish I’d like to recommend a book: Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, by T. Harv Eker.

How to create a investment plan

I will start this post referring a book, first of all, you need to invest in education first, so the book The Intelligent Investor: The Definitive Book on Value Investing , by Benjamin Graham would be a great acquisition. Shortly, the greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Step 1 – Assess Your Current Situation

Define your current situation, you need to track down your expenses and pay yourself, check how much money you can invest. Make a budget plan to evaluate your monthly situation, if it is too hard for you to make a plan, start to track your expenses, like that you will know how much you use for food, transportation, and so on. After have a budget plan, you can know how much you can actually afford to invest.

It is important to know how accessible you need your investments to be, it means, how liquid. Then you can have an idea if you want to invest in real state or stocks. Own a house or a shopping mall, may be difficult to sell if you need the money fast, so if you have doubts here, you can ask for some finance advisor to help you.

Step 2 – Define your goals

Specific your goal, for me, my goal is to retire with a good income from safe investments (low risk, low gains), on the way you can take some risks as younger you are. As you can see in my previous post, there is a basic simple rule that you need 300x of what you want. If you want 5 thousand dollars, you need 1.500.000,00 dollars. With that in mind, you can use some calculators, there are few online, to have some idea for how long you need to save or how much, you can play with the numbers a bit.

For me the important points are: growth, risk and liquidity. As you defined before, you need to know how much you need to grow per month or year, some months may not be too good and others could. Stick to the plan. Careful with high risk investments, and diversify your portfolio, risk investment also has higher gains, if you are looking to build wealth over the years you may want to choose a safer investment path.

Step four – Decide what to invest in

The final step is obviously decide where to invest, there are many different accounts you can use. It may change accordingly with your risk/growth/liquidity ideals. I have written a bit in my previous post about it, first of all, create an emergency wallet in case of emergencies. Consider split your wallet in different areas, stocks, cross-country investments, forex, 401(k), something safe as well with high liquidity, bank saving accounts, and so on. One thing that I’d recommend is to have 20% or 25% of all your money in a saving account with high liquidity, may be not the best current option now, but in a crisis (it always come) you will have cash when no one else will and you will buy everything cheap.

Another point that is very important for me, diversify your areas, if you are invest 100% in tech, imagine if something happen in the sector, go also for food/beverage business, split your wallet, it helps you to avoid big crashes. It is very important to make money is do not loose it. It is hard to recover from a crash.

Step 5 – Monitor your investments

Keep track of your investment is VERY important, it helps you too have a big picture of what is happening, how you are performing, and it can help you to predict the future. Keep in mind if you are doing a great year, like 100% a year it is great, but it doesn’t mean that next few years you can keep in this rate, keep your keep your feet on the ground, research why and how, listen others opinions, they may help you with different point of view, keep diversifying your wallet if you could double in a year, it will avoid that you can loose it all if you invest everything only in one thing.

Shortly:

Start sooner as possible;
Research and learn from successful people, books…;
Diversify!

Make a plan to save and invest!

Dear investor, financial independence means to enough income to pay living expenses for the rest of your life without having to be employed or dependent on others.

Let’s see monthly numbers, lets study 2 cases, the first case you can get only 4% a year in return from your investment, and the second case you can get 10% from it. To help the math, if you need 1.000,00 USD monthly:

First case, 4% a year:

It means approximately 0.33% per month. If you need 1.000 USD a month, you need 300.100,00 USD (300.300*0.0033 = 1000,33)

In the second case, 10% a year:

It means approximately 0.83% per month. If you need 1.000 USD a month, you need 120.000 USD (120.000*0.0083 = 999,6)

A simple rule is that you need 300x what you need per month. For instance, to get this thousand dollars, you need 300 thousand. If you want 5 thousand a month, you need to save 1.500.000,00 dollars (4% a year, you get approximately 5000 dollars a month.)

Again, be aware about how can you withdraw this money, maybe you can withdraw monthly in your bank, maybe just yearly. There are few important points I’d like to explain before start to save:

Pay your debts

Lot’s of people already has some kind of debt, mortgages, credit card, car loans, student loans. They have some weight in your budget, month after month you need to pay interest on it and you don’t get anything in return. Paying your debts free your money and as sooner you finish, sooner you can invest more for you.

Cut expenses

As much more you cut in the beginning, more will you save and faster you will achieve the amount you want. Cut expenses is easier than get a raise and there is a lot of ways to save, Basic points where you can save it:

Housing

Find a house where the cost is low! You don’t need the biggest house if you want to save for the future. Rent it, only if it is cheaper than buy it. Try to free your budget as much as you can and feel comfortable with.

Transportation

Why don’t you try to live in a area in the city that you need a car? That is the best, a car is a big liability, you have lot of costs in it, constantly. Look for another alternatives like bike or public transportation, or maybe keep your old car as much as you can.

Food

You can save a little more here, you can cook at home instead of eat out every meal, you don’t need to buy the most expensive brands and create a tracking sheet, then you know where you are spending the most, if you are exceeding in the current month, maybe you have to take it easier and eat more “cheap” meals until the end of the month. Tracking is very important. Tracking your expenses, tracking your gains, as much as you track the best, you will have the control of it.

Shopping

Only buy a new item if you truly need it, keep your thing until they wear out and maintain as long as possible, then you don’t need to buy new ones. There are also some second hand shops that you can buy much cheaper than new items in the shop, nowadays you also have some tools to find the best price of an item and also marketplace in different social networks.

Entertainment

Instead of go to a luxury vacation, you can plan a cheaper trip, staying gin hostels, buying cheap flights in low cost companies. You can replace any expensive cable TV for a Netflix, Amazon Prime, and so on.

Maximize your income

The extra money you can bring and invest makes a big difference in the future, as much as you can start to save and invest, the best! Here are some ideas:

In your main job you can try to get some additional shifts, make some extra hours. If your salary is fixed, ask your boss a raise, try to discover the best way to get a promotion.
If you don’t get enough in your first and main job, you can try to find another one, as a barman, waiter, dog walk, freelancer and so on. Remember, any extra money you can invest, is the best. Try to do something fun here, using some hobby or something you enjoy doing.
Sell your belongings! For sure you have things around your place that you don’t use, maybe you have an instrument that you don’t play in a while, tons of clothes, some small items, furniture barely used.
Try to keep some extra income always flowing to your pockets. Opening a website, a store, as much more you work, more you will have in the future.

Invest

Your gains will be exponential, you can read a bit more here. As soon you start the best. Find some calculator in google, fill your initial savings, interest, monthly deposit and for how many years you want to save. As sooner you start, the sooner you will get there.

Very important thing: Make a savings account for emergency, an account that you can withdraw any moment, fast! Maybe enough to live for 6 months, maybe 3 months if you have a stable. job You can add some cash to this emergency savings and save it together, I mean plus 10%, maybe 25% of all your money. Then you can invest when you see some opportunity, you wont get rich with this money, this is not your big investment but it is very important to have. You can put this money in something safe (low gains) and high liquidity. For sure you need this money in an emergency, in a crisis, maybe even to invest more in a crisis period, when you will get everything cheap. Another post will explain how to split your wallet.

Talking about investments, invest safely, diversify your wallet, market area, make it simple, for sure your bank has some offers to you. Remember do diversify your wallet, if you put all your money in only one place, it would be awesome if this thing grows a lot, but you are exposing your self to failure. Split and diversify. If you buy stocks from 4 different companies, maybe you need only one them to skyrocket, and the others can fail and you will still achieve your goals.

Try to diversify between companies, areas and country. If the currency from that country fails, you will fail together. One more point would be to ALWAYS have money, for emergency and for future investment. Imagine if the company that you always want and believe breaks, or if there is a crises in the world. You will still have money to buy everything cheap when everybody else is desperate.

Frequently balance your investments to do not have all your money only in one place. And last of all, TRACK YOUR PROGRESS AND EXPENSES! That was the key for me, without tracking you are not sure how you are doing. I’d recommend a book I read a book that speaks a little about it and I’d recommend it here in the end of this post. I hope you all liked it. 🙂

The book is “Willpower: Rediscovering the Greatest Human Strength Book by John Tierney and Roy Baumeister“, I’d buy it right away and read it, here is a link.

“Summary – Think and Grow Rich, by Napoleon Hill”

Link to buy the book- Think and Grow Rich, by Napoleon Hill.

This book isn’t only about how to increase your income and become rich. This book is about personal development and self-improvement. The author’s philosophy is to help to attract success in their life, but it’s definitely a must-read for investors and entrepreneurs. Napoleon Hill’s interviews and research culmunated in this bestseller, “Think and Grow Rich”, what summarizes how to make money in 13 principles:

Desire

You need to want it. There is an expression, grit, I believe it summarizes it: Grit is a positive, non-cognitive trait based on an individual’s perseverance of effort combined with the passion for a particular long-term goal or end state (a powerful motivation to achieve an objective).

Faith

Believe you can achieve your goal. Do a good mindset, believe you can do it. He writes: “Riches begin in the form of thought! The amount is limited only by the person in whose mind the thought is put into motion. Faith removes limitations!”

Auto-Suggestion

Use affirmations to reach your goal. Hill explains that your ability to use the principle of auto-suggestion will depend, very largely, upon your capacity to concentrate upon a given desire until that desire becomes a burning obsession. Repeat every day that you will invest your money, pay a part of your money to yourself.

Specialized knowledge

Knowledge is power, Hills explain that successful men, never stops acquiring knowledge related to their major purpose, business, or profession. Those who are not successful usually make the mistake of believing that the knowledge-acquiring period ends when one finishes school.

Imagination

Come up with ideas and visualize your success. Ideas are the beginning points of all fortunes, Ideas are products of the imagination…

Organized planning

Take action! Hills explains: Most of us are good “starters” but poor “finishers” of everything we begin. Moreover, people are prone to give up at the first signs of defeat. There is no substitute for persistence. To achieve financial independence, you need persistence in a long term! Make a plan and stick to it, in the beginning of every month you will know where your money goes.

Decision

That a key trait that Hill recognized in all of the people he studied, all of them. He says: “People who fail to accumulate money, without exception, have the habit of reaching decisions, if at all, very slowly, and of changing these decisions quickly and often.” And any leader needs to be good at it.

Persistence

Persistence is vital! You are looking for a long term achievement, it will not come fast. You need a plan and you need to stick to it. For instance, I save 25% of all my income and I reinvest it. According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings. As much more you save, faster it will be.

Power of the mind

Surround your self with the best! Hill writes: A group of brains coordinated (or connected) in a spirit of harmony will provide more thought-energy than a single brain, just as a group of electric batteries will provide more energy than a single battery.

When it comes to relationships, we are greatly influenced — whether we like it or not — by those closest to us. It affects our way of thinking, our self-esteem, and our decisions. Of course, everyone is their own person, but research has shown that we’re more affected by our environment than we think.

The mystery of sex transmutation

Choose a compatible partner. Hill writes: Love, romance, and sex are all emotions capable of driving men to heights of super achievement. When combined, these three emotions may lift one to an altitude of genius. Clearly your partner have help you, support, give ideas, help to save, and so on. For instance, Research also shows that having a conscientious spouse can boost your salary by $4,000 a year.

The subconscious mind

Master positivity and dismiss negative emotions. If you want it, you have to put this thought in your subconscious mind, Hill writes: The subconscious mind will not remain idle! If you fail to plant desires in your subconscious mind, it will feed upon the thoughts which reach it as the result of your neglect. Positive and negative emotions cannot occupy the mind at the same time. One or the other must dominate. It is your responsibility to make sure that positive emotions constitute the dominating influence of your mind. Think positively.

The brain

Associate with other smart people and learn from them. Hill writes: Every human brain is capable of picking up vibrations of thought which are being released by other brains …

It is not only surround yourself with people who are smarter and better, but use the members of your group to find solutions to problems.

The sixth sense

Trust your gut! Hill says: “Through the aid of the sixth sense, you will be warned of impending dangers in time to avoid them, and notified of opportunities in time to embrace them.”

And he completes: No matter who you are, or what may have been your purpose in reading this book, you can profit by it without understanding the principle described in this chapter. This is especially true if your major purpose is that of accumulation of money or other material things.

I believe this book is a must read for everyone here!

If you are looking for this book, here is a link to buy it in amazon: link

I am Alisson, looking for my financial independence.

Hello guys, I am Alisson, a Brazilian living abroad. Through my life, few times I thought about this goal, some times I started and stopped for different reasons, such as changing jobs, change my goals, changing the country I was living, and so on. To achieve this “financial independence” you need focus in a long term, I am speaking about years, I this journey you don’t need to save all the money you can, you can still enjoy your life, but you need to save a good percentage of your income. I would say 20% or 25% of it. I will show in future posts few rules and math to show how can you make it, when will you make it. Not only about to save, but also about to invest, how to invest based in previous experiences, not mine, I am just starting, but from successful people. I will show their path, what made them successful? What did they do? What can we learn from them?

Unfortunately I haven’t achieve it yet, I’d love to come here and share all I have done toit, but we can learn together, I believe I am in a good path, but I have to be humble, I have’t pass any crisis yet. Here I will show some ideas about how to pass by it, not learned by me, but form others who have achieved it.

Why am I looking for this independence?

I have seen how people struggle, not only in Brazil but in other countries too, and probably I created some fear to this struggle in the future, I have seen that in my family. I’d like to have always money come in, even if I do not work, and explain all of this to my wife, she believe that I’d like to be home all day playing videogame and playing with our dog, but the reality is much different. I am sure I have to work much, much more than ever before. Always be tuned to investment and business, laws, banks, fees, networking, and so on.
Another reason is that I don’t want to work for somebody forever, I want to work for my self, doing what I love and what I want, when I want.

There is a book I’d love to recommend you all to read and also this author, Napoleon Hill.

I will speak about both of them in the next post. Here you can find a link for both of the books I want to speak about at first:

Next post will be a summary of those books listed above.