The road to financial independence

I moved a few steps to where Lisa sat watching the screen. She had beckoned on me to come over and feed my eyes on whatever it was she saw.

"What is it?" I asked.

"The money coming in," she answered, still staring at the screen.

"That's heartbreaking," I replied. "What will we do about our expenses? We can't have our necessities if we are earning that little." "You're right," she said. "We'll need to cut back some."

She closed the spreadsheet and opened another one. This one listed our current debts, including credit cards, student loans, car payments, etc. It was red everywhere.

"These are not good numbers," she said.

"No kidding," I replied. "But if you look at the bottom of this page, there's a section called 'Debt Consolidation.' Have you ever heard of that?"

"Yes, but we don't qualify," she said. "Our total debt is too high."

"How much higher?" I asked.

"About $50,000," she answered.

"Holy shit!" I exclaimed. "And here I thought our finances weren't bad enough already."

"Don't worry," she said. "I'm sure we can find a way to get out of this."

"You mean like bankruptcy?" I asked.

"Not exactly," she answered. "Bankruptcy would wipe out all of our assets, which include our house, our cars, and most of our savings. And we'd lose our jobs. No, we need something better than that."

"Well, I guess we should start by cutting back on some things," I said.

"Like what?" she asked.

"Let's see," I said, thinking hard. "We could stop eating out every week. We could sell the plasma TV and the big-screen television. Maybe even give up cable."

"Are you serious?" she asked. "This is your idea of cutting back?"

"Well, it's just an example," I explained. "We could do a lot more than that. What else?"

She thought for a moment. "We could cut back on gas and electric bills. We could stop buying so many DVDs and CDs. We could move closer to work and stop paying rent."

"Wow," I said. "That's a pretty good list."

"It gets worse," she added. "If we keep living like this, we'll never be able to save anything so we need to take those drastic changes."

"Okay, okay," I said. "So how does this debt consolidation thing work anyway?"

"Well, the first step is to consolidate our debts," she said. "That means taking all of our debts and putting them into one payment plan. Then we negotiate with the creditors to reduce the amount we owe. After that, we pay off the consolidated debt as quickly as possible."

"Sounds like a pain in the ass," I said.

"It will be," she agreed. "But it's the only way we can get out of this mess."

"Do you think we can do it?" I asked.

"I don't know," she said. "But we have to try. In the meantime, let's try to make some cuts."

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A few months later we made progress with our financial plans

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Source
"I've been looking at these numbers for hours," said my wife, Lisa, staring at her computer screen excitedly. "It's the best thing I've ever seen." She was referring to the spreadsheet that showed our monthly budget and projected income from a new job she had just started working on. The numbers were in green. It reflected that we would be able to pay all of our bills without dipping into savings or going into debt again.

"That's great," I said. "Now we can focus on other things."

"Like what?" she asked.

"Well, I guess we should start learning about investing," I said. "We need to put away some money for retirement and our children's college too."

"I thought we were doing that," she said. "I thought we were saving half of each paycheck."

"We are," I said. "But we need to invest some of that money now. And it doesn't hurt to learn more about it."

"Okay," she said. "Pursuing financial independence is a good idea. I think we should start reading books on investing and stock market trends."

"That sounds good," I said. "Let's go online and order some investment books."

We spent the rest of the day reading about investments and learning more about stocks.

Two months later we were still making progress. We started dabbling in the stock market, Cryptocurrency, real estate, mutual funds, and commodities. We bought a couple of used cars and sold them for a profit. We invested in gold and silver.

We learned about options trading and hedging. We learned about the importance of diversification and rebalancing. We learned about inflation and deflation. We read about the history of the Great Depression and the dotcom bubble.

We watched movies about Wall Street and the housing crash. We learned about the power of compound interest and the magic of compounding. The more we learned, the more understanding we gain. And we kept going.

A year later we were still learning. We knew more than we did before. And our money was diversified into different portfolios. We had stopped using credit cards and we paid off our mortgage early. Our spending habits had changed. We no longer bought things we didn't need. We saved almost 50% of our income and we were making steady progress toward our goals.

More years later we were still learning. We were saving 80% of our income. We had moved to a new house. We had started a family. We were making steady progress toward our goals. We were living life to the fullest. We were traveling the world. We had grandkids.

Many years later, we looked back and realized we moved from being the couple who were in debt to ones aiming to reach financial freedom. We could feel our vision coming to fulfillment and we were willing to wait for as long as it takes.