HOW I DEFINE FINANCIAL INDEPENDENCE: JON’S PERSPECTIVE FROM MONEYSMARTGUIDES

HOW I DEFINE FINANCIAL INDEPENDENCE: JON'S PERSPECTIVE FROM MONEYSMARTGUIDES

Good morning! Today, I’m excited to introduce Jon from MoneySmartGuides, who will be sharing his thoughts on financial independence and jokingly suggesting he might join me under the sunny skies of Guatemala. If you’re interested in guest posting on RFI, just let me know!

You can also catch me today on Stacking Benjamins, where I’m discussing the importance of having a financial plan, and on Club Thrifty, talking about making money while working from home. Additionally, Jessica Larrew is featured on Make Money Your Way, sharing how she earned over $100,000 on Amazon last year. It’s certainly a busy day!

When I was a kid, I believed financial independence meant owning a massive mansion, luxury cars, and a lot of other things. I can’t remember exactly what these “things” were, and I probably didn’t know back then either—I just knew I wanted a lot of stuff because I equated that with being wealthy. Ironically, I also wanted to be a garbage man, which now makes me chuckle. Come to think of it, having the right mindset in that job might not be so bad. After all, we often throw away perfectly good items, proving that “one man’s trash is another man’s treasure.”

Post-College Debt

After graduating from college, I thought I had everything figured out. I expected to land a high-paying job, buy my mansion and cars, and become a CEO before turning 30. In reality, the only job offer I received had a starting salary of $27,500. Although it wasn’t what I hoped for, I didn’t worry and continued living well—too well, actually. This led to a significant amount of credit card debt.

I found myself buying things just to feel good about not meeting my own expectations. The temporary high from a purchase would fade, and I’d buy something else to replace it, quickly maxing out two credit cards. Finally, I decided enough was enough and opened a third card with 0% interest on balance transfers, hoping to manage my debt better. But after transferring the balance, my spending habits continued, prompting a realization.

My Big Realization

As I started controlling my spending and paying off my debt, I discovered what truly made me happy: spending time with friends and family and engaging in activities I enjoy. Material things didn’t bring me happiness; people and experiences did. I knew I needed a plan to make the most of my time with loved ones.

My Plan

To enjoy these experiences, I needed money, but I didn’t want to spend 40 years stuck at a desk to earn it. So, I diversified my income. Just as diversifying investments reduces risk and potentially increases rewards, diversifying income does the same.

My primary job still provides the majority of my income, but I also invest in the stock market, run three income-generating blogs, and engage in smaller activities like selling items on eBay and Craigslist, taking surveys, and selling scrap metal. While these smaller ventures don’t generate significant revenue, every bit of income I earn gets invested to grow and compound over time.

Final Thoughts

Reflecting on my past, I realize my younger self didn’t truly want financial independence; he just wanted to be rich, like Scrooge McDuck rich. But I’ve learned that being rich doesn’t necessarily mean you’re financially independent, and vice versa.

There’s a saying I love: “It costs a ton of money to live like a king for a day, but you can live like a prince forever on much less.” This resonates with me because it highlights how you can either have it all for a short time or live well for a long time.

If you take away anything from this post, I hope it’s a combination of these three points:

1. Understand the True Cost of Things: It’s not just about the purchase price but the ongoing costs over time that really add up. Often, we overlook these additional expenses.

2. Earn Money Doing What You Love: I enjoy my job but love blogging. The fact that I make money from blogging is still amazing to me. It’s hard work but doesn’t feel like work because I enjoy it so much. Think about what you love and see if there’s a way to earn income from it.

3. Continual Learning and Growth: Before discovering this blog, I thought I’d need much more money to be financially independent. Learning about life in Guatemala has shown me that financial independence can be more achievable than I thought. When we learn and grow, we become better people.

Jon writes for MoneySmartGuides, a personal finance blog that educates people on managing their finances to achieve their dreams. He focuses mainly on investing and paying off debt, two of the most challenging financial topics.

This post was featured on Money Smart Guides and KNS Financial. Thank you!