Episode 406: Financial Independence is Within Your Reach – Chapter 1 From My Book “Your Journey To Financial Freedom”

Jamila Souffrant 0:02

Working is not what most people are trying to run away from. It's working in disrespectful, oppressive environments that don't pay enough that most people want to escape. If this is your situation, it's even more crucial to be on this journey. Financial Independence is worth pursuing because of the options you'll find along the way which will help you enjoy life. T minus 10 seconds, welcome to the journey. To launch podcast with your host Jamila Souffrant as a money expert who wants her talk she helps brave journeyers like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom.

Unknown Speaker 0:44

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Jamila Souffrant 0:55

hey, hey, hey, journeyers, welcome to the journey to launch podcast. I'm your host, Jamila Souffrant, and if you are listening to this in real time, that means when the episode is actually released, then that means you're listening around Christmas. So this episode will be released on Christmas Day, 2024 or maybe you're listening to this a few weeks after, or a few days after. That means, you know, we're still in the holiday season, and you're choosing to spend time with me. I love that, and even if you're listening to this past that date, you'll get something from this episode. I hope, and I wish and I hope for you that you are experiencing love and peace and giving yourself grace on this journey to financial freedom to living your best life. Now with that, it's the holiday season, so I thought I'd give you a gift, and that gift will be chapter one of my book, Your journey to financial freedom, a step by step guide to achieving wealth and happiness. So this episode will be playing chapter one of my book. It is from the audiobook. So you'll hear me narrating chapter one, and I hope you enjoy it. You'll get it completely free, and if you want more. So if you have not picked up my book yet, whether in physical form or the audiobook, you can head over to your journey to financial freedom.com to see all the places you can buy it. You get it on Amazon, target bookshop.org, at your local bookstore, basically everywhere. Go to your local library, see that if they have it there, request it if they if they don't, but if you enjoyed chapter one, then definitely go check it out. You can still even give this as a gift to someone. It's never too late or it's never not the time of giving if you find this information useful. So with that, I hope you enjoy chapter one from my book, Your journey to financial freedom. If you want the episode show notes for this episode, go to journey, to launch.com or click the description of wherever you're listening to this episode. In the show notes, you'll get the transcribed version of the conversation, the links that we mentioned, and so much more also, whether you are an OG journeyer or brand new to the podcast, I've created a free jump start guide to help you on your financial freedom journey. It includes the top episodes to listen to, stages to go through to reach financial freedom resources and so much more you can go to journey to launch.com/jump start to get your guide right now. Okay, let's hop into the episode one, financial independence is within your reach. Imagine it's your first day at fly finance high like any school, groups are sitting together at tables based on special interests, athletics, music, robotics, club, etc. In this school, there are several tables with finance slash money groups. It's noisy, chaotic, and you're trying to find a place to sit so you're scoping out which of the groups you should join. Each table has someone encouraging you to sit with them as you walk by. One table is the basic personal finance group, and they are all about maintaining the status quo when it comes to dealing with money budget so you can pay down your debt and take vacations, improve your credit score and invest the standard 10 to 15% of your income. If you choose to sit with them, you'll do Okay, follow their rules, and you'll be able to buy a house and car, take vacations and pay down debt. Eventually, sounds like the perfect group to sit with, until you realize that the result of a standard financial plan is that you'll also have to work until the standard retirement age, between 65 and 67 years old, if you're lucky. This group keeps you locked into the work and spend cycle the dreams that you secretly buried deep within won't die quickly, but rather by a million paper cuts at the end of your. Life, you'll look back and wonder how much time you wasted by just doing enough and following the status quo with your life and finances. Then you look across the room and see another group, the elite fire table. At first they come off a bit intense and numbers focused. Their advice is that you need to invest at least 50% of your income more if you can become super frugal and give up your attachment to material things and expensive items, it's all about optimizing and maximizing your numbers so that you can reach your financial goals as quickly as possible and retire way earlier than the standard age. The trade off to achieve this accelerated path to freedom means you may have to set your lifestyle standards to below what you actually desire forever. To this group, spending as little as possible is the goal and worth any absence of luxury or comfort if it means you don't have to work again. You love the sound of this because it feels like the ultimate freedom, quitting the job you hate and retiring early, then you have more time to do the things you enjoy, like spending time with family and friends, traveling or exploring your hobbies. As you begin cutting back, you realize this life is just not sustainable. Sure, you can see living frugally for a couple years, but forever. You just can't imagine it. At the end of your life, you might look back and wonder how much you missed and regret all the things you couldn't indulge in because of these strict limitations. There are other tables in the cafeteria too, the Yolo table, which is all about living your best life today, future be damned. There's the get rich quick table where they are always coming up with a way to earn faster expenses and their financial future are not a concern, because they can always earn back what they spend. Each table offers a different way of handling your money, and with it, a different path in life. While my characterization of the basic personal finance and the elite fire tables are generalizations, that's a good overview of how each group talks about money and the trade offs you'll have to make when following their rules within personal finance, you'll often run into these two broad camps. When I first became intentional about my finances. It was like walking into this imaginary fly finance high. I knew the basic personal finance table wasn't for me because I didn't want to work forever, whether I enjoyed the job or not. For a while, I tried to hang out with the elite fire table, but realized I didn't want my life to be dictated by a strict budget. I saw a middle ground and decided to create my own table with my own rules, picking and choosing which advice worked for me depending on which season of life I was in. Dear journeyer, I invite you to join me at this table. Joining me means you won't ever have to feel stuck or without options. You don't need to be super frugal or talk about money all day to reach your goals. You can spend lavishly on things that matter and, yes, sometimes even spend recklessly within reason. Of course, without jeopardizing your financial security or future, you'll still have the option to quit your job, leave a situation, take a break from traditional work or just flat out, retire earlier than a standard age. The best part is that you can enjoy your life right from where you are today, while you embark on your journey. A Brief History of fire. I discovered fire around 2014 but the movement has been around for decades. One of the earliest books to talk about the concept of financial independence was your money or your life, transforming your relationship with money and achieving financial independence, by Joe Dominguez and Vicki Robin, originally published in 1992 your money or your life, talked about the concepts of breaking free of the cycle of work and making money just to pay off debt and bills so that you could take back control of your life. The message was well received, enough that the book made the New York Times bestseller list, and author Vicki Robin appeared on The Oprah Winfrey Show twice in 1992 and 1995 to talk about this idea of conscious spending and separating your work from your life. Over 30 years later, the message is still relevant. The fire movement re emerged in the mainstream thanks to the internet and popular blogs like Mr. Money Mustache and podcasters who began sharing their own experience. I remember when I first found the podcast mad scientist, the host Brandon interviewed various people who were pursuing fire, ranging from teachers to engineers. They shared stories of how they were saving and investing their money in the pursuit of quitting their job. Job or how they had actually accomplished fi and were now living life on their own terms, traveling the world and controlling their time. When I heard stories of what seemed to be average people with normal jobs being able to exit the traditional nine to five, I knew I had found a potential pathway to freedom for myself. The instructions seem clear, get rid of debt, spend a lot less than you make, live frugally and put as much as you can in your investment accounts, and you could be free from working for anyone else in 10 years or less. Financial independence versus financial freedom,

since the terms financial independence and financial freedom often are used interchangeably and can mean different things to different people, I want to define how I will be using them in this book. Financial Freedom for one person can mean they feel good about their ability to pay their bills on time, and for another person, it can mean they feel secure in having money in their savings accounts to cover emergencies. I define financial freedom as the ability to have options and control over how you handle your money. So being able to pay your bills, even if you have debt or having money saved for an emergency, even if you don't have millions in the bank, means you have achieved some level of financial freedom. Similarly, one person may say financial independence and mean that they don't have to depend on anyone else for money, as in, I'm financially independent from my parents. When I use the term financially independent, I mean being independent from anyone and everything, including a job. This means the money you've accumulated in your investment accounts can cover your expenses indefinitely. Think trust fund baby who was born into money and doesn't ever need to work thanks to great grandpa Joe's entrepreneurial success. But in your case, you created the trust fund for yourself. Financial independence. Fi is when you reach a level where the income generated from your investments and assets can pay for your lifestyle expenses without your needing to work. You can still choose to work and bring in money, but if you decided to not ever work again, you'd be okay financially. The key point here is that working is a choice. Financial freedom means your ability to have options and security with your money. You can experience financial freedom without being financially independent. We all have varying levels of how much we'd want to have to feel financially free or financially independent. One person may say they are financially independent once they've reached $1 million invested, and another person may feel that they need $3 million to feel financially independent. One person's financial independence is another person's financially okay. You've reached financial independence when the amount in your investment portfolios, which includes both principal and interest, and the income it generates covers all of your expenses. Your investment portfolio includes retirement accounts like 401 K, 403 B, Roth, IRA, traditional IRA, non retirement taxable accounts such as regular brokerage accounts and assets like income generating properties or cash in a bank account. If it seems impossible now, why should you even try? You might be thinking, but Jamila, I wasn't born into money. I have a lot of debt. I feel like I'm starting too late. This goal of having enough money to never have to work again. Seems impossible when I show you how to calculate your fi number in chapter eight, the number may seem too big and too far away to even attempt to pursue. I get it at first my number felt impossible too the fact that you have an idea of this number, and please remember it can change means you have something to work toward. You know the saying, shoot for the moon, and if you don't make it, you'll still land among the stars. The fi number is your moonshot. It's the audacious end goal, but if you don't reach it in the desired timeframe that you've set for yourself, you still will be in a better place than where you started, or if you never had tried. Let's say you calculated your number as $1.5 million and based on your current starting point, you assess that you can reach that number in 15 years. But 15 years later, instead of having $1.5 million you only have $1 million but is having $1 million really a failure? You are among the stars and doing better than the 49% of adults ages 55 to 66 who had no personal retirement savings in 2017 This is why I think everyone should joy. Fully strive towards this goal, because even missing the mark puts you in a better place from where you will be if you don't start. After binging on what felt like a million hours of podcasts and reading tons of blogs on the subject of financial independence, I began to tinker with our numbers on my own spreadsheet. I needed to understand how much Woody and I would need to become financially independent, and wanted to see how much time it would take for us to get there. When I first told woody about my interest in the fire movement, I could tell he was open to the idea of it, but not convinced it was achievable. He, like me, grew up seeing the adults around him work, whether they liked it or not, until they couldn't work anymore. We also had no real life examples of people who had retired successfully in the traditional way, and now here I was talking about retiring early. But unlike him, I had immersed myself in a world where impossible things like retiring early, living off $30,000 a year, and traveling the world were normal. Over the next couple of months, I continued to share interesting stories I heard with him. I was especially excited to share with him the stories I thought he could relate to, like a teacher retiring with a Million Dollar Portfolio because he is also a teacher. Eventually, after tinkering with my spreadsheet, I showed him what was actually possible for us. I had a column showing where our investments and numbers would be if we changed, nothing about our financial habits, as well as scenarios that showed how much more money we could have in the future if we adjusted our spending, saving and investing habits, the difference was staggering. On one hand, if we saved and invested the bare minimum, as we had been doing at the time, I was investing only up to my company match, and my husband was only putting 2% toward his retirement account, we'd barely be able to retire comfortably at the standard retirement age. However, if we made some changes, we would definitely be able to retire comfortably at the standard retirement age. And if we decided to become even more aggressive with our investing habits, we'd be able to hit our fi number and retire early, well before the standard retirement age. Everyone should pursue fi. The real benefit of pursuing Fi is not in the accumulation of assets and the growth of your accounts, but rather it's what you gain and who you become while you are on the pursuit, while you are on your way to fi you have to learn to enjoy and revel in the skills, confidence and resilience that transform you more than any number can. The money and economic gains will enhance your journey, but all that can and may come and go. Your accounts may fluctuate with changes in interest rates, news events and other things outside of your control, but who you become can't be diminished or taken from you. That is real power and freedom by not solely focusing on the final outcome of accumulating wealth, but also taking into account the personal growth, knowledge and emotions that come with the journey towards financial security, you can begin to find enjoyment and fulfillment in your life regardless of your current financial situation. As you work toward your goal, you'll discover many ways that achieving fi can positively impact your life. You'll gain more control over your life, and can have more options about how you want to live and work. Achieving financial independence can provide greater security and stability, both for you and your family. Financial independence can allow you to pursue your passions and interests, rather than being tied to a job or career that may not be fulfilling. Financial independence can provide the freedom to travel or live in different places. The things you'll need to do to move through the various stages of financial independence will lead to a greater sense of accomplishment and personal satisfaction, financial independence can provide peace of mind, knowing that you have the resources to handle emergencies or unexpected expenses questions you may be asking. What about the re in fire? The RE in fire stands for retire early. Oftentimes, when people first hear of the fire movement, people can get with the first part the fi but the second part seems to mess them up. Some people can't imagine a world in which they don't work and see the act of retiring early as impossible, selfish or unrealistic. If we leave off the RE part and focus on the fi part, we really get to the idea that you are working toward having enough money to sustain your life. What you choose to do after you achieve Fi is your business. Maybe you still work your corporate job because you love it. Maybe you start your own business, or maybe you literally decide to lie down on a beach and drink mojitos every day. You can either choose to indulge in the RE of the fire like purple, who was on episodes 126 and 289 of the podcast, she began her pursuit of Fi back in 2015

when she was 25 years old, and reached it at 30 years old, she was able to retire on a $500,000 investment portfolio and only spends about $20,000 a year in retirement. She doesn't actively work anymore and lives off her investment portfolio while still traveling the world and indulging in her idea of luxury. Her days are spent reading, running and doing whatever she wants. A lot of the people I've interviewed who have reached fi still continue to work and bring an income. Sometimes they are earning more money than when they were actively pursuing financial independence. They enjoy making money, but can now choose how they earn it, the decision to retire after reaching financial independence is yours to make. It doesn't matter whether you're starting this journey with the intention to quit your corporate job and start your own business. Have more options with where and how you work, or retire early and chill all day. You can't help but level up and gain the skills and knowledge that will help you improve your ability to make money, learning to create a budget that works for you, negotiating your salary, side, hustling, investing and everything else you learn along the way improve not only your financial capabilities, but also your quality of life. Do I really want to retire early, or do I just hate my job? If you really are honest with yourself about why you want to reach fire, you may discover, as I did, that it was more about leaving your current situation than not working ever again. Maybe your current work is not fulfilling. You're not making enough money. You have to sacrifice too much family time, just like your coworkers and your manager, or maybe it's all of the above, like me, you hate the idea of having to clock in or ask someone else for time off. Working is not what most people are trying to run away from. It's working in disrespectful, oppressive environments that don't pay enough that most people want to escape. If this is your situation, it's even more crucial to be on this journey. Financial Independence is worth pursuing because of the options you'll find along the way, which will help you enjoy life. LeBron James and Oprah have more than enough money to never have to work again, but they still do. They are not showing up to check off boxes, but are still competitive, creative and at the top of their fields, which challenges the idea that if you had enough money, you'd automatically want to stop working. If you find something you love, that you're good at, that challenges you and that even contributes to the world. You may never want to stop working. In fact, you may find that something inside you pushes you to work harder. Okay, fine, but what if I love my job? First of all, congratulations on finding work you love and enjoy. Not many people find that, but even if you feel valued or challenged, are compensated well, have amazing benefits and a good work life balance where you don't feel the need to sacrifice family time for your job, embarking on this journey still benefits you. All of those circumstances may not stay the same forever, and you may also change your mind about what makes you happy. What if five years down the line, you decide that you want to start a family and take off as much time as possible to be home with your children, or you decide that you want to take care of a sick family member, maybe you develop a hobby and want to spend unrestricted time exploring it more feel tired and burned out and want to take a break without an expectation to have to go back to work. If and when that happens, you will be happy you started on the path, because by then, you'll have given yourself enough runway to make a decision from a place of financial power and not dependency on working to pay the bills finance. Financial freedom at every stage of the journey, unlike financial independence, financial freedom is not about having all the money you'd ever need and never having to work again. Financial freedom is more about the options you have and the joy it allows you to experience day. Today, you don't need to have a million dollars in the bank or be completely debt free to have financial freedom. For example, financial freedom can look like your ability to pay for child care or go out to eat at your favorite restaurant without going into debt or feeling guilty that you should be doing something else with your money. You have the freedom and flexibility in how you earn and spend your money. Financial freedom is something you can experience on your way to financial independence. I know this may challenge your ideas of what financial freedom means. You may be thinking to yourself, I still can't pay for all the things I want in life and still have to work a job. I hate Tell me again how I'm financially free. Jamila, here's the thing, the levels of freedom depend on the lifestyle you want to live, and your lifestyle determines the financial threshold you'll need to achieve. But regardless of your circumstances, there is freedom at every level, because you have access to something that you otherwise wouldn't have had, for example, you can experience more financial freedom even if you still have debt. If you have figured out a way to manage your current debt and have a sustainable plan to pay it off without going into more debt, the sense of control you have will give you some peace of mind, as opposed to not having a plan and not feeling like you have any control over your finances, having financial hope and financial optimism is also a form of financial freedom. In order to achieve complete financial independence, but experience financial freedom along the way, you'll need to become financially fluid, allowing yourself to be flexible in how you deal with life as it happens. Okay, journeyers, I hope you enjoy chapter one from my book, Your journey to financial freedom. You can head over to your journey to financial freedom.com to see where you can get the book. And so you can pick up the physical book. You can get the audio book if you'd like, and to find out more information. All right, until next time, keep on journeying. Journeyers. Don't forget. You can get the episode show notes for this episode by going to journey to launch.com or click the description of wherever you're listening to this and you can still grab your jump start guide for free to help you on your journey to financial freedom by going to journey to launch.com/jump start. If you want to support me and the podcast and love the free content and information that you get here, here are four ways that you can support me in the show. One, make sure you're subscribed to the podcast wherever you listen, whether that's Apple podcast, that purple app on your phone, your Android device, YouTube, Spotify, wherever it is that you happen to listen, just subscribe so you are not missing an episode. And if you're happening to listen to this in Apple podcast, rate review and subscribe there. I appreciate and read every single review. Number two, follow me on my social media accounts. I'm at journey to launch on Facebook, Instagram and Twitter. And I love, love, love interacting with journeyers there three, support and check out the sponsors of this show. If you hear something that interests you. Sponsors are the main ways we keep the podcast lights on here. So show them some love for supporting your girl. Four, and last but not least, share this episode, this podcast, with a friend or family member or co worker so that we can spread the message of Journey to launch. All right, that's it until next week. Keep on journeying. Journeyers. You

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