If the goal is to have financial freedom, then it is worth the sacrifice.

I have been reading nonstop about personal finance. It has been a heck of a ride. The roller-coaster of emotions that goes along with it is not so scary when you focus purely on the numbers.

Most experts will say to save 10-20% of your income, but that still means working a 30+ career until being free. I wanted to get off the hamster wheel earlier or at least whenever I wanted instead of when only I could.

I thought wouldn’t it be great to focus on getting out of the rat race sooner. Why not just focus on a certain time period?  I picked 10 years because that is a good chunk of time for most people to get themselves in the head space to understand that discipline is in order to achieve this lofty goal.

I just narrowed down my focus to only looking for information pertaining to how to become FI in a decade.

Here is what I found along the way.

THINK 10

They say to think big. So, I say think 10.

I began to look for information on being financially free.

For instance, saving 50% of your income and getting a return of 5% or more could net you over $500,000 and allow you to become FI in 15 years. Not bad.

If your living expenses are under $40k a year, then you can make that work for you. Therefore, the more you spend, then the more you have to save. It is just that simple.

Saving 65% of your income with a return of 7% or more could net you over $600,000 and allow you to become FI in about 11 years.

Even better, saving 70% your income with a return of 7% or more could net you over $700,000 and allow you to become FI in less than 10 years. Yahtzee!

I found a savings rate early retirement chart on Clark Howard’s website. He generally decreased the number of working years by four once you hit a 40% savings rate.

TAKE YEARS OFF THE RETIREMENT SCHEDULE

After, I did my research, I also found the following:

• By saving 60% of your income, you can take 1 year and 6 months off every time you work 1 year.
• By saving 70% of your income, you can take 2 years and 4 months off every time you work 1 year.
• By saving 80% of your income, you can take 4 years off every time you work 1 year.
• By saving 90% of your income, you can take 9 years off every time you work 1 year.

This is what Jacob Lund Fisker details in his book Early Retirement Extreme.

Saving a high percentage of your income is literally allowing you to sock away years of retirement income at a faster rate.

That would mean based on the above statements, the following:

• Saving 60% of your income for 7 years, allows you to knock 11.2 years off your retirement schedule.
• Saving 70% of your income for 7 years, allows you to knock 16.8 years off your retirement schedule.
• Saving 80% of your income for 7 years, allows you to knock 28.7 years off your retirement schedule.

This would mean retiring in your 30s or 40s as opposed to your 50s or 60s. However, working is relative. If you truly have something that you enjoy doing, then it is not an issue. FI is about finding work or activities that you want to do without having to worry about punching a clock and getting paid.

WHAT IS FI?

It is the ability to make work optional.

Your assets are now generating enough cash flow for you to exit stage left out of the workforce.

I found this great chart that defines it eloquently.

HOW AND WHERE TO SAVE

Unfortunately, it is not enough just to save, but to have a target.

Most reading I have done on FI includes putting money in index funds, taxable accounts, savings, checking, and money market accounts,

For example, J.P. Livingston of TheMoneyHabit says she was saving about 70% of her income and then split that up into different categories.

Of that 70% of her income, she put 60% in savings and the remaining 40% into investing.

A place like the Vanguard Total Stock Market Index Fund (VTSMX) or EFT (VTI) should work for you just fine.

All this means that you must not only invest, but put a high portion of your income aside to actually be able to hit the eject button on your job. After all, you need income to live off of and investments typically come with rules like you are unable to withdraw any funds before age 55 to 59 ½.

I continually read about those that have retired early and reached financial independence. The common denominator is this: savings.

What can I tweak? How can I do better? I always strive for abundance. After I achieve one goal, then I make a new goal.

Once I got serious, I started socking away 41% of my income. My next move was to get to 50% of my income and eventually work my way up to a 75% savings rate.

I have also noticed that high yield savings accounts rates have gone up recently. There are accounts now paying over 2% interest. That’s right. You can earn 2% just for parking your money. The more you save; the more you earn. That is the same amount some people are receiving in annual raises and cost of living increases!

Do not let anyone tell you that this is not possible. Forget the naysayers. There is a saying that the elephant keeps walking as the dogs keep barking. Do not let fear, others opinions, or lack of effort keep you from reaching your goals.

You are the MVP on your Financial Freedom team. Go for the goal. Always.  

There is no better goal than being free.