Make them work for you

With the urbanization, gentrification and economic polarization of modern society, that the developed world is experiencing currently, it is getting increasingly normal to talk about “an elite” that supposedly controls everything and isolates itself from the rest of the common folk.

I don’t know if this phenomenon of an elite is anything particularly new in human history. However, it is clear that the wealth is now getting more concentrated in fewer rich people, and that the western middle-class is getting smaller.

You hear in the media that a lot of people is feeling disenfranchised due to this dynamic, and much of the successful election campaign of Donald Trump was build on this platform.

With this post, I am not going to make any political statement about the matter, but rather highlight how most people can feel like the come out on the winning side of this power struggle with a very simple strategy.

For more than a year now, I have promulgated the minimalist lifestyle as well as the concept of early retirement on this blog, and a funny side effect of this has been a change in my attitude towards the issue mentioned above.

I feel like a winner in the most widespread social battle of our time, and I am not even breaking a sweat in the meantime.

 

My solution

I lead a very simplistic lifestyle, spend my money only on the stuff that matters (which isn’t many things), work in a very low-stress position for a maximum of 30 hours a week, save most of my paycheck and invest it in stocks.

The last part is important.

People tend to forget, what actually happens when we buy stocks in a company: we become the owner – the ultimate CEO!

It is very easy to buy a stock, it requires almost nothing of you and anybody with half-a-decent salary is able to do it.

A guy working in Walmart can become the partial owner of Apple (not a stock recommendation) after a handful of paychecks, and suddenly Tim Cook is working for him!

I often think about how all of the phd’s and master degrees among my fellow citizens are stressing themselves out to give me a return on my investment. I’m not doing anything, I am just giving them 100 bucks, and let them figure out how to give me 105 or 110 back a year later.

They are sweating, I am not, and they are supposed to be the smartest people in the country ?

With a little frugality and minimalism, you too can become the true master of the corporate world in whatever country you live in, and take pleasure from the thought of how the most ambitious people are now working for you. If they are the elite, while working for you, I don’t know what that makes you!

My first year of working on early retirement: how is it going?

It has now been almost exactly a year since I discovered the early retirement community on the internet when I was immediately hooked.

I found that early retirement was the next logical step to pursue, for a minimalist who seldomly has found a job that he truly enjoyed.

Early retirement is not something I aim for because I dream about laying on the couch all day. It is something I fantasize about because there are many things I want to do in life, that won’t necessarily earn me any money, and so I just need a lot of time.

If there is anything you want to accomplish in life, you must track your own progress, in order to stay on course and fully optimize for success.

So as you might have read about in an earlier post , I keep track of my overall progress in a spreadsheet, on how far I have come in my journey to financial independence.

The basic idea is that I calculate how much of monthly expenses can be covered by the passive income I generate, and so I can either cut back on expenses or generate more passive income to make progress on this goal.

Currently, I only have 2 passive sources of income:

  1. I put aside money every month, and invest them in either stocks, mutual funds or index funds. The basic assumption in almost all early retirement plans is that you should be able to withdraw 4% of your total investment every year and still leave room for continual growth of your nest egg.
  2. Income from this and other blogs, which is comprised of Google Adsense ads and Amazon affiliate links.

At the moment, the majority of my passive income stems from the investments, but as I see and up-trending tendency in my blog income, I hope this might not be the case within the next few years.

 

Getting to the point

So as you can see in the graph below, I have been able to generate enough passive income recently, that it corresponds to about 7% of my total expenses.

skaermbillede-2017-01-10-kl-07-25-55

(The only setback that is visible in the graph, is explained by me cashing out some of my investments, in preparation for quitting my job in the fall of 2016)

This might not seem like a lot, but then again, this actually means that I am retired 2 days out of every month, which is a little uplifting to think about ?

Where do we go from here

It is important to understand, that I don’t actually take these 2 days off every month, and I don’t withdraw the 4% from the investments every year (yet), which means all of my passive income gets reinvested.

This way, I should see even faster and faster progress every month from here on out, which should result in a more exponentially shaped continuation of the graph above – especially if stock prices keeps going up.

One of my goals for 2017 is to make that graph reach 20% by December, and I will, of course, keep you updated on whether I reach this goal or not.

This first year of working on this goal has made me optimistic about the possibility of reaching retirement within 10 years (max) from when I began, which means I should be able to leave the rat race once I get to the age of 37. Let’s see 🙂