I don’t think it can be emphasized enough the need for an actual “plan”. I think the reason so many fail at this is that they rush into it, trying for major wholesale changes in their lives, and it just doesn’t seem to work that way most of the time.

Very well put.

#1) Semi-complete: Although I still live in my mother’s basement (insert Trekkie joke here), I am paying rent, and thus have one foot out the door (at least as far as being able to transition my expenses from my current living condition to living on my own.)

#2) On hold (for now): My only outstanding debt is my student loan. However, as I refinanced it a few years ago and locked in a VERY low rate, I’m in no rush to pay it off; why worry about a loan at 3% when I could be earning 9% or so in a good stock fund AND watching the real value of my debt shrink as a result of inflation?

On the other hand, as implied above, I don’t have a mortgage yet, and that will easily be another $100k-$200k debt to deal with, so even my optimistic assumptions have a time frame of a decade or more for complete debt freedom.

2.5) I do have about 3 months of living expenses saved up currently, a reasonable amount (I think) for someone with no dependents, a solid career, and no expensive debt.

3) Just getting started: My investments are rather meager, so far, but with my recent attempts to become more money conscious and start to save/invest, I should be able to get a good start on this soon.

At the same time, I’m continually working on pursuing step #3. Developing sources of residual income can help to accelerate all of the Financial Freedom goals. Also, it can be the most exciting goal to pursue.

Why?

Things hit the fan with his previous career. During the gravy years, he’d paid extra on the premium. Then he found himself out of a job and starting a new career. And… after more bad luck… they found themselves in danger of foreclosure.

His discovery? The bank will foreclose on the whole house, whether you owe $3 or $300,000 on it. And since the money paid on the premium is not liquid, there was nothing there to tap in an emergency. And since it was in danger of foreclosure, there was no getting a HELOC or anything. Basically, you are hosed.

Fortunately, they worked out a deal with a friend of mine who was hunting for a house in the area. So the foreclosure never went through, though it was a black mark on their record when they went shopping for another house. They were able to walk away with some of their equity.

So now I no longer make paying off the house my top priority, as nice as it would be to have the security of having it paid for – we’ve got a low interest rate on our mortgage, which I can easily exceed in investments (well, most of the time…).

Step 3 isn’t even a dream for me yet. I’m very happy to be doing what I do in life and I just can’t imagine a day where I don’t have a job to do. So when people start talking about “financial Freedom” I stop listening. Thanks for bringing it down to a level that I can grok :)

As for reaching a stage of independence from work, that won’t be an option for me until my mid-60s. Fortunately, I thoroughly enjoy my career choice.

It is definitely a goal worth striving for. While there are better and worse ways to go about it, there are no reliable shortcuts. It’s all about nuking your consumer debt, living within your means, working hard, learning all you can, and building up your assets.

I am not sure if it is because of the shift of income or the upcoming birthday but you remind me of myself when I was your age. Different situations, yes, but similar mindset.

It is almost as if you are going from a frugal mindset to a strategic mindset.

As for financial independence, it is a common word with multiple meanings depending on individuals. I, myself, no longer have any debt (only debt I have is less than 1K which will be paid off in three months), a growing net worth, and a slight improvement in passive income if not enough to be financially free.

But I am not sure what it really means to me, it seems to me that it means being able to do what I want without the requirements of certain income stream. Example, full-time job requires 40 hours a week.

Keep up the good work.

The 10 year time frame is really accelerated, and will take a lot of hard work, and some luck. The 20 year time frame is much more doable, barring life change or disaster.