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Steps For Financial Independence On Independence Day! – Finger Financial Five #89

“May we think of freedom, not as the right to do as we please, but as the opportunity to do what is right.” – Peter Marshall

This is the week of independence for the United States of America. 

Why did our Founding Fathers want independence?

To have freedom of choice and freedom from oppression.   

This is the same with financial independence, except we don’t have to risk our life to achieve it. Actually, we may get our life back.

Simply put, financial independence is reducing oppression and increasing freedom

For example:

  • Reduce future financial obligations (ex. don’t take on unnecessary debt and/or try to “keep up with the Jones’”).
  • Increase the future financial flexibility (ex. save 20% of earned income)
  • Reduce some things in your work life you don’t like. For me, no paperwork!
  • Increase the time spent on work you do like (ex. outsource certain tasks or even change jobs) 
  • Reduce things in your social life you don’t like.  Is there something you find draining that brings no value to yourself or others?
  • Increase the parts of your social life that give you energy.
  • Reduce things in your home life you don’t like (ex. house work, yard work  … for me, it’s never changing another sprinkler head!)
  • Increase time spent on meaningful tasks at home (ex. reading, exercise, spending time with spouse, etc.) 

Case study:

I have a client who bought a boat recently. He thought of waiting a few more years when maybe boat prices will come down, but his children would miss out on three summers of boat time. He chose freedom and bought the boat. 

Wait, didn’t he create some future financial oppression by taking on more debt?

Yup. Nothing is free.  Not even freedom. Everything has a price.

Find your balance. 

Have a plan.  The fellow (mentioned above) who bought the boat has a plan: he saves 20% of his earnings per year.

Oh, making good choices isn’t all math.

Knowing what your true self wants is a key. True self?  Your true self can be found if you keep asking why until you get to the very root of your desire. 

Diana Chapman on the podcast the Knowledge Project talks about when she needs to make a choice, she looks for a “whole body yes.” 

This is when your head, your heart and your gut all say yes. If all three don’t agree, the answer is no. 

Stock valuations are getting back toward historical averages. This could be an opportunity for patient investors.

The Fed has ramped up its fight against inflation, stating that “the [Federal Open Market Committee] is strongly committed to returning inflation to its 2 percent objective” and “the Committee is highly attentive to inflation risks.” While the Fed cannot directly solve the supply problems across a variety of industries, raising rates and tightening financial conditions can prevent runaway inflation by softening demand.

This is why the Fed has accelerated its pace of rate hikes with the May increase reaching 75 basis points (three-quarters of a percent), the largest in 28 years. The market expects similar rate hikes throughout the remainder of the year with the fed funds rate hitting about 3.5% by year end.

Inflation erodes the value of cash. Keep enough for your cash buffer and emergencies.

While bear markets are challenging, investors ought to view the current period with perspective. If inflation begins to ease, optimism may return to the market and economy. Taking advantage of the current market by staying invested and diversified are still the best ways to achieve financial goals in the years and decades to come.

On the lighter side, I played in a charity tennis tournament at the Dunes Golf and Beach Club Sunday in Myrtle Beach, SC, to raise mental health awareness.  Will for Hope is a day of tennis for a good cause and with good people. Remember, everyone has struggles and it is ok to ask for help. 

Feel free to email me at [email protected] or click here to set up a phone appointment.  

Hope you and your family had a great 4th of July weekend,

Jeremy

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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