Financial freedom and retiring early may not mean what you think. Take it from someone that retired at 40.
The Financial Independence, Retire Early (FIRE) movement has gotten some big press lately with bloggers and media personalities coming down on both sides. Some are all-in on the concept of achieving early financial freedom while others are calling the trend a scam.
I had an opportunity to sit down with JD Roth, a guru in the financial freedom movement, at a conference late last year. JD started Get Rich Slowly in 2006 to share his personal finance journey and paying off $35,000 in debt.
JD grew the blog to one of the largest and most respected in the community and sold it for undisclosed millions in 2009. Nearly a decade later and a world of first-hand experience on early retirement, JD bought the site back to reveal what he’s learned about financial independence.
I’ve posted the two interviews below. In the first, JD reveals the secrets of what he learned retiring early and the truth about financial freedom. In the second video, we talk about how you can achieve your own level of independence as fast as possible!
What Does Financial Independence and Retire Early Really Mean?
This could be the most important video you watch about financial independence. The truths JD reveals will give you a roadmap to what the FIRE movement doesn’t tell you and why traditional thinking about financial independence is wrong.
You see, traditional thinking around financial independence is that you reach it when you have enough money invested to cover all your bills. That’s a LOOONNNNNGGGG way away for most people and ends up discouraging most from even trying.
JD shows you why this is wrong and the truth that will motivate you to start your journey.
I love this idea of financial independence being a progression from paying off debt to debt-free and making more money. I’ve talked to so many people that were able to pay off their debt and the feeling they get, being out from under that crushing debt, is amazing. They may still have to work but they feel truly free and alive.
Think of financial independence like you would as if it were your health. You can be really sick, owing thousands in debt and living paycheck-to-paycheck. With a little exercise and right living, you might get to a point where you’re healthy with little debt and a good credit score. Keep training and you can become athletic, debt-free and making enough money to be set for life.
Getting your health to that of an athlete may seem impossible to you and that discourages a lot of people from even trying. But just making that little extra effort to become healthy is a worthwhile goal and will make your life 100-times better.
It’s the same way with financial independence. Don’t set out to become a millionaire overnight. Just start getting in financial shape. In no time, you’ll start to feel better and will be surprised at how far you’ve come.
How to Reach Financial Freedom Fast!
Our second interview was a great look at actually reaching those levels of financial freedom. JD affirmed one of the most important points I try to make on the blog. Reaching true financial independence is a balance between earning more and spending less.
I think too many people focus narrowly on saving money. They spend hours reading list articles like 10 ways to save money or biggest budget busters. They put everything into spending as little as possible.
Then they get frustrated, burn out of saving every penny and just give up. They’re miserable because they aren’t spending anything on themselves. They aren’t really seeing much change in their bank account because there wasn’t much to save anyway.
I’m not saying most people shouldn’t look for ways to save more. We’re a consumer nation and it’s out of control…but most people are living paycheck-to-paycheck not because they spend like they’re millionaires but because they just DON’T MAKE ENOUGH MONEY!
Saving more money and reaching the different levels of financial independence is about saving but it’s also about making more money.
JD recommends three ways to reaching financial freedom, focusing on the big wins that will get you there as fast as possible.
- Start by saving money on housing costs, the biggest budget buster for most people. Downsize your house, consider getting a roommate or just watch that utility bill.
- Ask yourself if you really need to use the car every day. Transportation is the second biggest expense for most households and can really open up some opportunity for budgeting.
- Look for ways to improve your financial health from the other side, how much you make. Check out these videos with 20 side hustle ideas anyone can start.
Not sure you want to start a side-business? JD closes with some great ideas on making yourself an asset to get more money from the job you have.
Of all the interviews I’ve done on YouTube, these two have been the most informative with the most potential to change your life. Watch the videos and ask yourself what financial freedom really means to you. Make it personal and put yourself on a path to independence!