Tag Archives: saving

The one-page guide to Findependence

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grs_titleConsidering that I once put an entire financial plan into a single tweet, it shouldn’t be too surprising that there exists a one-page guide to Financial Independence.

This one-page guide to Financial Independence is from J.D. Roth’s Get Rich Slowly site. (naturally, I would call it the one-page guide to Findependence!) Naturally, the strategy revolves around that most basic premise of personal finance: live below your means and spend less than you earn: much much less. So that you can save much much more. Not just the modest 10 to 20% that most people shoot for in their IRAs or RRSPs: Roth suggests saving at least 50% of your income, and preferably up to 70%.

Extreme? Indeed, Roth calls it Extreme Saving but that’s also the kind of savings levels that     Extreme Early Retirement gurus like Mr. Money Moustache and Jacob Lund Fisker advocate. The latter’s book can be found here.

As per the philosophy of this site, I would call this Extreme Early Findependence, not Extreme Early Retirement, which is why we call one of our soon-to-launch discussion forums Extreme Early Findependence.

Get out of debt in your 20s or 30s, but get serious about Wealth accumulation by 40s

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This is the theme of my Personal Finance column in this weekend’s Financial Post: page FP9 for those with a dead-tree edition. Asked when you need to get serious about saving and investing towards retirement, I make the case for first getting out of debt. As one character says in Findependence Day, “You can’t climb the tower of wealth while you’re still mired in the basement of debt.”

This means paying off high-interest credit-card debt and maybe student loans before worrying about stocks, bonds and ETFs. The sooner you do, the sooner you get a TFSA. Once you’re in a higher tax bracket, add the RRSP. And if you’re not serious about all this by your mid 40s, be prepared to work a long, long time and/or have a simple enough lifestyle that by the time you turn 67 and qualify for government benefits (Social Security in the US, CPP/OAS/GIS in Canada) you will be accustomed to living on a modest income.

Here’s the full article.