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A discussion post popped up in one of my FB Financial Independence groups – “The financial independence (FI) community discusses achieving financial independence as if it is a given, as if it is obtainable by everyone. Is this the case?”

I don’t know your present financial situation, so I will share my thought process to help you think through your willingness and ability to achieve FI.

Long before I found the financial independence community, I didn’t know the concept of the 4% rule¹ and didn’t know anything about LeanFI², FI³, FatFI⁴, CoastFI⁵, BaristaFI⁶, CampFI⁷, LibraryFI⁸, and HikingFI⁹, I just wanted to be a millionaire so I could sleep slightly better at night.

In the footnotes you will find short definitions of the terms. As those are heavily covered topics in the FI community, you are free to google them as well.

So I sat down and did some calculation. By that I mean I typed a few numbers in Excel. Why a few numbers?

To quote my boy, or my man, Warren Buffett,

It is better to be approximately right than precisely wrong.

When I sat down and did the math, I already went through a fair amount of changes myself and knew I would go through more changes, so I needed a hazy visual instead of a detailed architectural blueprint. I didn’t need a fancy Monte Carlo simulation model.

Also, I was lazy and didn’t want to learn how to build it.

That said, I came up with a few simple assumptions.

• I picked $1M because it was an approximate proverbial rite of passage number. It is completely arbitrary. At the same time, most goals in life could be viewed as arbitrary from others’ perspective. Why does Tom Brady need to play till 45? Why does Kim Kardashian need to go to law school? I try to be relatable to both men and women.
• I knew that the stock market’s long term average return was about 6% – 8%. In this exercise, I would use 7%.
• I knew that saving $20,000 – $40,000 was reasonably feasible. I could try to use higher numbers but unfortunately my body needed food (still does, haven’t hacked this one out yet, stupid body) and wanted to be realistic with my income figure. To provide context, average American income was about $50,000 – $60,000.
• I knew that compounding takes a long time to be effective so at the very least I need 10-20 years of work. At that point, I didn’t think about retiring early. When you entered the job market around the Great Recession with student loans, the last thing you thought about was retirement. I also tried “early retirement” once and meh.

There are a lot of blogs that already publish the data in beautifully designed Excel tables, so I will keep mine simple. Again, I am lazy.

• At $20,000 and 7%, I need 23 years to cross the $1M mark
• At $30,000 and 7%, I need 18 years to cross the $1M mark
• At $40,000 and 7%, I need 15 years to cross the $1M mark
• At $50,000 and 7%, I need 13 years to cross the $1M mark
• At $60,000 and 7%, I need 12 years to cross the $1M mark (if you remember from above I was only going to enter up to $40,000, I threw in $50,000 and $60,000 for you as bonuses since you are still reading. While you are at it, do you want to sign up to my email list?)

There were a few thoughts that came out of the data.

• Achieving financial independence is hard, but mathematically quantifying it allowed me to know what to aim for. I could set action items to achieve annually or monthly.   
• There were two primary difficulties to achieving FI. The first difficulty had to do with the consistency needed. At the bare minimum, I would need a decade to achieve my goal and that’s optimistic. The second difficulty had to do with the numbers needed. An average American earned about $50K – $60K, location dependent, and given many mandatory expenses (taxes, housing, etc.), most Americans are probably challenged to save even $10K per year. Therefore, achieving my financial independence number requires me to be above average, mathematically speaking.
• To shorten the journey, I could lower my FI number, and increase my savings by spending less and earning more. At the same time, knowing the number of years needed helped me set the right expectation. In fact, from this exercise I realized that patience was almost a required virtue needed to get to FI.

So back to the original question, is FI a given and obtainable? There is a school of thought called realistic optimism (Martin Seligman wrote more in depth in his book Learned Optimism). In short, you are optimistic that you can achieve the goals you set out to achieve, but only if you are realistic in terms of the difficulties and hard work required to achieve Financial Independence.

So are you ready to figure out your FI number and how long and hard you need to work to get there?

Unfortunately, I don’t have a $20,000 course to sell you yet so I won’t be saying how easy it would be. But it is coming soon…

In the meantime, I have created this video for you to get started. 

Thank you for reading click here if you want to know know a little more about me, click here if you want to why I started the blog and click here if you want to know why I picked this name.

1. This is also called the safe withdrawal rate. It is how much you can withdraw from your investment balance without your balance declining over time.
2. It is typically under $1M of net worth. If you are married, you probably want to stay married for now since the cost of divorce will probably wreck your finance.
3. It is typically between $1M to $2.5M of net worth. If you are married, you can choose to get divorced but it is depending on how much you hate your spouse.
4. It is over $2.5M of net worth. You can now tell you spouse to take a hike without too much of a dent to your net worth, whether or not you hate, like, or love your spouse.
5. When you realize don’t need or want to hustle hard to get to FI.
6. When you have a sizable net worth but worry about medical expenses you take a job at Starbucks for the insurance benefit so you can be semi-retired.
7. Usually a weekend retreat for FI enthusiasts.
8. A monthly library meetup that I host for my local ChooseFI group. It is trendy in the FI community to put FI after everything.
9. Going with the trend, it is a hiking meetup that I hosted once in early April.