We don’t talk a lot about big fancy graphs beautifully plotting our way to financial independence (FI) on this blog.
There are no savings calculators or inspirational loggers to help you figure out how many years of work until you can put your day job aside and figure out what you really want to do with your life.
One of the primary reasons for this is that life is crazy and unpredictable. Neither of us have permanent jobs and that is not something that is scheduled to change any time soon.
We know interests are going to go up “soon”, because they’re at an all-time record low and there really is only one way for them to go.
In short, there are just too many variables for us to make any sort of realistic budget for the next 10-15 years. And perhaps more importantly, neither of us want to work a conventional job for that long. Feeling like we had to do that would probably deflate our motivation rather than inspire us.
So what is our alternative?
Our Path To FI
Instead, we just omit the whole “Retire Early” that often follow FI.
We wish to be financially independent in the sense that we wish to earn enough money from sidehustles, investments and passive income to cover our expenses.
Side by side with that, our second goal is to acquire a small house in the woods/homestead with enough land and forest to keep us covered with most of our food and heating expenses.
We wish to pay off this house reasonably fast, protecting us against future fluctuations in interest and mortgage dependency.
The second goal is an important companion to our first goal, as it means lowering our expenses drastically, making it even easier for our various sidehustles to sustain us.
In time, we plan to grow a sizeable and safe nest of savings from which we can travel, visit friends, fix things that break and cover a month or three where sidehustle income was perhaps not as high as we might have hoped.
Not Relying On The 4% Rule
We will still keep investing and saving because we both need the security of a healthy emergency fund. But we will not be relying solely on an investment portfolio of 25 times our expenses or the 4% rule.
Firstly because we do not plan to stop earning money, like so many other personal finance bloggers out there.
But secondly because, if we manage to pull off our big, farmy goal, we will eventually have expenses so low that our current living expenses cannot really compare or enter into the equation.
We are assuming that our financial independence costs (after initial investments and a few years of normal-high expenses) will be so much lower than our current costs that it becomes kind of useless to try to enter it into a spreadsheet.
But if we manage to earn as much as we are living on right now and then some, we figure we would be on the right track.
The Great Unknown
The problem with this approach is of course that there are a great deal of unknowns.
Will we manage to earn enough? Will it be stable enough? Will we spend more hours working freelance/on sidehustles than we did working conventional jobs?
To alleviate our fears, we have our Great Plan ™ for couple-minded persons:
1. Have one partner earn a steady income.
That’s would be me! I still have 3 years left of my contract, provided I manage to keep my head above water. My income is enough to cover all our expenses and then some, so it provides a safe and healthy foundation while Mr. E. experiments, without him living in fear of loosing the flat or not being able to cover his bills.
2. Let the other part develop and experiment with their sidehustles
For Mr. E. this means continuing to work his freelance translating job, taking on as much work as possible and using that to pay rent, student loans and food. This is our bread and butter, but being paid a x cents per word, this job does not have a lot of room for growth.
When not translating, Mr. E. will continue writing his little stories for ebook self-publishing. This is what we assume will gradually grow into a steady passive income over the next three years. Enough even to surpass his income from translating and beyond.
2.b Purchase a house while partner 1 is still working
Rules being what they are, it is much easier to get a mortgage while hired by somebody else. So we aim to save up enough for a downpayment and to buy our little house in the forest in around two years.
By then, our savings will be very healthy, my credit score/tax return will look good, and Mr. E’s tax return will probably not look to shabby either.
3. Finish stable job and rinse and repeat no. 2.
When my contract is up, it is our goal that Mr. E. earn enough from his freelance and writing venture to support the both of us.
This is where I get to try what Mr. E. spent the last three years developing – an income earning sidehustle.
That is not to say that I won’t be experimenting a bit while working either, but my 100%++ job is quite demanding, and my energy is limited.
That’s it! That’s our grand Great Plan ™. Time will tell if we are successful!
A Single Approach
If you are single and want to approach a similar thing, there are ways to make it happen. One of the things we both miss from our single life was that we had so much more time to work in the evenings and weekends. Time we now spend on maintaining the relationship and taking care of each other.
If you really want to give it your all at sidehustling, I would look for a job that allows you to work part time. Find a job where you earn just enough to cover your basic expenses, plus at least $100-200 extra for savings, emergency funds, repairs and expenses like Christmas, birthday gifts and travelling to see friends and family.
With more time now in hand, but your expenses taken care of, you have a safe and stable foundation from which to explore and engage in your sidehustle of choice, be it online or offline.