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Ask HN: How have you achieved financial independence?

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Re: Ask HN: How have you achieved financial independence?

#51

Post by maaaats »

samsonradu wrote: post #40

Doing pretty well from consulting these days, however I can't manage to generate any passive income. Having saved about 30k in the past years doesn't seem to help either, interest rates are ridiculously low. Stocks and bonds are not really my area of expertise so I decided to stick to cash. Investment funds might be an option in the nearby future.

Just buy index funds. They have low fees, and beat most (if not all) managed funds long term anyway. Find a fond tracking S&P 500, one global and maybe some other markets, and you should be set.

Re: Ask HN: How have you achieved financial independence?

#52

Post by chaostheory »

erikb wrote: post #46
guaka wrote: post #38

Earlier quoted context omitted.

You don't need any stuff if you detach yourself from any location. I spent I think I spent around 500€ per month like this on average. But I have some friends with a more radical approach, which inspired me translate a Dutch website about living with money into English: moneyless.org. As a side effect, I'm making some money with this specific site (but not with Hitchwiki or other community oriented projects). Togethe…

The thing I don't like about all these spend-no-money approaches are exactly these things like not having an apartment. That's not how most people can live. Even if I spend 2 years travelling around I wouldn't feel well without having an actual home I can go back to. So these kinds of methods can only apply to small parts of the general population. Trying to achieve that state for normal joe me is just as hard as get…

You should check out Mr Money Moustache's approach with frugality then. He was able to pay off his house and 'retire' in his 30s. He was also able to make it work with a kid.

Re: Ask HN: How have you achieved financial independence?

#53

Post by erikb »

samsonradu wrote: post #40

Doing pretty well from consulting these days, however I can't manage to generate any passive income. Having saved about 30k in the past years doesn't seem to help either, interest rates are ridiculously low. Stocks and bonds are not really my area of expertise so I decided to stick to cash. Investment funds might be an option in the nearby future.

Have you tried to automate some of the tasks of your business? Meaning you structure them in a repeatable fashion and find people who want to work on the steps of your defined process. That way you can also achieve passive income.

Re: Ask HN: How have you achieved financial independence?

#54

Post by erikb »

Swizec wrote: post #13

As others have mentioned, financial independence isn't hard. The hard part is financial independence without lifestyle compromises. I'm making roughly $2k/month with books and workshops. The marketing and content producing takes about 2h/day on average. It makes my life a lot easier and less stressful. But rent alone is $3500 in this stupid city (San Francisco). So I still need a day job for now.

> The hard part is financial independence without lifestyle compromises.

My point exactly.

But I also think you don't need to live in one of the most expensive cities of this planet. A few lifestyle changes should be acceptable, though. I would say if you spend more than $50k/year it should be possible to have quite a good life with some modifications.

Re: Ask HN: How have you achieved financial independence?

#55

Post by EliRivers »

tonyedgecombe wrote: post #44
EliRivers wrote: post #28

Earlier quoted context omitted.

I believe that dividends are not priced in. The reason I believe this is not related to stock picking working for me. I believe it because the market is not efficient, and dividends being priced in relies on an efficient market. Any success I have in stock picking relies on this inefficiency; it's just a symptom.

If dividends weren't priced in then prices wouldn't dip when stocks go ex-dividend.

Sometimes they don't. Sometimes they go up. Lots of people think they're priced in, and the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less. Was it "priced in" before? No idea. Going ex-dividend is a single, identifiable point at which people can say it surely must be worth less now.

I personally value dividend paying stocks more highly than non-dividend paying stocks. A history of dividends makes the stock appear more valuable to me (given that the majority of companies are rubbish at investing in themselves, giving me the money and letting me reinvest it myself is preferable). If they just went ex-dividend, that's a excellent very fresh data point that makes the stock look more valuable to me.

Re: Ask HN: How have you achieved financial independence?

#56

Post by charlesdm »

siscia wrote: post #20
mikekchar wrote: post #3

I'm only responding because nobody else has replied to your thread. Feel free to ignore me if you think it is irrelevant. My favourite Dr. Who quote: "Work for? I don't work for anyone. I'm just having fun." Describes me, even though I receive money every month. My expenditures are considerably less than the money I receive every month by having fun. If I didn't receive money, then I would be in trouble, so I don't r…

The married part is the one I am more interested in. I too live extremely cheaply, but my girlfriend has way more expense than me (still reasonable, but too high in my book). We are not married, but we spend a lot of time together and I am a little afraid that this difference in how we spend money will be a problem. How did you manage it? My very first step was to have her create a save account where she deposit each…

Living extremely cheaply isn't always that great.. you can be frugal, but at a certain point, people take it too far.

I.e., if you spend hours (or days!) comparing prices when purchasing lower value items, you value your time at exactly zero, and it might actually be easier to make (!) money vs spending less. Maybe your girlfriend actually prefers living a little?

I'm not saying to throw your money away on useless stuff (I don't), but at a certain point, it gets tiresome. I've known a guy who, when he was thirsty, refused to purchase a small bottle of water for like €1.5 because he considered it a ripoff, after which he promptly asked a friend if he could drink from his bottle. Honest to god, I hope you don't mean living cheaply in that way.

In the end, it's about finding a balance. Too much spending, and you won't have enough to invest. Too little, and life won't be much fun, 'cause frankly a lot of fun things cost money. I spend about the same (probably a bit more) as some of my friends in terms of monthly burn, yet I make 10x their salary. I consider that frugal, but I live well.

Also, there's no point living cheaply if you don't know what to do with the extra money. Know where you're headed, i.e. financial independence, buying a house, etc

Re: Ask HN: How have you achieved financial independence?

#58

Post by charlesdm »

chaostheory wrote: post #52
erikb wrote: post #46

Earlier quoted context omitted.

The thing I don't like about all these spend-no-money approaches are exactly these things like not having an apartment. That's not how most people can live. Even if I spend 2 years travelling around I wouldn't feel well without having an actual home I can go back to. So these kinds of methods can only apply to small parts of the general population. Trying to achieve that state for normal joe me is just as hard as get…

You should check out Mr Money Moustache's approach with frugality then. He was able to pay off his house and 'retire' in his 30s. He was also able to make it work with a kid.

Lots of great stuff on there! There's always something about investing you don't know.

Re: Ask HN: How have you achieved financial independence?

#59

Post by kaybe »

lucb1e wrote: post #24
mikekchar wrote: post #3

I'm only responding because nobody else has replied to your thread. Feel free to ignore me if you think it is irrelevant. My favourite Dr. Who quote: "Work for? I don't work for anyone. I'm just having fun." Describes me, even though I receive money every month. My expenditures are considerably less than the money I receive every month by having fun. If I didn't receive money, then I would be in trouble, so I don't r…

I would like to hear more about living on less than $10k a year. I'm still a student and my parents pay a lot, so I don't actually know how much I'd spend if I paid for everything myself currently. I just always assumed that $40k is about the minimum for a normal living. Doing the math though, counting food, rent and "service costs" (water, electricity, internet), I end up with a lower bound of about 6000 a year. Thi…

You can easily get furniture and many appliances for free, at least around Germany. People will put old but functional things on the street for the truck, and if you're fast you can get some good stuff. Also, there are internet sources where people post what they want to get rid of. And how much do you really need anyway?

At this point, if I needed something specific, I'd just put up a poster, a neighbour probably has it in their basement and wonders how to get rid of it.

I'm on ~7000€ a year, and that includes health insurance, replacement of broken cheaper things (spare parts for the bike, clothes..) and also the occasional splurge like cinema or eating out. A car would not be possible, but if I need one I can either ask a friend or rent. A car is a liability in most European cities too. I could go down some in expense if I needed to, but then it would be less comfortable.

You can track your cash flow for a year and see for yourself where your money goes and what is essential.

Re: Ask HN: How have you achieved financial independence?

#60

Post by tim333 »

zen_boy wrote: post #10

Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…

Typically the best / simplest way for sustainable mostly passive income is rental property. Lots of how to guides out there. Mortgage rates are really low at the mo if you want to leverage.
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