What Is Financial Freedom?

[nemorathwald]

You know how I get with my single-minded enthusiasms and dreams. Ever since I got a really great job, the current obsession has been the spreadsheet on which I track my financial projections and near-future milestones. In acknowledgement of life's unpredictability, I named it Unhatched Chickens, which I am counting. As of now, I have acheived many of the milestones. My objective is in sight.

The objective is not slavery to money, but financial freedom. I define this as the minimization of having to think about money. "Does this decision result, in the long term, in having to think about money more? Or less?" In other words, I'm finding the sweet spot where I am paying just barely enough attention to my finances that I can safely relax. Ironically, I found that when I don't think about it, and live hand-to-mouth, I end up thinking about money constantly.

In the meantime, until I have financial freedom, I am in blitzkrieg mode with my every thought bent toward clearing financial obstacles. Don't get me wrong, the finance beast is immortal, so I'm not fooling myself that I can go back to ignoring it again. But my every thought is bent toward taming and fencing it, so that I can stop bending my every thought toward it.

On a related note: JoCo has a talent for characterizing the desolatation that results from thoughtless and unimaginative definitions of "success". A reminder of the similarity of white picket fences to vampire teeth, sucking out life.

Jonathan Coulton, "Shop Vac" (MP3 link)

We took the freeway out of town
We found a place to settle down
We bought a driveway and a swingset and a dog
You got your very own bathroom
I got my very own workshop in the basement

We sit around staring at the wall-to-wall
Take field trips to our favorite mall
Waiting for the day when all
The kids grow up and leave us here

If you need me
I’ll be downstairs
With the shop vac
You can call but I probably won’t hear you
Because it’s loud with the shop vac on
But you’ll be OK
Cause you’ll be upstairs
With the TV
You can cry and I probably won’t hear you
Because it’s loud with the shop vac on

Comments

[atdt1991.livejournal.com]

I'm very interested in a site called Mint which is an online financial thing, very simple and it seems intuitive, though I haven't explored it at length just yet.

Some people aren't comfortable with putting their financials online, in which case this isn't a reasonable option, but it might help you.

[matt-arnold.livejournal.com]

I signed up for that almost the first day it went public. Not having any bank accounts or credit cards, I couldn't do anything with it. So my Mint account has just been sitting there. Getting a bank account is the next thing on my list.

[(Anonymous)]

How can you be on the road to financial freedom without the tools? Although banks are not your friend, they are a near essential ally in creating financial freedom. I have no idea what the phrase "financial freedom" means to you, but to me it means having sufficient capital in diversified investments (not all just in the stock market or all in real estate) that I have sufficient residual income (keeping up with inflation) to provide me with the equivalent of $100,000 per year in year 2000 dollar amounts. Since I'm still in school, this is likely a very long way off.

If you're serious about this here are some good resources I enjoy:
The REAL Rate of Inflation - http://www.shadowstats.com/
Fatwallet Finance (a bit overrun but great for learning how to make money off credit cards) - http://www.fatwallet.com/c/52/
Jim Sinclair's Site on Gold - http://www.jsmineset.com/

Do you read David Brin's blog?

[matt-arnold.livejournal.com]

Hi, Anonymous Stranger, who are you?

I never said I was not going to get a bank account. I haven't got a bank account yet because in order to do that, I would have needed an income. Now that I have an income, getting out of debt is the first step in my plan. I don't need a bank account until the second step, which is to save up $1,000 in an emergency fund. The third step is to purchase a reliable used vehicle in the $2,500 to $4,000 range.

Your goals are far more advanced. Investment is nice, but I won't be ready to even think about investment until mid-2008. Additionally, I laugh at the idea of earning $100,000 a year in income, to say nothing of $100,000 a year in interest. That kind of lavish, extravagant opulence is completely unnecessary. What are you going to spend it on, a swimming pool lined in diamonds? To achieve it, I would have to pay so much attention to money that it would be my master. I want enough money to not have to worry how to pay for a rented room in someone else's house, a reliable used car, and a star to steer it by.

I do read David Brin's blog, except for the entries about politics.

[temujin9.livejournal.com]

(I'm not the anonymous above. Nor do I think that $100K is a useful bar to aim for . . . though time and inflation may change that.)

Bank accounts are a convenience thing. It's a lot easier to handle debt and payments with a checkbook than with money orders and cash piled under the mattress. It's wise to avoid them if you're so poor that overdrafts are a constant danger (bank fees constitute a "poor tax" at the worst times possible), but once you've got a fairly steady stream, they're a valuable tool. Credit cards are much more questionable; if you're aiming to build up your credit score, they can help, but beware shady deals.

Good luck on the mission. It is largely achievable, even if you're an overly logical contrarian . . .

[temujin9.livejournal.com]

Also, bookkeeping is a lot easier if you have a bank website to pull data from. I do all mine in a stunningly simple Excel spreadsheet, which lets me cut and paste directly from my bank's CSV data export.

[(Anonymous)]

Do you know how to cook? It should be in every geek's road-to-solvency plan.

-another AC

[matt-arnold.livejournal.com]

Hi, who are you? I really want to know.

Yes, beside the traditional dishes of pancakes and stir fry, overthesun gave me recipes for chili, and chicken and rice. Recently eoghnved taught me how to make very inexpensive Indian chicken dishes. We're going to have a "Cooking for Geeks" panel at Penguicon.

[artemisia-starr.livejournal.com]

I worry absurdly about my finances...the key problem being in that I just can't hold my ground and keep expenses down when someone introduces a new item into the mix.