15. Let's Declare Our Own Financial Independence Day!
07/01/20 • 25 min
There is no real “absolute” definition of financial independence. Some people may think it means retiring at 40 but that is a very myopic view of it. Rather, I would like to define “financial independence” to mean the ability to live without financial fear during the roller coaster ride of life because you are prepared enough to deal with life’s ups and downs without going into debt, sacrificing and skimping on necessities. It is the ability to live your life as you desire within reasonable parameters, to be able to breathe. It doesn’t mean you never have to work another day in your life, but it does mean you have the freedom to pivot by quitting a job you don’t like, going back to school, starting a new business, or pursuing a new course in life without major upheaval. Freedom to choose, to have options.
Links mentioned in this episode:
There is no real “absolute” definition of financial independence. Some people may think it means retiring at 40 but that is a very myopic view of it. Rather, I would like to define “financial independence” to mean the ability to live without financial fear during the roller coaster ride of life because you are prepared enough to deal with life’s ups and downs without going into debt, sacrificing and skimping on necessities. It is the ability to live your life as you desire within reasonable parameters, to be able to breathe. It doesn’t mean you never have to work another day in your life, but it does mean you have the freedom to pivot by quitting a job you don’t like, going back to school, starting a new business, or pursuing a new course in life without major upheaval. Freedom to choose, to have options.
Links mentioned in this episode:
Previous Episode
14. How did your investment portfolio perform during the Covid-19 Crisis?
The past few months have been a real roller coaster ride in the stock market. Many people are fearful of the volatility in the stock market and are irrationally driven by fear to cash out of their strategy and become less inclined to invest in the future. In a March 2020 survey, over one third of adults reported that they were less likely to invest in the stock market based on what they knew about the coronavirus. Only 12 percent of respondents said they were more likely to invest. Hmmmm.... I think these statistics demonstrate panicked and NOT prudent decision making.
Check out this week's Fiscal Feminist blogpost for more on this important topic.
Links mentioned in this episode:
Sources: Get Smarter About Money: https://www.getsmarteraboutmoney.ca/resources/covid-19-and-your-money/market-volatility-and-investor-behaviour/ Hartford Funds (charts): https://www.hartfordfunds.com/investor-insight/client-seminars/beyond-investment-illusions/reactions-to-volatility.html RBC: https://www.rbcgam.com/en/ca/learn-plan/investment-basics/understanding-the-relationship-between-volatility-and-returns/detail Capital Group: https://www.capitalgroup.com/advisor/ca/en/insights/content/articles/volatility-the-long-term-investors-unlikely-ally.html Investopedia: https://www.investopedia.com/terms/v/volatility.asp Forbes: https://www.forbes.com/sites/jamiehopkins/2019/10/30/4-ways-to-manage-sequence-of-returns-risk/#a2de07927eb9 Investopedia: https://www.investopedia.com/terms/s/sequence-risk.asp Blackrock: https://www.blackrock.com/pt/literature/investor-education/sequence-of-returns-one-pager-va-us.pdf Investopedia: https://www.investopedia.com/investing/importance-diversification/ Schwab: https://www.schwabmoneywise.com/public/moneywise/essentials/the_advantages_of_diversification US News: https://money.usnews.com/investing/investing-101/articles/why-diversification-is-important-in-inves...
Next Episode
16. The Big Reveal: Hidden Financial Risks and How to Protect Yourself
With our busy schedules and juggling so many responsibilities, we often make some significant personal decisions that can have financial consequences that we fail to carefully consider. We can protect ourselves from unanticipated twists and turns in situations with some forethought and planning.
In the tapestry of life we regularly make decisions as to who we live with whether it is a significant other or a roommate, whether we commingle our assets with our spouses, and how we establish our credit, whether jointly or independently. These decisions are wrapped up in personal relationships and the hidden risks, though not patently obvious, should be considered. As always, an honest, open, and practical approach is the best strategy to be fulfilled personally and to protect your individual financial status.
Sources:
United States Census Bureau, 2019: https://bahnsen.co/2VWYvqj
Marriage and Cohabitation in the U.S.: https://bahnsen.co/2ZRLorh
Key findings on marriage and cohabitation in the U.S.: https://bahnsen.co/2Z85dLS
National Health Statistics Reports: First Premarital Cohabitation in the US: https://bahnsen.co/2VYfNmZ
Cohabitation Property Rights for Unmarried Couples: https://bahnsen.co/3gJNLDH
Lewitt Hackman: https://bahnsen.co/38KC1Os
Money Crashers: https://bahnsen.co/3fcW6z5
Premarital Cohabitation and Dividing Assets During your divorce: https://bahnsen.co/2VYf1q5
Common Law Marriage by State: https://bahnsen.co/2AEi6Uz
5 things all roommates need to know about renter’s insurance: https://bahnsen.co/2ZRMgw3
Commingled Property: What it is & How it will impact your divorce: https://bahnsen.co/31YnCwO
Get Married, But Keep Your Credit Separate: https://bahnsen.co/3e5VnhP
Examining the Relationship Between Financial Issues and Divorce: https://bahnsen.co/3ebuk4E
Links mentioned in this episode:
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