Financial independence - spending habits are a major factor
An interesting article caught my eye over the weekend. It was about a couple that curbed their spending and plan to retire at just 45 years of age.
This seems hard to believe I know, however we must remember that the definition of ‘Financial Independence’ is when passive income, normally generated from investment savings, replaces Active income, usually generated through employment.
It does not matter how old or young you are. If you can generate enough income to meet your lifestyle goals then you have achieved financial independence.
The spending part of the equation is obviously a major factor and that depends on the lifestyle you wish to lead.
Is it a simple self-sustainable lifestyle focused on your local community or one flying first class overseas and staying in the finest hotels?
The couple in the article had made some sound investment decisions early on in their career however most of their early retirement was attributed to some active choices around spending habits, i.e. saving money, vs having the latest phone, car, or the latest fashion.
With the growing attitude of ‘consume now and pay later’ it did raise the question around what can you do without today, in order to provide you with more choices in the future.
Market Volatility
The word “volatility” is music to the ears for some, but a truly horrible word for others.
For short term speculators it’s a wonderful thing: as the market rises and falls sharply it creates a myriad of opportunities to trade the market.
For others, it creates anxiety and casts doubt over whether the market is stable and valuable.
Either way, assuming historical market trends hold true, it doesn't matter.
Traders can enjoy and take advantage of the market swings, and, over the long-run, those seeking a capital gain and / or dividend income will likely get rewarded if they have chosen solid companies generating recurring earnings.
Market round up
The Australian market has recovered all its early losses this morning after opening lower on the back of Wall Street's poor performance at the end of last week and disappointing December retail sales numbers.
U.S. stocks sank on Friday, led by losses in the tech sector, after a jobs report came in below expectations.The U.S. economy added 151,000 jobs last month, below the 175,000 jobs expected by economists.
Going overseas anytime soon?
One Australian dollar buys:
- 70.97 US cents
- 63.69 euro cents
- 48.90 British pence
- 83.06 Japanese yen
- 106.89 New Zealand cents
Kind regards,
The Coastline Private Wealth team.
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