Here comes Toastmasters Speech 2! Followed by my first Toastmasters* Icebreaker speech, it was high time I introduced FIRE* to my fellow Toastmasters.
*Toastmasters International is a non-profit educational organization that teaches public speaking and leadership skills through a worldwide network.
In simple words: a friendly, supportive place to face your fear of public speaking and discover and fine-tune your leadership style.
*FIRE – Financial Independence Retire Early
People, who of you would like to have Monday free for the rest of your lives?
What if I added Friday to that? And what if I added the remaining 3days in the middle? Without a pay cut? Without decreasing the quality of your life?
Imagine all the things you can do with your time – travel, read, spend time with friends, play with your kids, work on something meaningful for you.
Without the dreadful 9-5.
Without inefficient work setups and annoying bosses, endless meetings.
This is not a utopia. It’s a possibility. It’s called Financial Independence (FI).
The simple formula for financial independence is this:
Spend less than you earn and invest the difference.
I’ll repeat that: Spend less than what you earn and invest the difference.
Who am I to talk about FI?
I’ve been on this journey for my whole life. My frugal parents that took care of the basics, but I didn’t get me a bike, or the skis or the expensive school trips abroad.
I didn’t have any of the ‘cool kids’ clothes. Instead, I had to wear the 2nd hand clothes my mother brought in from who knows where …
The scarcity was suffocating me. I was longing for financial empowerment. That’s how I became a software developer and later on a project manager. I now save and invest more than 40% of my income.
3 years ago I started this blog EyesOnTheGoal.com to document the journey and to keep my eyes on the goal of becoming financially independent by the age of 38, by 2022.
A lot has happened since then. I realised it’s not only the financial freedom I longed for. It’s the freedom of spirit, creativity and meaningful work that I’m after. A life that I don’t need a vacation from. The goal is dead, long live the goal.
Nevertheless, financial freedom is the foundation for all of this. If you can’t pay my rent, and your mind is occupied with work deadlines, how can you think of self-realisation?
You’re much closer to FI than you think
You don’t have to wait until you’re 65 and you have your best years behind you working your ass off at a job.
No, you can plant the seeds now and enjoy the fruits later down the road.
The fact that we all live in Germany and especially Berlin puts us in a unique position. It’s true that the housing market is a nightmare at the moment. But most of the other expenses are low.
We don’t have huge student debts as our friends in the US. The public transport and bike lanes are good. We don’t need to own expensive cars.
Where else in the Western world can you have lunch from 5Eur to 10Eur? Food is cheap here.
Plus, we can make a fairly decent amount of money. Especially the IT crowd- just out of curiosity – who works in IT here?
Just by adding one or two marketable skills to our portfolio, like public speaking (wink wink), for example, we can stand out and be raise further in our careers.
There’s this whole other thing – the internet which offers endless possibilities not only for acquiring marketable skills but also side hustles and income-generating projects.
Let me just give you an example:
If Jesus invested 1cent at a yearly compound interest of 5% at his times, how much would he have now? Can you guess?
55 million pure gold balls, each the size of the Earth!!!
Here is how the compound interest works:
Let’s say you start with 1Eur. You save it with a compound interest of 5%.
At the end of the first year, you’d have 1Eur 5cent.
At the end of 2nd year, you’ll receive 5% interest on this 1E 5cent. And so on and so forth.
In the span of many years, the one euro will grow exponentially. You don’t have to be Jesus or stick around for 2 thousand years. You can start now and see the compound interest effects spanning out in the upcoming decades.
How to get rid of FOFO*
*Fear Of Finding Out (about your financial situation)
I can talk for hours about it. But I’d like to finish with 2 actionable points for you!
1. Track your expenses
First of all, track your monthly expenses. What comes in, what goes out. Be real about it. Those lattes and ice cream, drinks, shoes, Amazon shopping, subscriptions, insurance, you know best what your guilty pleasures are … Put them on the list.
You’d finally know the answer to the question: Where did all my money go?!
And the guys – don’t blame it on your girlfriends/life partners/wives. I’ve heard this line so many times:
I would like to be saving and to be a minimalist, but my wife has these crazy shopping habits …
Work as a team!
Tracking your expenses will give you the awareness you need to start cutting down what’s not essential. For inspiration, check out my 100 Things Challenge.
If you only you do this first step, you’ll be ahead of 95% of the people. You’ll be lighter, freer and much happier.
2. Calculate your net worth
Your net worth is the gross amount that is left if you put together all your assets in a big bucket – properties, savings, investments, incomes and remove all your debt – mortgage, credits, etc. Whatever is left is your net worth – what you have amassed to after all of these years of work ….
Now that you know your monthly expenses and your net worth, you can think of your short and long term goals and see how you can achieve them.
Because the best day to get hold of your finances was 20 years ago. The second best day is today.
Photo credit: Kate Apps’ private archive, header made with Canva