For the purpose of highly efficient goal setting and planning, it is wise to consider “Financial Independence” in TWO unique stages 💸

1️⃣ Stage 1 Financial Independence: is your independence from a boss, job, partner, parent or spouse. Reaching the first stage of Financial Independence means generating enough passive and semi-passive income to cover your cost of living. This is often achieved through delegating business activity or accumulating semi-passive income streams such as trading.

2️⃣ Stage 2 Financial Independence: is the ability to maintain Stage 1 Financial Independence regardless of market, mind, motor skills or mortality. Reaching the second stage of Financial Independence means:

– If the market crashes, your income stays put.
– If you lose your mind, your income stays put.
– If you lose motor skills, your income stays put.
– If you lose your life, your income stays put.

Rather than relying on business or trading income (which is relatively transient), Stage 2 financial independence demands that you have accumulated enough liquidity to return your desired annual income based on low-risk, un-leveraged, diversified, passive investment returns.

Here’s the kicker… 🔑

Mass population chase active (job) income their entire life, waiting for “retirement age” when, hopefully, their 401(k) or superannuation accounts can support their lifestyle. It usually cannot.

Wiser cats understand that Stage 1 Financial Independence is The. First. Monetary. Goal. PERIOD. And the truth is that Stage 1 FI can be achieved relatively quickly – months and years if you’re a killer 👌

So… why not try playing by these rules:

1. Take control of your income so you can delegate the work.
2. Liberate yourself from forced servitude (active JOB income). Aim to do this in 2 years or less. If it blows out to 5 years, you’ve still done well. Welcome to Stage 1 Financial Independence.
3. Delegate the technical work, focus on strategic work and scale it up.
4. Save, save, save and invest.
5. If you don’t buy too many fast cars, eventually your passive investment returns will exceed your lifestyle expenses (10-20 years should do it, depending on market conditions). Welcome to Stage 2 Financial Independence.

Lewis Mocker

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