In my last post I talked about having the courage to change the things that are within our control, in order to take ownership of our finances and start on the road to Financial Serenity. Firstly, what do we mean by Financial Serenity? The FI/RE movement (Financial Independence / Early Retirement) is all about achieving a point where your future expenditure is less than your net worth + future income. At that point you are Financially Independent and can choose to retire early and enjoy the fruits of your hard work and financial acumen.
As a Dubai ex-pat… our jobs are the very reason we came to be here, living this lifestyle in the first place. Our right to be in the country is dependent on our work visas and often our health insurance, school allowances and many other benefits are tied to our work. Being employed here is almost a necessity. (We will look at the options around the new retirement visas and starting your own company / self-funding health insurance at a later date.) That’s why Dubai Money Guy likes to talk more about Financial Serenity. A position where our finances take care of themselves, and we are free to define the life we want to lead. For many of us that will still mean reaching Financial Independence as soon as possible… generating more passive income than we need, and then choosing to work on our own terms.
It’s also worth noting that a lot of people genuinely like their jobs. They enjoy the sense of achievement and direction that gainful employment brings. That’s wonderful… the FI/RE movement is not about forcing everybody to retire and totally stop all spending whilst living in a tent in the empty quarter. It’s about choice and freedom. If you are one of those people who feels completely empowered by your job and totally in control of your finances… I am genuinely happy for you. But if you are someone who sometimes feels out of control, weighed down by the constant outflow of money, worried about losing your job or afraid of the next whopping bill or unplanned expense that could throw you of track… then read on.
Right now you might be drowning in debt or in such a state of denial that you don’t even realise how far you are from the goal. In that state it’s very hard to get started on the right trail. You’re standing at the foot of the mountain looking through the fog and you can’t even see the peak. But break that journey down into manageable stages, where the progress is visible and rewarding… and very soon, you will be through the mist with your goal in sight and nothing to hold you back. The longest journey starts with a single step.
So here goes – Dubai Money Guy’s 12 Step Programme for Financial Independence:
- Accept that more stuff does not equal greater happiness.
- Have ‘the talk’ – get your partner on the same page.
- Create accountability by tracking everything you spend / earn, and your net worth.
- Identify unnecessary spending and STOP.
- Tackle debt – highest interest first.
- Ring fence your ‘safety net’ fund.
- Set big goals.
- Invest – Pay yourself first.
- Earn more – salary, investments, side hustles.
- Conduct regular audits and rebalance your investments.
- Stay the course. Eyes on the prize.
- Enjoy Financial Independence / Serenity – Find a purpose.
Now, you can object to some of the wording, you might even think that a different order would work better – and that’s fine. But I challenge anyone to pick a single item on this list and prove that doing it consistently WOULDN’T improve their financial situation and their life. (And if you’re thinking number 12… I’ll prove you wrong later!)
Over the course of the next six blogs – we’ll break down the list and expand on each step to give you an actionable framework to diagnose and then start healing your money ills. If you are still reading at this point… congratulations… you’re on the way to financial serenity… one step at a time.
Next Blog: Steps 1 & 2. ‘Accepting stuff ≠ happiness’ & ‘Having the talk’