Jill On Money: Achieving financial independence

I have a friend who has been a financial advisor for more than three decades Among his favorite conversations with clients is the one when he can tell them that they are one bad meeting away Related Articles The GOP Megabill What taxpayers should know Bulk teens and girls especially see college as key to jobs and life skills poll says Jill On Money Trump s mega bill winners and losers Ghost factories are a warning sign for green manufacturing s future Who will and won t benefit from the bigger SALT deduction In other words they have created a plan that provides them with the financial independence they need As a impact they have the ability to give their notice and hang em up whenever they would like to do so perhaps after one last annoying or bad meeting As I consistently learn from my podcast listeners financial independence is a personal goal one that allows you to make life choices without money being the primary deciding factor For a great number of this idea might seem remote even impossible For others it may be feasible but they are unable to enjoy the milestone once they reach it Here are certain procedures to help you build the foundation necessary to make financial independence a reality What s your number Let me state with certainty There is no single rule of thumb that will create your magic number There s no need to rely on rules like times your annual expenses when there are so various calculators available that can create more customized solutions The hardest part of the process is the simplest You need to calculate how much money you spend on a monthly basis Don t forget to add in any expenses related to ongoing obligations you have toward others like aging parents adult kids or helping out with grandchildren The monthly need will be reduced by any income you anticipate receiving in retirement including pensions Social Assurance passive income from rental property or a trust and the income generated from your nest egg savings investments retirement accounts With this information in hand you are ready to approach your retirement calculations Now what Once you have the raw numbers you might find that you are going to have to save more money in the modern day Or you may have to work longer though not necessarily doing the same thing A large number of folks in their s find that they can transition to a different career or job in their s and s one that will allow them to reach their ultimate goals with a little less stress I call this an off-ramp a way to slow down without screeching to a dead halt But you can only find that off-ramp if you put in specific of the work upfront For the greater part there are trade-offs involved in the process but the payoff is immense the shield of knowing you have options Do I need to be Warren Buffett to get there The journey to reaching your goal is not built on becoming an stake whiz It s built on the boring consistent habit of investing a portion of your income in low-cost diversified index or exchange-traded funds The general rule is to save several portion of your income here one rule of thumb can be helpful Shoot for percent or more if you re starting later or want to reach the goal faster That s aggressive enough to make progress but sustainable enough that you won t burn out One note about being a long-term investor Sometimes you will have to endure several awful stomach-churning losing periods of time Unfortunately the longer you invest the higher the odds that you will have to experience seeing your account drop in value and living through a correction a drop a bear area a plunge and maybe even a crash To endure these likely events remind yourself that you have a plan and that time is your greatest ally Related Articles DA investigators search California company accused of overexposing employees to toxic gas New -acre parks project underway at Bishop Ranch in San Ramon How to clean your computer earbuds and smartphone Former California mayor charged in illegal pot cultivation occurrence tied to Chinese company California is so eager for homeowners to build ADUs it s helping them save on architect fees Jill Schlesinger CFP is a CBS News business analyst A former options trader and CIO of an financing advisory firm she welcomes comments and questions at askjill jillonmoney com Check her website at www jillonmoney com