Wealth: Financial Freedom by 2030?

This post was originally published on Substack.

In the last edition of Mingdom Moment, the focus was on health and my plan to get back on track. This edition is all about wealth and my plan for financial freedom in the next 10 years!

OK, that might have been a bit of an exaggeration… it’s more of a declaration of intent than a plan. I’m writing to share my thoughts on the subject and hope to find like-minded partners who can help me with this venture.

Why is Financial Freedom a worthwhile goal?

While I’ve always been interested in wealth and its accumulation, it was only in recent months that I got a clearer sense of why. The inspiration can be summed up from one quote from Morgan Housel in The Psychology of Money:

Freedom is the highest level of wealth: the ability to wake up every morning and say: “I can do whatever I want today”.

Despite what you might think, I don’t intend to play video games all-day-every-day once I’m free. I’m simply striving for the future where I could do so. The investor in me gets to take direct control of how to invest my time, the most precious resource.

Letter from my past…

I got an unexpected letter from my past self written 3 years ago (using futureme). One part reads: I have a good job, which frustrates me at times, but I also enjoy often. But I’m not satisfied. I guess I feel short on time… it goes on about how I felt I spend way too much time and energy on my job.

This was just after I decided to quit my previous job at an AdTech startup: “the big thing now is that I already told my COO I’m going to leave. Regardless if that’s really the right thing to do, I will be doing that.”

It turned out very much to be the right thing. My current job is challenging, I get to work with great people, I found a great mentor, all while making over twice the dough. Yet what surprised me about reading this letter is how similar my current struggle continues to be. I’m still not satisfied, still get frustrated and feel overwhelmed at times.

I’m performing well and can easily see myself continuing to climb the corporate ladder. However, it doesn’t appear as though my boss or even his boss have more autonomy or power than me. In fact, it’s likely the opposite - that they need to deal with a lot of BS (Bureaucratic Stuff) and I don’t see much obvious value from their work.

I realize it’s easy to be a critic of other people when you don’t have their job. So if I were to adjust for my personal bias, I’d guess there’s only a 50/50 chance that I would do better in their shoes =P

The trouble with the rat race is that even if you win, you’re still a rat.

How might we exit the “rat race”?

I can’t recommend the Psychology of Money enough if you at all care about this topic. I realized after reading this book that the path to financial freedom is paved by maximizing savings while consistently compounding on it.

“Consistently compounding” are both keywords, it’s a simple concept with non-obvious applications for our household:

1. Lower cost of living. The most obvious way is to move to a cheaper neighborhood. Eating out less helps too. Adding passive income also effectively lowers the cost of living.
2. Stay in the market to let our money compound over time. We had a lot of cash from selling during the recent market highs, it’s time to dollar-cost-average them back in via tools like Betterment.
3. Figure out when enough is enough. According to the 4% rule - we can retire once we can live off of 4% of our total compoundable net-worth. If our annual cost of living is 100K, we need 2.5MM in compoundable net-worth. Lowering our effective cost of living from 100K to 50K means we only need 1.25MM.

Before reaching financial freedom, I’m starting to consider the next leg of my career in 3 different directions:

• Product Manager - for an established company like Google where I can learn what it means to be a good PM.
• Cofound a company - more likely a lifestyle business that can generate passive income than a high-growth startup.
• Become a full-time investor - join a VC firm or become an Angel investor

Whatever I do next, I will prioritize having higher autonomy and flexibility with my time.

Thoughts or ideas?

I would love to get advice from you on this topic via email or this 3-min survey.