This post is part of a 30 days series called the 30 steps program to financial independence. You can check the list of other posts here.
Step 7: Invest
The goal of financial independence is to have sufficient income generated by investment periodically, so you don’t have to go back to that dreaded office anymore. So how you do that? Through smart investing.
I am not a financial adviser, I just like to give my two cents. You can invest in anything, I usually do a quick calculation and then go with my guts. I have bought two apartments so far, one of them I just sold at twice its value after 9 years of receiving rental income, the other one has three bedrooms and is rented to three people on an individual basis.
I also have funkier investments like cattle or coconuts. Live cattle is actually pretty good an investment, since a cow will give you another cow every 18 months or so, and I don’t know many investments that can duplicate in 18 months. The full calculation is not that simple but with the arrangement I have, I get a very good return on my money.
Regarding the coconuts, I just pay a managing company with part of my harvest and in exchange they take care of the crops, sell and deposit me every three month.
Investing can be hard for beginners and I strongly advise that you seek professional opinion. It is costly but not as costly as seeing your saving disappear in some Ponzi scheme.
Depending on your age, the amount of your savings and your risk aversion, you may chose one or the other form of investment. The stock market returns on average 9% yearly, but you have to be in for the long term or chances are you will lose money.
Think twice before you invest, and always keep an emergency fund so you don’t have to withdraw from your investments at a loss.
Your investments will maintain your lifestyle during your years of financial independence. Your financial adviser can make projections with you to see when you would reach your goals and how much you need invested.