What Have You Learned?

Since this website was created around five years ago, a lot has happened globally;
Massive company layoffs, revolutionary AI (chatgpt among others), automation, covid-19, retirement age will probably increase to 70 or more (https://www.wsj.com/articles/career-length-retirement-living-longer-11675878313), healthcare worker burnouts, the increase in available remote jobs, people making a living from YouTube, increased annual inflation, bank runs and war in Ukraine.
There is more evidence than ever that relying on having a regular job as your single income stream, might not be a good idea after all. Job security is a thing of the past.
Many factors out of your control can get you laid off or make you feel unhappy when being employed. There are also new ways to make an income online. Never get comfortable relying on a single income stream. 
If that single engine fails, the whole ship might sink.

Here are some of the lessons from personal finances during the recent years that one can benefit from learning:

Start businesses that has the potential to become highly profitable. First as a side project while working.

Invest long term in markets when they have dipped and the fear is high (on the Fear and Greed Index).

Build multiple income streams.

Save up at least six months of expenses as a buffer. 

Use geoarbitrage for what it’s worth.

Don’t spend more money than necessary on things to impress, almost no one cares about the materialistic things you have. 

Accumulate knowledge that is relevant for improving your life, from books and podcasts on a regular basis.

You will never truly win by being an employee, you have to eventually become a business owner.

The highest degree of freedom is when you can spend most of your time where, however and with whom you want. A life of true autonomy. Autonomy is essential for happiness.


Table of Contents

How To Invest Your Time

Once you`ve hit a medium to high level of freedom, you should be able to live almost wherever you want while having extra spare time and money. How should you then spend your time?

Well, there is no clear answer to that. It all depends on what brings you happiness in life.
For some people it`s traveling, for others it`s having enough energy to train Brazilian jiu jitsu on a regular basis.
It can even be spending more time with your kids or playing chess often.
The key is to be specific about how you want to spend time when you reach higher levels of freedom, preferably before it happens. Spend quite some time thinking about it and write it down.

The most important thing about reaching these levels of freedom is autonomy.
According to a recent study published in the Journal of Positive Psychology, autonomy can be the number 1 contributor to overall happiness (https://www.psychologytoday.com/intl/blog/social-instincts/202204/is-this-one-lifestyle-habit-the-key-to-happiness).
The definition of autononmy is «the feeling that your life—its activities and habits—are self-chosen and self-endorsed». Simply put, autonomy is the sense of wanting to take action instead of being coerced to do so.
Some professions and companies have a decent degree of autonomy, but in general the autonomy you have when you run your own profitable online business is much higher.
Do you have autonomy when you have to work 40 hours or more per week for a company or organization that someone else owns, and a boss can tell you quite often what you have to do and when to do it?
My answer to that is no, you absolutely don`t have autonomy if that is your situation.

If recent studies show autonomy is that important for happiness, why would anyone want to invest 40 to 50 years of their lives in regular jobs? Assuming that you primarily aim for overall happiness in life.
The model for how to live is outdated, or maybe it never was meant to benefit the wellbeing of employees?

Levels of Freedom

Assume that the most precious commodity you have is time. Your time is very limited on this earth, so you should spend it wisely. Like mentioned in previous posts, this means spending time how, where and with whom you want. 
The more control you have over how you can spend your time, the more freedom you’ll have. 
There are certain levels of freedom when it comes to personal finances, and in this post we will define characteristics of those.

Low level of freedom
– You hate your job, but have limited professional skills and a lot of expenses
– Coworkers that you don’t really want to spend any time with
– Limited personal development through work
– Health problems because of work
– Paycheck to paycheck, financial worries
– Credit card debt, mortgage and/or family to pay for

Low to medium freedom
– You like your tasks at work and coworkers most of the time
– Salary covers more than monthly living expenses
– Showing up to the same office/building almost every day
– Driving in traffic to and from work (wasting time)
– Limited amount of vacations, maximum five weeks per year
– Skips physical activity because of workload and feeling exhausted
– Debt and/or family to pay for
– Lifestyle creep
– Boredom

Medium freedom 
– Fully remote job, can live where you want
– Living well below your means
– Income from side hustle
– Saving and investing
– Dependent on paychecks from employer

High level of freedom
– Owning a highly profitable online business 
– Saving and investing more than 50% of net income
– Can work less than 20 hours per week
– Multiple streams of income

Highest level of freedom
– FatFIRE (net worth of more than five million usd)
– Sold your own business and/or had some luck investing
– Can spend all the time you want with family, friends, on hobbies, traveling, sports, volunteering, real estate portfolio etc.
– Great physical and mental health