Striving towards financial independence

When I look back at my life, the person I am today did not form out of any single defining event.  I didn’t have an “aha!” moment or an inspirational occurrence that has shaped my existence.  Instead, where I am now is the product of many, many small steps.  Sure, behind those steps are still the driving forces that define me and my personality.  And yet, I can imagine that if any of those steps were removed, I might be a very different person in a very different situation.

Photo Credit: D Sharon Pruitt via Flickr

Photo Credit: D Sharon Pruitt via Flickr

Thinking about my current job, for example.  I only got the interview because I was willing to put myself out there and email the recruiter to set up a coffee one-on-one rather than trying to talk to her after her presentation.  Well, I was only confident enough to do so because I had done so many interviews with other companies.  And I had only interviewed so much because I am very driven to be always being employed (when I want to be).  Aaaaand I’m paranoid about my ability to be employed because I have seen my parents struggle with employment and money.  And so on and so forth.  I can easily imagine that if my parents had been more careful with their money or more steadily employed, I would not be so driven to be good at getting jobs.

So when I think about Financial Independence, I suspect it has more to do with the small steps than the large ones.  Being able to pay my bills and not *have* to have a job is an important goal for me.  I want that flexibility!  Sure, I might still want to keep working – but I want the option of quitting work if I feel like it.  This is a Big Goal, kind of like getting an awesome job!  But I’m not likely to receive a life-changing inheritance or win the lottery.  I probably won’t strike it rich in stock options or be the CEO of a hot new start up.  But I can do the small things that get me to a place where I am financially independent.  We are approaching it from a few different angles:

  1. As of today, Brian and I earn an average of $45 in dividends per month.  It doesn’t seem like much, but it’s enough to pay our cable and internet bill every month.  Even better –  it’s a rising average.  We started the year at $28 a month.  By next month, it’ll be over $60.  Our goal is to get it to $100 a month by the end of the year.  It’s all part of the master plan.
  2. We also rent out our first condo.  When we bought the condo, we took out a $250,000 mortgage.  That mortgage is down to $225,000 – most of that thanks to our renters!  Again, it doesn’t seem like a lot.  But it means that we can sell it right now and get $25,000 (closer to $15,000 admittedly, after fees and whatnot!) that we didn’t have before.  And we’re planning on holding onto it for a while yet.
  3. We are also frugal.  We only spend $200 a month on food.  We pay $35 a month for cable and internet.  I wash out ziploc bags, damn it!  And it’s not because any one of those things will help me get rich.  But all together, all the small steps – it lets me save 45% of my net income.  And that’s just me!  Brian’s doing a pretty good job too  😉

Of course, I don’t know if doing any of these things will guarantee that I’ll be able to get to Financial Independence.  They are small steps in the grand scheme of things.  But hey, so was deciding to email a recruiter to go for coffee.  🙂

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  1. Pauline says:

    Thank you guys for participating! Your small steps are adding up quickly and before you know it, you’ll be running.

  2. I, too, feel like a large driving factor behind my desire for financial independence comes from growing up in a home where we were not. My parents never left me wanting for anything (except all the unreasonable things kids always ask for, but they made sure we were in good schools, had a roof and food, etc.) But it’s taught me to avoid debt like the plague.

    • CF says:

      I wish I had learned the debt lesson too :p Even though I’ve always been keen on employment and working hard, I never really got on board the debt-free train until the end of college.

  3. I loved hearing that you got your current job because you were brave enough to email the recruiter for a one-on-one! That’s awesome!

    • CF says:

      It was really random too since I was employed at the time and only knew about the recruiter’s visit because I happened to be employed by a university. And I almost didn’t go because I was viewing condos that same day. I’m so glad I made the time for it!!

  4. Not many people can say that they have goals let alone can write out what they are currently doing for their future. You are far ahead of the rest and I’m sure you and Brian will be in a great spot if you all of your cards fall where you need them to fall. Have a lovely day mates.

  5. I’m a total believer that all those little things really add up and it does make a big difference in the end. Good for you guys!

    • CF says:

      Little steps are important, I think. It’s too hard to always think of things in terms of the big picture goal. Better to break it up and try to accomplish the little things one at a time.

  6. It’s interesting what you say about the small things and how they impact what you value, one thing I worry about with Financial Independence is the example my wife and I will set for our kids (none yet, but planning for some) and specifically how it will impact what they value. They’ll grow up during the ‘easier’ FI stage and miss the ‘harder’ wealth accumulation stage.

    Glad to see that even though your parents struggled, which sucks, it positively impacted your values. Which means it wasn’t all for naught.

    • CF says:

      Maybe you could encourage them to “struggle” a bit, by limiting their allowance and getting jobs during the summer while they are teens? I was very motivated to get a job as a teenager because I never had any money from my parents to do things with my friends!

  7. This puts my financial independence post to shame. I should have really put more thought and effort into it. I even told Pauline “not my best post…but good enough.” I think it’s so awesome you get even a little money from dividends! We rent out our basement and I see that as something we’ll do probably for the next five years at least. It helps cover some of the bills and some of the mortgage, and leaves some money left over for future upgrades that we want to make every time we switch renters (or if they sign on for another year we want them to know we will do SOMETHING to improve it each year). Honestly I would love to have dividend income become a huge chunk of our monthly income, but it’s definitely a long-term plan (I still have to check out this master plan of yours, perhaps it is similar to ours?).

    • CF says:

      I want to be able to rent out a part of my home soooooo much. I love the potential flexibility of that arrangement. However, it is not possible in a 500 sq ft condo! Maybe in a few years.

      Definitely check on the master plan – we’re on track!

  8. Hey there, Sometimes it’s easy for me to lose of all those small steps that led me to where I am today. I can feel like I’ve been stuck in the same place for years on end – even if there’s a solid proof to the contrary.
    Good for you guys for taking stock and appreciating all the little steps in between – like earning enough from dividends to pay your cable bill. That’s awesome!
    Thanks for this reminder!

    • CF says:

      It’s easy to lose sight of the small steps. It’s really interesting when you do look back on them though… I never would have though I’d end up where I am today, but those steps totally contributed.

  9. I think baby steps are key to surviving a healthy financial life. It’s a little like healthy living…anything that is too extreme on either side is dangerous. You guys sound like you’re on a great path!

  10. LOVE this, CF. So many “unsuccessful” people think that success comes overnight, or is simply handed to “successful” people, when in fact, 99% of the time, those successful people took many, many small steps to get to where they are. Success, financial or otherwise, is more about the commitment to continue making those small steps, as you’ve shown above. Wonderful post!

    • CF says:

      Thanks Laurie! It’s easy to get down and discouraged when you only think about the big picture goal. It always seems so far away. For me, doing small things definitely keeps me motivated.

  11. Jim says:

    I thought I was the only one to wash out zip lock bags! Kinda funny, I just see no need to throw away a perfectly good bag that had a sandwich in it. In school I used to fold up my brown paper lunch bags and reuse them too!

    • CF says:

      Exactly! If it can still be used, why waste it. When it’s just veggies or fruit, it’s easy to quickly rinse it out. Ideally I would use a reusable container, but sometimes it’s nice to have a ziploc bag instead.

  12. This is such an awesome post. Definitely the small things matter and they have shaped who you have become. All those months that I paid off debt I put every single extra money towards my debt and now I can finally see what it’s led to!

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