Lately, I’ve been dreaming a lot about “What If”. I have been dreaming big dreams. After crunching some numbers the other day, I figured out that if nothing changes in my income and expenses (which is obviously not going to happen), I may be able to reach financial independence within 9 years. No, I don’t make a ridiculous amount of money. No, I don’t live in my mom’s basement, or even with roommates for that matter. No, I’m not hiding money or lying, cheating or misleading anyone. In fact, I’m just a regular guy who works full time, tries my best to add value for the company I work for, lives in a modest one bedroom apartment and lives on less than I make.

I don’t believe in get rich quick schemes. I don’t believe in playing the lottery. I don’t believe in winning the jackpot at the casino. I don’t believe in waiting for your parents/grandparents to die to receive a fat inheritance check. What I believe in is hard work, persistence, a positive attitude and sacrifice. I believe in deciding what kind of life you want and then rolling up your sleeves and making it happen. That’s exactly what I plan to do.

Here’s what the past 4 years of my life have looked like:

past 4 years - finances

Four and a half years ago, I had a negative net worth of 3-6 months of expenses. That means that not only did I not have any money if something were to happen to my income, but I owed money to others. Yuck. Today, I have around 3.25 years (39 months) of living expenses in liquid investments and a very nice, paid for car. I gave up on a lot to get here and it’s just the beginning of where I’m going. The key to the past 4.5 years was being dedicated, persistent and driven. It has been a long, slow, boring road, getting where I’m at.

Do you notice how my chart is starting to really take off? Last year, I earned more than I’ve ever earned and I started investing. I’m expecting that I’ll now get a little help from Mr. Economy. I’ve invested in index funds at the recommendation of Mr. Money Mustache, jlcollinsnh and other books/blogs that I’ve read this year. It seems like a logical thing to do in my situation, today.

Assuming the continuance of a savings rate of over 50% (which I’ve done for the past 2 years), combined with an estimated 8.4% annual return on my investments, I may be able to reach financial independence (a level where income from my investments surpasses my living expenses), at right around 9 years from now. If my estimated rate of return is too high for you to be comfortable with, let’s just push my estimated financial independence date out a couple more years. Also, I have not factored in any raises or additional side income, which I’m intensely working on generating. Here’s the graph:

future 9 years - finances

I don’t know about you, but this chart is both exciting and scary to me. It’s exciting because wow, there’s a real chance that I could reach financial independence, something that many people only dream of, in my late 30’s. That’s exciting. It’s scary because holy crap, I will have to work my butt off and sacrifice like crazy for 9 more years. That’s almost 1/3 of the amount of time I’ve been alive so far. I can hardly wrap my mind around how much time that is. Can I do it? Yeah, I think so.

Inside of 9 years, all kinds of things could happen. I could get married. I could have kids. I could buy a house. I could switch jobs once or many times. I could build a business from nothing and do what I love every day while making more money than I do now. I could lose income and backtrack, stopping me from making this happen. All sorts of things are possible as the future is unknown. Anything can happen in 9 years. I have no idea what my life will look like 9 years from now. But there’s a small chance that it will look like what the graph above says. I just might be able to pull it off.

At first, I felt a little nerdy for doing a calculation like this, but then I came to the conclusion that we all should be doing it. Why wouldn’t we all want to make this happen in our lives? Okay, so we all want to be financially independent in our lives. That’s a no brainer isn’t it? That’s like asking if we all want to be healthy. Of course we do. Just like it, we all want to be taken care of. We all want our needs met. We all want to eat, have a roof over our head, keep the lights and heat on. We want to provide for our family. No one wants anxiety or worry about how we’re going to do that. So the bottom line is, we all want financial independence. My question to those who haven’t calculated when you will reach it is, why not?

Are you under the mindset that you will retire when the government says you can? Why? Are you under the mindset that social security will be gone when you get older and therefore you will never get to retire? Why would you think you can’t retire without social security?

I’m wondering if us young adults (20 somethings) are getting brainwashed to think that we shouldn’t try for early retirement/financial independence because it’s just not possible. Why do we believe it’s impossible? It’s just a matter of living below your means, investing the difference and making financial independence a priority in your life. I don’t think it’s even up for debate whether or not most of us can make it happen in our lives. We just can.