Do you believe achieving financial independence is out of reach for you? A recent Center For Financial Innovations study found that only 28% of Americans are financially healthy due to factors such as the generational prosperity gap, increased costs of living, and market instability.
Podcaster, blogger, money coach, wife, and mom of three Jamila Souffrant believes no matter where you are along your journey, financial independence can be possible. Jamila is the founder of Journeytolaunch.com, an online platform where she shares her journey to reach financial independence and helps others gain clarity around their finances and create an actionable plan to reach their own financial goals.
At age 31, while pregnant with her first son, during a four-hour commute home, Jamila had an epiphany that would change her life trajectory. After climbing the corporate ladder and building a six-figure career in real estate investing, Jamila realized that she was "toiling away at a job" that wasn't for her.
Over the next few years, she became immersed in the financial independence world, built Journey To Launch, and started an action plan to reach financial independence by age 40. Because of her money habits, Jamila and her husband were able to save $169,000 in just two years and are currently debt free besides their mortgage.
I had the chance to chat with Jamila about how she's currently navigating her financial independence journey and tips she has for others looking to invest in their financial futures.
Here are Jamila's three keys to financial independence success:
1. Commit to understanding the practical.
How do you calculate your financial independence number? Jamila recommends a simple formula: Multiple your annual expenses by 25. This is the amount you'll need in order to reach financial independence. Once achieved, you can draw down on that portfolio every year at a 4% rate to return your annual expense amount. Basically, you should be able to live off your saved investments so you don't have to "actively" work again.
Take time to understand the underlying principles and formulas that will make financial independence possible.
Learning to budget and track your expenses is one of the foundational pillars of any good financial independence plan. The more expenses you have, the more you will need to save or invest in order to reach FI. If you can widen the gap between how much you save and spend - you can reach FI sooner. According to Jamila, you'll either need to aggressively curb expenses or find ways to make more money that you can later save and invest towards your financial independence goal.
Are you maximizing all investment opportunities? In Jamila's case, an early career property purchase proved to be a positive asset in her long-term investment portfolio. Furthermore, her and husband's ability to invest in multiple pre-tax retirement accounts due to his status as a NYC public school teacher also helped increased the couple's financial independence funds. Research all potential investment opportunities and make sure you're not leaving money on the table.
If you're not familiar with savings and investing strategies, conduct online research or seek out a certified coach to help.
2. Mindset is everything.
As with any important goal in life, if you want to reach financial independence, you have to believe that you can accomplish it. You have to believe you deserve the life you're dreaming of.
For Jamila, this was a muscle she had to build. After the birth of her third child, Jamila decided to leave her corporate position and work full-time on growing the Journey To Launch platform. After having invested in building a successful career in real estate investing, why disturb the status quo? What if this new venture failed? Though she had already charted her financial independence path, she knew that she had to "leap and net would appear."
"Go after your goals even if it scares you," Jamila urges.
Getting initial buy-in from her husband was hard, but through detailed plans and spreadsheets, she was able to help him see how this new lifestyle would positively affect the family's future. "If you got to make that left turn, when you thought you had to make that right turn, it's okay. The biggest thing that we all can do is keep going."
Investing in the dream to build Journey To Launch may allow Jamila and her family to reach their freedom mark sooner than planned.
3. Keep yourself inspired and motivated.
Jamila urges us to remember to not compare our journey to others. The path to financial independence is unique and it's possible to achieve more or less than your original goal.
As you plan how long financial independence will take you, it's important that you keep your goals relative to your unique financial circumstances.
Immerse yourself in the community. Through podcasting and frequenting conferences and financial-independence focused events, Jamila found that it was encouraging to meet "regular people" just like her who are reaching financial independence.
Instead of seeing money as scarce, Jamila wants her community to see it as "a tool" to get you want you want in life.
"How you manage the money you have now is extremely important because it will allow you to live the type of life you want to live. Because so many of us start out in a deficit (debt, not having a lot of money growing up), [pursuing financial independence] can be overwhelming."
When you start understanding how being money conscious works and how it puts you in a better position - other things, such as increased financial security and even day-to-day confidence can surface in your life as well.
To learn more about Jamila's financial independence journey, listen to her story on episode 181 of the Dreams In Drive podcast.
Featured image via Jamila Souffrant.
Originally published December 3, 2018