CAREER CONTRARIANS Part 2 of 2: FINANCIAL INDEPENDENCE by Candi Strecker Published May 12, 1997 Don't miss part one of this series!
So far I've described two subversive strategies that Career Contrarians use to wriggle out of the clutches of the work world, freeing up their time and energy for personal goals. One is frugality, living below their means in order to generate some savings every month. The other is alternating work and play — sticking with a job until they save enough money to cover their living expenses when they switch to doing something they love for awhile. Now imagine combining these methods into a long-term strategy. Instead of working continuously for 40 years, wouldn't you rather work and save for twenty-some years and then take the rest of your life off? That's the end result of the most radical Career Contrarian strategy of all: Financial Independence. Financial Independence Day arrives when you save up a chunk of money so big that you can live, frugally, on just the interest it generates. In other words, you stay home and the money goes to work and hands you a paycheck. And you don't have to be a millionaire to do it. A million dollars, earning 5% per annum, would indeed generate a very comfortable income of $50,000 a year. But you might be willing to live on a lot less, especially if it means freeing yourself from bosses and alarm clocks sooner. If you can survive on $15,000 a year, you'll only need to accumulate $300,000 of savings to create that interest income. And that's an attainable goal. Let's do the math! Say you're twenty-five years old and earn $20,000 a year from an entry-level job. Let's also say you've got no debts and you're a serious penny-pincher who can live on $15,000 a year while stashing the other $5,000 as savings. (That's $417/month out of $1667/month gross.) Through The Magic Of Compound Interest (folding in all the interest your savings earn along the way), you can have that $300,000 in just over 28 years, at age 52. That may sound remote to you now. But look at it this way: you were probably going to work for the next 28 years anyway. This way, at the end of it, you have 13 years of freedom ahead of you, instead of 13 more years of work. And that freedom doesn't end after 13 years, because your "retirement" years after age 65 will be funded by the continued interest income from your savings — not by the ever-more-uncertain federal Social Security program.
You don't have to be a millionaire to live frugally on interest income.	I've tried to make this example as simple as possible, to show that Financial Independence is not out of reach for an ordinary person who's willing to make some sacrifices. You might not be able to begin such a severe savings program tomorrow. But you could sock away twenty bucks from your next paycheck and gradually catch up later. In the next few years your income will probably rise, and saving that much per month — or more — won't be nearly as painful. With an attractive goal like full financial freedom beckoning you, you may even be motivated to get there ahead of schedule. To get a feel for the way consistent savings can mount up over time, try out Tripod's Retirement Calculator, a handy compound interest gizmo that lets you plug in different monthly contributions, time frames, levels of risk, and graphs your ultimate savings goals. Whether you're trying to escape the work world entirely or just hoping to take a year off someday, some excellent books can help you map out your Career Contrarian path. The most comprehensive guide to controlling your financial destiny is Your Money or Your Life, by Joe Dominguez and Vicki Robin (Penguin Books). This book convincingly describes how, why, and when a person could achieve Financial Independence. I could do without their New Age jargon about "valuing your life energy" and "transforming your relationship with money." But the authors are right on target when they challenge the assumptions most of us make about status, stress, security, and the everyday trade-offs between time and money. In Simplify Your Life and Living the Simple Life (Hyperion), Elaine St. James takes a hard look at whether frantic careers and consumer goodies really provide us with a "good life," or just get in the way of our doing what we really enjoy. Both books try to help readers jettison habits and possessions that eat up time, money and energy. Some of her tips (like "Sell the damn boat!" and "Get rid of your cell phone!") seem aimed at baby-boomer yuppies having midlife spiritual crises. But most of her sensible suggestions could apply to anyone.
Further Reading: Your Money or Your Life Simplify Your Life Living the Simple Life The Tightwad Gazette	The best all-purpose guide to living frugally is Volume One of Amy Dacyczyn's Tightwad Gazette (Villard Books.) (Volumes Two and Three are good too, but they build on the basic principles introduced in the first book.) It's a meaty compendium of useful tips for saving money on food, clothing and shelter, based on her experiences in maintaining six kids and a husband, thriftily but comfortably, on $17,600 a year. What all these writers agree on is that there's more to life than work and money. That's good advice, whether you choose a straightforward career or a contrarian one.
Raised on a gladiolus farm in Ohio, Candi Strecker now thrives on double lattes, Vietnamese food and flea-market shopping in San Francisco. She is currently a freelancer for publications including the San Francisco Bay Guardian and SLANT, after many years of polishing her writing skills on her zines, Sidney Suppey's Quarterly & Confused Pet Monthly and It's A Wonderful Lifestyle (the definitive zine on the 1970s). © 1997 Candi Strecker, All Rights Reserved.