I’m totally debt free and I wrote an article about it called “Stop Drowning in Debt, Start Swimming To Shore” and then in a follow up article called “Progress on Achieving Financial Independence – Swimming To Shore“.  And now, I feel like it’s time for an update on my process towards financial independence yet again!

Right After Being Debt Free

At first, It was incredibly exciting being debt free, but also sad in that it wouldn’t be easy like it was when I was climbing upwards out of debt.  Now I know many of you think that debt is a hard thing to conquer, and admittedly, it’s not easy, I consider it easier because the payment are easy to record and predict when it will be paid off in a spreadsheet and for the following reasons!

1. While I invest in the stock market, when I paid off my house mortgage  and car loans, the market out-and-out sucked!  In my 401k, my balance was down considerable and nobody want to invest money in a market that might be down for ten or so years…
2. There was the risk of slipping back and going into debt of other sorts.  What if I lost my job during the “Great Recession”?  Or I decided to slip and reward myself for accomplishing the feat of being debt free?  It’s a slippery slope to slide down and be in debt again!
3. At first the time I put in managing my increase in money from being debt free meant that such time would be less than minimum wage… Hmmm, actually it was really less than a dollar per hours for time invested.   Plus all I know to do then was invest the money in the stock market (which I was already worried about), or invest it into side businesses.

Needless to say that figuring out what to do with my money (albeit small at first) was a challenge in a difficult time.  I think if the stock market was still rallying like in the past years, the options would have been a lot easier.

Finding My Financial Path

Since the financial markets were such a mess, I did decided to at least invest some of my excess money in the stock market.  Now this might not make sense, but when the market is down and everybody is pulling out their money out to save their financial nuts, this is the best time to put your money in!  As Warren Buffett says, “Be greedy when others are fearful, and be fearful when others are greedy“, so if the market is down 40%, according to his investing philosophy, it was a good time to invest.  And since he himself was investing in the market at low levels at the time, how could I doubt the greatest investor of current times?

So I increased my 401K contribution and channeled some of my money into the stock market, knowing that Mr Buffett was doing the same!  There was also other saying that made me look at a different path, and those sayings were “Only Fools rush in”, and “Don’t put all your eggs in one basket”.  These sayings are good old common sense and have a lot of merit!  So instead of just investing my money in stocks, I also started thinking of ways to generating money with side businesses.

At first, the stock market kept declining and my side businesses wouldn’t be considered worth it if one looked at my hourly rate (I made a grand total of $5 for the first 5 months).  But I stuck to it and both my investment and businesses improved with time and patience.  While neither the stock market or my side businesses income streams are currently enough for me to retire or quit my day job, I’m now projecting (and hoping really hard) that I’ll be able to walk away from my primary “employed” job in five years if I want to.

Only time will tell, but hopefully in five years (sometime in the year 2017), my “employed” income stream will be optional and you’ll be reading an update about how through carefully planning (and perhaps a little big of luck) I’m at the point where I can quit my “employed” job if I choose to do so.

Bests,

MR