Financial Independence

[Sojourn]

Ever since I found this site I have been thinking about the direction of my life. I don't want chase the "American Dream" as in the white picket fence, 9 to 5 job etc... Since I am still young I have been looking into becoming financially independent. I want to become financially independent so that I can pursue my dreams, and aspirations.

The problem is I don't know where to start. I don't know much about stocks, investing, etc... , but I am willing to learn. If anyone could provide me with good books, or links it would be much appreciated. If anyone knows anything about stocks, investing, or becoming financially independent please post. If you know anything about how to become financially independent please post. Any help would be appreciated.

 

[DogFashionDisco]

The good thing is, you're thinking outside the box.
The bad thing is, you're far from alone.

There are many ways to becoming financially independent, other than just investing. But before you begin figuring that out, you need to do and realize two things:

Read Think and Grow Rich by Napoleon Hill. Of all the motivational books out there, this is the best. This is the one that started them all. And this is the only one you need.

Realize that becoming successful in any part of your life requires 3 things: Determination, Motivation, and Self-Control. If you really want something in life, you can get it. The only thing stopping you is yourself. You'll learn about this in the book that I mentioned.


Finally, have fun. Don't think of whatever you plan on doing as a chore. Think of it as a journey of self-discovery. Because that is what it is.

 

[Wiesman44]

the stock market is not a get rich quick scheme. In fact, most people lose money trying to dabble in it.

 

[Sojourn]

the stock market is not a get rich quick scheme. In fact, most people lose money trying to dabble in it.

I'm not really trying to get rich quick. I know this will take time. That is why I want to start learning now so that when I am 50 I would be financially independent. I know this is going to take a lot of hard work on my part, and I'm ready for it. I also know there will be tons of risks I also believe I'm ready for that. I just want to have a solid foundation of knowledge. I don't want to jump into this without knowing what to do. So if anyone could post some advice, books, links etc... to help me get started please do so.

 

[wayword]

The real key is positioning.

Thinking ahead of the curve and getting in on the ground floor of each Next Big Thing. Whether it be dot.coms, real estate, etc.

You want to pick the next big wave and get in before everyone else does and it runs into shore.

This requires foresight and mobility. And you have to be a trend LEADER, not a Johnny-come-lately FOLLOWER.

Right now, I would say domestic stuff is going down, but foreign currencies and economies like China & India have a lot of upside. Also, energy and precious metals as hedges against an overinflated USD. And not to mention defense companies due to the war...

 

[Vypros]

1. Pick up a copy of ALL of these books and read them:

The First Book of Investing by Samuel Case (<<---awesome book)
The Total Money Makeover by Dave Ramsey
24 Essential Lessons for Investment Success by William J O'neil (founder of Investor's Business Daily, which is a magazine and a website both of which you should read religiously)
America's Cheapest Family Gets You Right on the Money by Steve and Annette Economides
The Millionaire Next Door by Thomas Stanley

2. Pull out ALL your bills, get them together and figure out what your outflow of money is each month. Look at what you are paying for (buy a copy of MS Money and put it into categories so you can see it in a pie chart). Include things like beer, cigs, food, gas, groceries, eating out, etc. Once you've done that, analyze what you can cut back on (this won't be an easy road for you and is going to involve some sacrifice).

3. Find ways to increase your income. If it means working two, three jobs then do it. Or you can do freelance work on the side, odd jobs in your neighborhood, ANYTHING that you can do to increase your income.

4. Set up a savings/investment plan NOW. Don't wait until you are out of debt to do it. But if you ARE in debt, focus mostly on the debt first until you are out. Even if you are putting $25 a month into savings, it's better than nothing until you can remove the debt. The idea is to get into the HABIT of saving on a regular basis. The amounts will get larger the more you form the habit.

5. GET OUT OF DEBT. Don't take on any new debts. Get rid of your credit cards (cut them up and throw them away). If you think you NEED a card, get a SECURED credit card that is secured with your own cash. Don't take out loans to buy cars (pay cash, and buy slightly used). Don't take out loans to buy TVs, gadgets, etc. In short, don't take a loan for ANYTHING but perhaps a house, and even then go with a 15 year, fixed rate mortgage.

6. Make sure you budget yourself some entertainment money. Don't kill yourself or stop enjoying life just because you want to be financially independent. Have a little fun and reward yourself once in a while.

7. Hang around financially independent people. If all your friends are poor, you will by default find yourself taking on THEIR habits.

 

[DarthAngel707]

The truth is most people start with 9-5 jobs to accumulate at least a decent amount of money before borrowing money from investors.

You don't start from a millionaire if you didn't even get a first job yet.

 

[mpimpin]

education

 

[ketostix]

the stock market is not a get rich quick scheme. In fact, most people lose money trying to dabble in it.

I think this is true. Seems like the only people making real money in the market is the brokers and insider types and those with a lot of money to leverage.

 

[WORKEROUTER]

Biggest thing is mentality. You need to start thinking like rich people which is easier said than done.

Great book: Secrets of the Millionaire Mind

You need to get a vehicle to make money. Tons of ways to make money but if you try to do everything at once nothing will really happen.

Get use to sacrificing. I'm making a lot more money right now more than I've ever made and see more coming in but its been pretty stressful too.

 

[Sojourn]

Thanks for the input guys. Vypros I'm checking out some of those books out today. If anyone else wants to chime in go ahead.

 

[Evzone]

Ok a lot of what I was going to say was already mentioned. The books that Vypros mentioned are great.

Look, when it comes to investments, I could write pages on end on what to do and what not to do, but here's the 2-minute version: get a legit job and unless you are really interested in things like finance, economics, and markets, stick to conservative investments. The books mentioned can guide you well.

You'll here people like me or others on this forum talk about things like options, technical analysis, emerging markets, and other speculative things. Just remember, the stock market is not a game. It's a fun job working in the markets, but it's still a job that you have to take seriously and bring your A-game to, or you're going to get burned. Not to scare you away if it's what you're interested in, but a lot of people just don't have the passion to be a full-time investor, and that's perfectly fine.

Put together some money doing whatever it is that you are good at, always have an emergency fund, don't run yourself into debt buying unnecessary crap, and build a diversified portfolio.

 

[synergy1]

staying out of debt and understanding how you can maximize returns on what you own are how you get financial independence. Some people love only stocks, only futures, combination of stocks, bond and option writing...whatever works for you go with it. Everyone will have a separate opinion, and thats fine. There is more than one way to skin a cat.

They key is to get educated, as someone said. It takes time.

 

[RedPill]

Broken down to the most simplistic, general answer of 'how to do it', create a scenario for yourself where passive inflow supports both your personal and business overhead. From there, your survival needs are no longer a function of your time, and you are free to devote significantly greater time and energy toward the long-term activities which will ultimately increase your capitalization level (e.g. education, development, research, saving & investing, etc).

 

[Unplugged]

Sojourn, there have been some great suggestions so far to get you started. The main thing is to keep learning by reading, talking to people, and through action.

I highly recommend "Missed Fortune" by Douglas Andrew. I'm pretty dissatisfied with 401ks and other traditional retirement planning strategies, and this book offers another path while discussing some of the problems with the more common views on retirement planning. It also talks about and compares various types of investments.

While it won't get you rich quickly, it offers some solid ideas about personal finance.

 

[GQ_Confidence_1]

-Read about successful people.

Most books on "success" are just too simplistic IMO to be of any real use. There's too much variance across the country for there to be one "magic secret" for everyone.

Jim Rogers for example is a very successful investor. I first bought his book, Investment Biker, about 6 or 8 years ago. One of the problems of being a novice, or just getting started, is you dont know what to believe or what to spend time on. It takes a long time to come around to the right concepts, or the right model.

I use to have a bunch of books on trading, subscribed to thestreet.com, etc, charting services. Got rid of all of them. Why not study one person who's really successful?

He sold his house in New York for $15 or $17 million a few years ago. Publicized in new stories, etc. There's so many authors that are rank amateurs, or who are only after the books fees, or speaking fees, why mess around so long with them.

I think if you go deep with one person that's successful, you'll come up with better concepts than just "investing" or "stock market". Why he is so much better? What do others do wrong?

That's one approach. Much better IMO than 50 books that are generic and abstract.

-You'll go as far as what you're exposed to. Like with girls, who knew all this stuff in highschool? Some of it is so simple, it's stupid. But you've got to be exposed to it.

-You need better habits. Replace tv with books, you'll get smart pretty quick.

-I wouldn't worry about "passive" or "active" or any other type of income. Money is money. A lot of it is just semantics.

-Go for the real meaty stuff. Don't waste time on 2 or 3 star books. Look at the 5 star books on amazon, and read what other people have got from them.

-Look at trends and what's going on in the world. People get fooled all the time by things, they think its a "sure thing".

Like real estate going up forever.

Or having a store in a mall in the 80's. Seemed like a sure thing. Or a video store in the 80's, everyone has to rent a movie. But things change, and people don't see it.

Mrs Fields Cookies went bankrupt the other day. Something to think about if you want to invest or start a business. Why? Gas, and declining foot traffic at malls, and all kinds of things.

Its a big subject, but a few ideas.

 

[GQ_Confidence_1]

Also, from studying successful people in depth, you start seeing some patterns emerge. Things you won't see in more generic success books.

For example, Jim Rogers, an investor, and Claude Hopkins, a copywriter in the early 20th century. Hopkins books, "Scientific Advertising" is considered a bible in advertising, selling. He made a fortune in the 1910's, 20's. 5 star book on amazon.

They both think that college is a waste of time. They both think success in their fields is "common sense". They both talk to people on the street. Hopkins went house to house learning what people buy and what their reactions were. Rogers, in his travel/investment books, talks to people on the street to learn what's going on in a country before investing. Hmmmm. They both understand human nature.

You get more context. One of the problems with just reading, is, you see things in isolation, like "this is a good way to do it", or "this approach works". But you don't have anything to compare it with.

There are some other lines, like in Reminsicences of a Stock Operator. Another highly touted investing book. Written back in the 20's. You start seeing some patterns emerge.

I think alot of stuff on success, making money, Jim Cramer on tv, etc, they're short term fads. Alot of these authors. They don't see the bigger super cycle in play. They're too gimmicky, it's like the fad diets. A few years ago, low carb was all the rage. Then it's something else. Jumping from fad to fad you wont get anywhere.

But some of the books, Millionaire Next Door, or books on saving money, those are good.

 

[OzyBoy]

You have to think a bit differently than normal about things.This is what i have been thinking for a while now and just starting to do. Forget about many of these stupid "dreams" i think you could be so much better off if you go about things the right way.

 

[SinJester]

Hey thanks for all the recommended books guys!

 

[gösta berling]

- Sojourn

There are only two ways people become wealthy investing. You can compound your savings over a long period of time(my choice), or you can buy into the early stages of major bull markets. Right now we're in a major bull market in commodities. So for example, if you bought some oil, uranium or potash companies seven or eight years ago, you would be wealthy by now.

This is my list of the best investment books I have read.
Read them and OWN the knowledge, and you'll do well.


http://www.amazon.com/Intelligent-I...=sr_1_2?ie=UTF8&s=books&qid=1220802467&sr=1-2
http://www.amazon.com/Uncommon-Prof...=sr_1_1?ie=UTF8&s=books&qid=1220802516&sr=1-1
http://www.amazon.com/Single-Best-I...=sr_1_1?ie=UTF8&s=books&qid=1220802550&sr=1-1
http://www.amazon.com/Reminiscences...=sr_1_3?ie=UTF8&s=books&qid=1220802596&sr=1-3
http://www.amazon.com/Warren-Buffet...=sr_1_1?ie=UTF8&s=books&qid=1220802870&sr=1-1
http://www.amazon.com/One-Wall-Stre...=sr_1_1?ie=UTF8&s=books&qid=1220802999&sr=1-1
http://www.amazon.com/Beating-Stree...=sr_1_2?ie=UTF8&s=books&qid=1220802999&sr=1-2
http://www.amazon.com/Richest-Man-B...=sr_1_1?ie=UTF8&s=books&qid=1220803059&sr=1-1