Have you put everyone’s needs ahead of you own for years, maybe decades? Maybe you were a single parent or had to pay for university and every penny you had was used. Now, you’re 50 and terrified that you don’t have enough saved for the future. Most of us gen-xers find ourselves in this situation but it’s okay, we are still breathing which means there is still time. Let’s talk about FI and how we can begin our journey after 50+……..

Financial independence, often referred to as “FI,” is a financial state in which an individual or household has accumulated enough wealth and resources to cover their living expenses and maintain their desired lifestyle without relying on active employment or a traditional job.

It represents the ability to support yourself financially, typically through passive income, investments, savings, and other income-producing assets. Financial independence provides you with greater control over your time, choices, and life goals. Some of you may choose to continue working beyond the traditional retirement age, but FI gives you the freedom to work on your own terms or in a field you are passionate about. Starting your journey to FI at 50 or older can be challenging but certainly possible with careful planning and disciplined financial management. Here are steps to begin your journey to financial independence:

MINDSET

The first step to beginning your FI journey at 50+ is something that is often overlooked and that is mindset. Beating ourselves up will not change the past but if you think that your financial situation will never get any better, well, you are correct, it will not! Ever heard “As a man thinketh in his heart, so is heâ€- Proverbs 23:7 . In her book, “Mindset,” renowned Stanford psychologist Carol Dweck says that it’s not intelligence, talent or education that sets successful people apart. It’s their mindset, or the way that they approach life’s challenges. On your journey you may encounter shame/regret for past decisions but remind yourself that if this was easy, everyone would be doing it.

TIME

The second step to beginning your FI journey at 50+ is time. You may be thinking that you don’t have enough time to become financial independent but you need to take something else into equation – these are your peak earning years. According to compensation research firm PayScale, full-time employees with a bachelors’ degree tend to make the most money in their 40s and 50s – known as your peak earning years. Employers are willing to pay more for experience and creating a side hustle is more doable as you have the knowledge, talent stack & quite possibly the time. Remember, there is a limit on how much you can save but there is NO limit on income!

CURRENT REALITY

The third step to beginning your FI journey at 50+ is to know your current financial reality. This includes calculating your net worth (assets minus liabilities), review your income, expenses, and existing savings. Ensure that you have and keep your emergency savings, so you will not have to depend on credit cards or loans for life’s hiccups.

FUTURE REALITY

The fourth step to beginning your FI journey at 50+ is to educate yourself so you can define what financial independence means to you because personal finance is PERSONAL. Are you aware that your financial independence number is not some uber scientific calculation, it’s really just a numbers game and a savings rate is important to those of us that got a late start. Mr. Money Mustache did a great job explaining this concept, check out the link: https://tinyurl.com/mwhuwcwk. Establish specific goals and a timeline for achieving your FI number.

BUDGET AND DEBT

The fifth step to beginning your FI journey at 50+ is use your comprehensive budget to aggressively pay down debt. Identify areas where you can cut costs and allocate more funds toward saving and investing. Should you downsize? Do you need to tell your adult children “no”? Do you need to increase your income? Does this require deprivation? Absolutely not, at Enjoying the Journey, we truly believe in the ‘enjoying’ part, so get creative.

AGGRESSIVELY SAVE AND INVEST

The sixth step to beginning your FI journey at 50+ is to create a saving and investment plan. Contribute the maximum allowable amount to retirement accounts and other tax-advantaged savings plans. At age 50, you can make catch-up contributions, which allow you to save even more. If you are not sure where to get started, I recommend reading JL Collins’ book “The Simple Path to Wealth”. Of course you can consider paying for an advice only financial advisor. Based on your risk tolerance and retirement timeline, determine which invest strategy is right for you.

PATIENCE AND PERSISTENCE

The final step to beginning your FI journey at 50+ is to remember it will take time, so be patient, give yourself some grace and stay committed to your goals. Consistent saving and investment over time will yield significant results but don’t compare your journey to others. You may not be able to retire early or retire with millions but that is not the goal. The goal is to have greater control over your time, choices, and life goals.

Achieving financial independence is a journey and everyone’s path is unique. While beginning late may require sacrifices and hard work, it’s possible to make progress toward your FI goals with dedication and smart financial planning. Adjust your strategies as needed, stay informed of financial news and trends, as well as changes in tax laws and stay focused on the long-term benefits of financial independence.

Remember to keep Enjoying the Journey.