Everybody knows about the traditional family (at least in some parts of the world that I know) where the father is out working, bringing the food to the table, while the mother is at home, taking care of the kids, house, food, and everything else. Even if the global economic crisis (5 major ones in the last 30 years) was taking us to a different gloomy version when both parents need to go to work, in order to cover rent, bills, food, and clothing.
So, there is no option anymore for one parent to stay at home spending time with the children, except for the 6-12 initial months when you use maternity leave. Everybody needs to work lately, some more than others. There is this glorified version of work, when you are the employee of the month just because you gave 50-70 hours of your time every week to the company, putting career before family time, and for this one, I call it complete BS.
Is there any alternative? I may think of at least one, and a specific strategy comes to mind. It all started when I learn about the FIRE movement, financial independence, and early retirement, a move so bold, that it takes a lot of courage to even think about it. These people, the ones wishing to achieve FIRE, have a simple, yet very difficult strategy, involving some numbers and an iron will. In fact, more than a strategy, FIRE is more like a way of life. But more about it later.
How do you do it? First, you need to know your monthly expenses, all of them, and that question is: how much do you spend per month for the entire household? Now, saying that you spend as much as you have available is not the right answer. Let's randomly pick a number, and say that after I factor in the rent, bills, food, clothing, and entertainment, I have £1400 as the result. Do it up to 12 times (once for each month of the year), which means £16.800 per year. Then, it is all about successful investments, as this 16.8K should be the minimum that you receive as interest/dividends. If I find a bank paying 1.75% per year, then the whole amount needed will be 960K, in order to receive all the money that I need monthly, without going to work. This is what they call passive income. At 1.75%, your principal (the whole amount needed that you cannot touch) is 960K, but if you are really, really lucky, and find some investment paying 10%, then your principal needed is just 178K. Of course, I doubt that 10% in interest is quite improbable for an investment that is safe, or even moderately risky. The real numbers for a realistic annual return are more like 4-6% if we are thinking of real estate or mutual funds, in stable market conditions. Remember this, stable market conditions, as the last 4 years were anything else than stable. Even if we talk about crypto, some safe-ish earning schemes using stablecoins provide 1-5% per year. I say stablecoins, as I want to minimize risk, I know that there are other cryptocurrencies that pay much better than this, but learning from the last 2 years, there is the potential of even some successful crypto going down 90% in 12 months or even less.
But yeah, at least on paper, there is a probability of achieving a principal high enough to cover your expenses and stay at home, enjoying time with your kids and seeing them growing up, using passive income in some way or another. My plan is to get enough Hive to do this, and even curate, or, for some more extra time, delegate it. How much do I need? Well, in the actual market conditions, 110K of HP (Hive power) will do the job. 200K of HP will sort me out, ensuring that I live a good life. How much have I got now? 6K, and a few more above that. But, with enough focus and a bit of luck, that sum is completely achievable. I planned to start at the end of the last year and to see how good will work in December 2023. Who's with me?
Why do you want more freedom or choice, and how do you plan to achieve it?
Your newest friend,
George
