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financial independence

Listen up soldiers

I am The Escape Artist and I am here to help you.

If you are in debt or working a job you don’t like, then you are a prisoner. But I can help you escape from the financial Prison Camp that so many of us have been trapped in…often without even knowing it.

Beyond the barbed wire, watchtowers and guard dogs lie our goals: the treeline of freedom and the rail station of happiness.

Freedom and happiness are a lot easier to achieve if you are financially independent. Financial independence (FI) means you have enough money to never have to work again. You are allowed to keep on working if you want…but you can then either politely decline your boss’ less reasonable requests or, even better, be your own boss.

If you think that getting rich is only possible for pop stars, rappers, CEOs and people running hedge funds, then think again. Whatever your current situation, you can always improve it.  Getting rich may seem like a daunting task at first…but even a journey of 1,000 miles starts with a single footstep. I will show you how to start with baby steps.

Why might I be able to help you?

Well, I spent many years in the Prison Camp myself and I know how the system works. I wanted freedom, so I hatched a plan and began to dig.  I paid off my mortgage when I was 32, built up my investment portfolio and then quit my job in 2014 at the age of 43 when I’d made enough not to have to work any more.

I did this whilst married and supporting a family with 3 kids. I also did this without winning the lottery, inheriting money or being CEO of a large multi-national company. Those are my stripes.

The Escape Artist is a highly trained financial commando. I have a degree in economics, I’m a qualified accountant and I had a 20 year career in corporate finance.  But the stuff I teach on this blog and in coaching with clients can be made simple enough for anyone to put into practice.

Although escaping aged 43 isn’t bad, I could have done much better. If only, aged 21, I’d had access to the wisdom of an experienced officer with a plan, well versed in earning, saving, investing and self-development, then I could have reached financial independence years earlier.

You, lucky reader, have that commanding officer and here is the plan.

Within the Prison Camp, think of being in debt like being in the solitary confinement hut with no food and only rats for company.  We have to get out…but how?

Step 1 is to get a grip on your spending. Most people treat their money like its water in a bucket full of holes.  I suggest you think of it like your blood. Its not something you want leaking out of you unless there’s a really good reason.  When it comes to your spending, you need to be able to answer the question: where does it all go?

Before you can repay debts and learn to invest, you need to save. In order to save your spending needs to be less than your income (I know…duh!).   You need to target a savings rate of 50+% of your (net) pay. No, that is not a typo.

If you can save 50% of your earnings, then it should take you about 19 years to go from broke to the point where you are financially independent and probably never need to work again.

And if you can save an amazing 75% of your earnings (I didn’t manage this but I know some that do) it only takes 7 or 8 years to go from broke to financially independent.

These savings rates are obviously easier for higher earners.  But only if you don’t allow your spending to creep up unseen via lifestyle inflation. And if you are a not a high earner, then being frugal is even more important.

To build wealth, we need to first understand and then slash our spending. We spend money for a variety of reasons…lots of which are stupid and reflect evolutionary biases that people find it hard to be aware of, let alone correct. Remember this – money is not for showing off or spending on consumer shit, it is for making you more money to buy freedom and happiness.

Step 2 is to dig the tunnel out of the camp by clearing your debts. All debt that you owe to fund spending (credit cards, car finance, student loans, hire purchase) needs to be repaid.  Debt that does not fund productive assets (rental houses, shares) is an emergency that needs to be dealt with quickly.  Once you have destroyed all consumer debt, you can start to attack your mortgage.

Step 3 is like getting the train to the Swiss border as quickly and safely as possible – you need to learn to invest without taking unnecessary risks or being ripped off.  Investing can be made simple enough for anyone to manage their own portfolio. Even if you know nothing about investing.

Compound interest is the most powerful force in the universe. At 12% per year, your money doubles every 6 years. This can seem quite boring for the first few years. After that, as the snowball gathers size, it stops being boring and becomes really very interesting.

All you need do to get to financial freedom is cut your spending and save enough so that your investment portfolio is worth more than 25x your annual spending.  That will probably be enough.

Getting rich is simple (not easy). If you can follow the principles set out on this site and action them in your everyday life, you will get rich (or at least richer). That is not my opinion…it’s arithmetic. 2 + 2 is always 4.  The Escape Artist is Right and I will show you my workings.

If you are up for this, you are going to want to follow my posts…you can receive notifications via Twitter or Facebook or click the follow button to get new articles by email as soon as they come out.

If you want more background on me, you can check out my interviews in The Telegraph and on Channel 4 TV etc.

Please email me on Barney@theescapeartist.me if you’d like to talk about coaching, or if you’d like to be the subject of a reader case study or submit a (non-commercial) guest post.

or use the contact form below:

 

6 comments

  1. Excellent blog. I’m looking to expedite my escape from BigLaw, which is indeed a prison camp in which I am wasting away (and getting fat at the same time, ironically). As a late-comer (currently age 51) to the excavation, I need some super-sized shovels. So thanks. Ella

  2. Great intro. I have just started my journey to financial freedom so it is great that I stumbled upon this blog. I’ll be hoping to pick up little bits of wisdom as I go through your posts.

  3. thegolfpunk · · Reply

    Hey Commander,
    I’ve stopped the bleeding and started digging, problem is in my country, i don’t have access to a Swiss train( great investment vehicles) and the only bank that sells mutual funds here charge 5% for opening fees(yikes). please help. We dont even have a stock market here. ps. i’m from SE Asia.

  4. Fantastic introduction, curious to read more on you blog.
    We don’t completely agree on the mortgage portion, but that is primarily due to the very low interest rates at the moment (and the ability to leverage our money with a mortgage). And one’s personal tolerance to risk.

  5. Really excellent blog – I’m really enjoying reading it. It’s great to have a brilliant UK based blog too. Lots of the US ones, however interesting to read, aren’t always that relatable so I’m glad I’ve found you!

  6. Victoria · · Reply

    Hello TEA,
    I am a business woman aged 40 and I started this journey 5 years ago.
    I almost cry when I got into your blog 🙂 As I believe sometimes that I am alone in this journey to freedom and nobody understands why I do not want to be a slave forever.

    In Spain is very difficult to find people with this mindset.

    Happy to meet you!
    Hope we can share our approach and thoughts

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