Financial Independence: Introduction for Rookies

Financial Independence: Introduction for Rookies

Would you like to live without the need to work for a salary for the rest of your life? If you can do this, you are one of the lucky few who have achieved financial independence. From my point of view, financial independence is essentially the ability to control one’s own time. It is being able to spend time wherever you want, with the people you want, whenever you want. We all live once and don’t know when and how it will end. However, our capitalist social structure reduces us to instruments of production and consumption. Most of us live a life that we do not desire. In the most productive hours of the day, we deal with meaningless things in an office away from our family and friends because we need money to survive.

Take off the straitjacket

Wealth is concentrated in the hands of a small minority. Ordinary people have to earn money. That is so taken for granted, like a law of nature. In a capitalist society, production must increase continuously, and someone must consume the increased production. Most of the community prefers a minimal life; if they avoid consumption, the system will collapse. At this point, advertisers, ideology/state, and neighborhood pressure come into play. It is perplexing that the purpose of life is to get a job, accumulate goods, and, if necessary, consume more by borrowing. It’s like a mouse running aimlessly on a tiny treadmill. There’s always a bigger and more luxurious house to buy, a more expensive car, and a new electronic gadget. Financial independence is a way out of this straitjacket.

The formula of financial independence

Many people see being financially independent as an impossible goal. However, this is not true. Financial independence is an achievable goal under certain circumstances, and more people are living a life of financial independence than you might think. You can look at these blogs: Early Retirement Extreme, Mr. Money Mustache, and Millennial Revolution. These people can live without needing a salary with rental income, dividends from shares, or income from bonds and deposits. The formula for financial independence is simple: reduce your spending, increase your revenue and invest.

If your income is relatively high, it may be enough to cut your expenses. However, if your income is insufficient to cover basic costs such as housing, food, and beverage, it would be more logical to focus on increasing your income. I’m going to be realistic at this point. In today’s Turkey, it isn’t easy to find a job even if you are qualified. Achieving financial independence is a near-impossible goal if you don’t have the education qualifications and are stuck in a low-income job.

What will I do once financially independent?

Once you achieve financial independence, you can do whatever you want. You can leave your business life behind and retire yourself early. Settling in a small seaside town, you can spend your day fishing. You can spare time for your hobbies or raise your children instead of work. You can keep your current job, but if the boss is bullshit, you can give your mouth a whirl with great pleasure. You can take risks and start your own business without fear of starvation. All options are in front of you. Isn’t that what freedom is?


For detailed information, I suggest you look at the Reddit – FIRE group. There are also pioneering blogs. If you type ‘financial independence early retirement blog’ on Google and search, you can find many of them. There are also books: The Millionaire Next Door, Quit Like a Millionaire, The Frugal Feminista, and The Simple Path to Wealth. If you direct your questions to me, I will try to answer them to the best of my ability.

Can this be done in Turkey?

I honestly think it is doable. That’s why I’m trying to do it. However, there are special conditions for Turkey. Precisely the exact solutions that work in the US will not work here. First, the USA is a developed country, its economy is stable, and there are many alternatives for individual investors. Those seeking financial independence in the US invest in low-cost index funds (such as the S&P500). The 100-year average return of the American stock markets is 7-8% per annum in real terms. You don’t need to be a genius stockbroker or know much about finance. Inflation is under control, and it is possible to invest in dollars. The main barriers to achieving financial independence are often limited to income, savings, and how many years you can persevere.

Unfortunately, Turkey is a developing country. What will happen tomorrow, both politically and economically, are uncertain. Politicians in Turkey are not concerned about controlling inflation because a significant electorate does not have such a demand from politicians. And it isn’t easy to find investment instruments that always provide high returns in dollar terms. I calculated Borsa Istanbul’s historical average return was 3.3%. Moreover, services such as low-cost index funds are not yet available in Turkey. You should plan if you live in an economy with a de facto dual currency system, such as TL and USD.

How much money do we need for financial independence?

You don’t need millions of dollars for financial independence. At least if you live in Turkey. Based on today’s economic rates of return, an investment of approximately 170 thousand dollars is required for a monthly income of 1,000 dollars. I assumed the real rate of return as 7%. If you do not pay rent, a small family can manage in Turkey with this money. Let’s say we’re looking for a little more comfort. How much investment do you need to spend 2,000 dollars a month with today’s purchasing power? $340,000 under the same real rate of return assumption. Generally, if you invest 25 times your annual expenditure, you can leave your working life. However, I will discuss this rule in more detail later. Stay safe.


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