How can I reach FI faster?

[drteter]

Hello Mustachians,
I've been reading MMM for a couple of years and just discovered this forum, so I decided to join up!

My story:
I'm 22 and graduated in 2012 from a well-respected university (think "public ivy," as silly as that term sounds) with a BA in Economics.
I decided that I didn't want to get a normal summer job, so I started a company that helped small businesses market themselves online and build positive online reputations. This isn't an area I was particularly interested in, but I saw a niche and filled it. It didn't set the world on fire, but it was a good experience and taught me that I can have at least modest success on my own.
When I graduated, I took an offer to work at a marketing consulting firm working with Fortune 500s on branding, positioning, concept testing, etc. I also do some business development work that has a longer term strategic goal of bringing in new clients. I've been working there for nearly a year now.

While the bulk of my professional experience is in marketing (as it's what was most accessible inside and outside of school) my interests lie more in economics/finance/investing. In addition to coursework, I've got econ research experience and a year of experience managing 100K in real money for my school's endowment fund.

I thoroughly enjoy the analytical side of the work I do now and similarly enjoyed problem solving in my business. Ideally, I'd be doing work like this at a new position or in a new business venture this time next year.

Finances:
-I take home ~3K/mo after taxes.
-I have a 401K through work that is a 3% contribution by my company regardless of how much I put in that I don't currently contribute to.
-I live semi-frugally with roommates and have a car payment (I bought a new car before I started reading MMM, don't shoot!) that is at .9% interest with less than 2 years left. My car gets 27 mpg aggregate, but my job is ~15 miles away, and I commute about an hour per day.
-Total bills each month amount to $1500ish, plus I invest $500/mo in a non-tax advantaged account. I'm not funding retirement accounts right now until I see what kind of liquid cash I might need for a move/travel/business startup capital
Total cash: $22K
Total investments: $9K


Goals:
-Short term, I'd like to be location independent and doing a job that I enjoy. I’ll probably look to change jobs at the end of 2013 for fit and location reasons.
-Long term, I'd like to be financially independent as early as possible (age 35-40 seems most likely).

The two seem to be at tension here. In my area of interest, I haven’t found a lot that fulfills my goal of being location independent and will still pay me enough to save 50% of my take-home or more for early retirement.

Questions:
-Do you guys think this means I’ll need to build another business to fit this desired lifestyle?
-Am I missing anything glaring?
-Any advice for an aspiring Mustachian? Anything and everything is helpful at this juncture.

TL;DR: My job is not really in the area or industry that I’d like to be in long-term, and I’d like to be location independent so that I can travel the world a little bit over the next couple of years. I’m committed to my current job until the end of the year, but am faced with the decision of what to do. Long-term, I'd like to be financially independent, and my current job (or one that pays similarly) would get me there in 15 years of working. How can I get from here to where I want to go?

Edit: typo, whoops!

[the fixer]

It sounds to me like you have all the skills you need to pursue a Tim Ferriss 4 Hour Workweek strategy. Find another niche and start a business to fill it. Outsource the time-consuming work to people in India, and dedicate yourself to business development/marketing, which you appear to already know how to do. You've also taken the leap once before to start a business and work for yourself, and in my experience doing that is the hardest part.

You don't have to buy the book, you can just start with: http://www.wikisummaries.org/The_4-Hour_Workweek

If you want a greater safety margin/more income, try to find part-time work that you'd enjoy doing ~2 days per week that you could do anywhere you wanted to live. For instance, you could become a tax preparer and at least be able to do federal taxes anywhere in the US (rules vary state by state but I think they usually build off the federal paid preparer system, at least they do in MD). Another possibility is retail; easier to get into but not as rewarding, and openings can be more competitive. If you're mechanically inclined there are lots more possibilities.

[grantmeaname]

...

You're not an OSU grad, are you? I just wondered between the endowment management and the "public ivy" moniker. If so, we should totally meet up sometime -- I live in a house full of Mustachians near campus who are upperclassmen or graduating seniors.

As far as your goals: keep the roommates, they're a great way to keep expenses down. I also thought of one way you may not have thought of to get a location-independent job, but it's not fast or easy: start working at an employer in your field of interest with a good human resources reputation. Get enough specialized knowledge that you're invaluable to the firm, and then it may be more feasible to ask for flexible location.

[lauren_knows]

...

You're not an OSU grad, are you? I just wondered between the endowment management and the "public ivy" moniker. If so, we should totally meet up sometime -- I live in a house full of Mustachians near campus who are upperclassmen or graduating seniors.

As far as your goals: keep the roommates, they're a great way to keep expenses down. I also thought of one way you may not have thought of to get a location-independent job, but it's not fast or easy: start working at an employer in your field of interest with a good human resources reputation. Get enough specialized knowledge that you're invaluable to the firm, and then it may be more feasible to ask for flexible location.

I've never heard of this "public ivy" nonsense, until reading this thread. Apparently Penn State is on there too.  Go Big10, I guess?

[chicagomeg]

I've only ever heard Miami grads use the term.

[grantmeaname]

It's a silly term from a silly industry (seriously, USNWR college rankings are everything that's wrong with journalism). I don't think OSU even puts it on brochures. But in the end, it's not like it really matters what you call it.

[tylerherman]

A side business in the field you like would be the best place to start. You've already done one business and you probably already have some connections to get this new one up and running.

If it becomes successful take it on the road. If it's only marginally successful or a total bust, at least you're bringing in some extra money and gaining some additional experience.

The business might be the answer to your problems. If it succeeds great. If not, take the experience to a new fulltime job in the field. 

[drteter]

Hi all,

Thanks for the helpful comments! I hope I didn't confuse anyone with the "Public Ivy" stuff...I'm not from any of the schools listed, but very cool to meet some new Mustachians! I simply hoped to illustrate that I went to a good school that has a good national reputation, but is a step or so below the elite schools that employers universally clamor for.

I've actually been thinking of some sort of Financial Independence/Early Retirement consulting as a side opportunity. It wouldn't be targeted for people like us that already know what they need to do to meet their ER/FI goals, but for the broader populace that doesn't know where to start on FI. While I have some serious qualms about taking money from people who should be saving more, I figure that the net would be far ahead of what they might do on their own (with advice on major purchases, transport, frugal living, debt elimination, investing, etc.).

What do you guys think of the idea? Does it violate your sense of what this movement's all about? Is this something that your aspiring frugal living friends might be interested in?

[arebelspy]

I've actually been thinking of some sort of Financial Independence/Early Retirement consulting as a side opportunity. It wouldn't be targeted for people like us that already know what they need to do to meet their ER/FI goals, but for the broader populace that doesn't know where to start on FI. While I have some serious qualms about taking money from people who should be saving more, I figure that the net would be far ahead of what they might do on their own (with advice on major purchases, transport, frugal living, debt elimination, investing, etc.).

What do you guys think of the idea? Does it violate your sense of what this movement's all about? Is this something that your aspiring frugal living friends might be interested in?

There have been some discussions of this type idea on the forums before, a search will yield you some reading material.  Here's one to get you started:
https://forum.mrmoneymustache.com/ask-a-mustachian/is-it-anti-mustachian-to-become-a-financial-planner/

[sheepstache]

I know you only just graduated but I'm surprised that your income is, like, the same as mine and I work in the non-profit/education/theater trifecta of low wages.

I can't see any argument against starting a side business now; that seems like the best course.  It gives you a decent shot at bringing in more income and definitely gives you experience which would be useful for future business ideas (and if you've already started a business at this age then you sound like the sort of person who would keep doing that sort of thing once you're FI) _and_ be attractive to future employers in the field you're actually interested in.

You know that you can take out the principal of a Roth IRA at any time with no penalty, right?  Assuming you can get the type of investment you want in a Roth account, there's no reason to squander an opportunity to load one up as early as possible.

[tomsang]

Reaching FI in a given time frame is about the saving rate that you achieve.  If you want to reach FI faster, then you need to increase income and/or decrease expenses to get to the saving rate that achieves FI in you time frame.  If it is still not possible to reach FI during your desired time frame then you need leverage: 

To turbo charge the timeframe after you have already stripped out all the expenses that you are willing to do, then you will need to leverage.  The leverage can be taking on more debt and/or taking on additional income producing projects.  At your age, taking on debt to acquire income producing properties or investments makes a lot of sense if you are trying to turbo charge your FI date.  By taking on debt, you are risking your assets to achieve a result that would take longer if you did not take on the debt.  This may cause discomfort, but is required if you are trying to turbo charge your FI.  Coming off of one of the worst economic times in history, the governments around the world are throwing money to jumpstart the economies.  If you have a good credit score, good cause, and have a good game plan than there is close to "free money" out there to be had. "Free Money" = money that is lent out at less than inflation.

Having a good game plan is critical to minimizing the risks that are inherent in leveraging.  It also will result in cheap or "free money" flowing to you.  You will also have companies and people wanting to team up with with you, to partner with your success.   

If you put the time and effort in managing the risk then your payback should be greater than the risk that you are taking on.  This is only for people that are willing to take on additional financial risks to shorten the FI timeframe.

The other areas of leverage is time.  Your time and other people's time.  If you are willing to invest more hours than a typical workweek, then you are speeding up the FI time frame.  If you are willing to take on risk, than taking on "employees"(contract or fulltime) will amplify the positives and the negatives. Again if you have a good plan you will minimize risk and maximize returns. People will want to partner with you as they want a piece of your success.

At your age and Net Worth it is not a bad time to take on risk/leverage as the risk/reward is on your side.  When you are a year out from FI, then gambling with your FI is tougher.  At your age, if you lose you will gain knowledge and wisdom.  If you use this board before you make the jump, you will have a good chance of success.

You may not see it on many personal financial websites, but debt is great if used for good reasons! 

Good luck!