Best investing strategy for financial independence

[MRJIM]

I have been researching financial independence and investing for a few months now and I’m a bit overwhelmed with all of the information out there. I have been looking at blogs like Dividend mantra, Dividend monk, Early Retirement Extreme and Mr Money Mustache and these sites have introduced me to investing strategies like dividend growth investing and index investing. I would just like to know out of these or if there are any others that are the best for achieving financial independence within 10 years, I have read that dividend growth investing is too slow if you don’t have a large sum of money to invest but I’m not sure if that’s true or not. Also it seems like the people who run these blogs are only focusing on how much only they spend and aiming for an income goal based on that, but for someone like me who wants to start a family I won’t be able to have my investments just pay my expenses. So I mean really I’m looking for the best investing strategy that will be able to pay me enough annual income to support me and my future family within 10 years. I’m 19 at the moment and looking to reach financial independence by the age of 30 (under 30 would be great if I could achieve that) as I feel that 30 is the right time to start a family and I don’t want to rely on a job to support them.

If anyone who’s aiming for financial independence or has already achieved it could shed some light on this I would really appreciate it.

 

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[DeletedUser2]

dont lose money


Z

ps.
go read ricksons9. investing in stocks AMA

also, how are you getting the money to put into stocks in the first place?

and have you read the TMF ?

 

[MRJIM]

Thanks for all of your replies, sorry I should have gone into more detail. I’m looking to make around £18,000-£20,000 ($29,840-$33,156) a year in passive income; this will cover my expenses and leave me £1,000 a month to keep invest. Would this be possible within 10 years? I’m assuming if I have a family my wife will be working so if she makes around £18,000-£20,000 a year then we will have around £36,000-£40,000 ($59,680-$66,312) a year which I think will be sufficient to raise a family but I could be wrong. So really what I’m trying to ask is how realistic is it for someone to make £18,000-£20,000 a year in passive income within 10 years with something like growth stocks, dividend stocks and bonds if they are able to save around £1,000-£1,500 ($1,657-$2,486) a month .

Thanks once again for your replies.

 

[snowbank]

"An investment in knowledge pays the best interest." --Benjamin Franklin

 

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[Tiago]

"An investment in knowledge pays the best interest." --Benjamin Franklin

Absolutely love this!

 

[snowbank]

I have been researching financial independence and investing for a few months now and I’m a bit overwhelmed with all of the information out there. I have been looking at blogs like Dividend mantra, Dividend monk, Early Retirement Extreme and Mr Money Mustache and these sites have introduced me to investing strategies like dividend growth investing and index investing. I would just like to know out of these or if there are any others that are the best for achieving financial independence within 10 years, I have read that dividend growth investing is too slow if you don’t have a large sum of money to invest but I’m not sure if that’s true or not.

Yes, it's slow if you don't have capital. Not super familiar with some of those blogs, but dividend investing to retire unless you're making good amounts of money will not retire you very quickly.

I’m 19 at the moment

19! Dude assuming you're not sitting on some huge nestegg, passive stock investment as a way to retire you early will likely be one of the slowest ways you can do it.

It all depends on how much income you want to make.

Mr Money Mustache while a very popular blogger, if I recall correctly lives on a very small income.

Nothing wrong with it if that's the route you're going, but there are much, much faster ways.

 

[Paleo]

Thanks for all of your replies, sorry I should have gone into more detail. I’m looking to make around £18,000-£20,000 ($29,840-$33,156) a year in passive income; this will cover my expenses and leave me £1,000 a month to keep invest. Would this be possible within 10 years? I’m assuming if I have a family my wife will be working so if she makes around £18,000-£20,000 a year then we will have around £36,000-£40,000 ($59,680-$66,312) a year which I think will be sufficient to raise a family but I could be wrong. So really what I’m trying to ask is how realistic is it for someone to make £18,000-£20,000 a year in passive income within 10 years with something like growth stocks, dividend stocks and bonds if they are able to save around £1,000-£1,500 ($1,657-$2,486) a month .

Thanks once again for your replies.

It's extremely unrealistic. First of all, the rule of thumb in personal finance is that you can withdraw 4.5% of your investment portfolio per year over the long term and maintain your portfolio. Any more and you will be eating into your capital on average. In order to get the perpetual return you are looking for, you would need about 500,000 pounds total invested,from which you could withdraw 4.5%,which would give you 22,500 pounds per year income.

So, you''re going to need about 50,000 pounds per year to put into investments on top of your living expenses each year for the next 10 years. That's not going to come from the conservative investments you are considering.

You really should read TMF which addresses precisely your issue early on in the book

 

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