The Financial Freedom Crap Shoot

In 2017, the world’s billionaire club grew by a healthy 13% to roughly 2,043 people.  In my home state of Virginia, according to Forbes, there are just 5 such billionaires.  Since there are roughly 8.3 million people living in Virginia, this gives me about a 5 in 8.3 million chance of being counted as a billionaire.  As remote as that possibility is, it’s still better than the 1 in 258,890,850 chance I have of buying a winning Mega Millions lottery ticket, and the pot for that currently stands at a paltry $145 million.

Yes, the odds of becoming a millionaire or a billionaire are annoyingly remote, even for the average ‘free’ American.  Nevertheless, my goal is to be financially free and in command of my own financial future at some point in my life before I die.  The benefits of financial freedom are obvious.  We all dream about it.  But the execution of the dream seems to vary greatly, while many have completely given up on it all together.

Here’s a rough plan to Financial Freedom I have begun to formulate for myself.  This particular plan, as opposed to the ‘win the lottery’ plan, seems easiest and most practical for me to execute, even though it is far from ideal:

According to my current calculations, my closest shot at financial freedom will be in 19 years when I turn 67.  That kind of sucks, but let me sketch it out anyway.  I have three kids to get through college over the next 8 years and I have a house mortgage to pay off.  I have accelerated my mortgage payoff through additional principal payments of $1000, which should allow me to pay it off in the next 10-13 years (if I can be consistent with the plan).  Helping my kids get through college will induce some financial headwinds over the next 8 years.  As a divorcee, my alimony payments will end in roughly six months, which will free up additional capital to help with college expenses.  Once Child Support, Alimony, College and Mortgage expenses have all been paid, I estimate my monthly expenses to be somewhat akin to the following:

  • Food: $540
  • Gas: $150
  • Water Utilities: $50
  • Electricity Utilities: $67
  • Gas Utilities: $42
  • Phone: $85
  • Gym: $15
  • Internet: $80
  • Health Insurance: $800
  • Car Insurance: $60
  • Life Insurance: $45
  • House Taxes: $410
  • Car Taxes: $25
  • Annual Car Maintenance: $167

Total estimated monthly expenses should be around $2,536, or $30,432 per year.  My current estimated monthly Social Security benefit at age 67 is $2,893, which should just cover these estimated living expenses.  Additionally, If I can manage to save $1500 per month for the next 228 months (taking me to age 67), the nut accrued could provide an additional $950 per month for the next, and probably last, 30 years of my life.  So from age 67 to 97, I should have about $3,843 per month to cover living expenses, at least until I succumb to assisted living (at which point I become my kids’ problem lol)!

I estimate my odds of achieving financial freedom by age 67 at around 75 percent.  My next steps are to figure out ways to compress my financial freedom time line by studying how billionaires have made their extravagant fortunes.

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