A Small Presentation on Financial Independence; just something I made that is small for friends and family.

1. Financial Independence
A Brief Introduction to Financial Independence and Ways You
Can Achieve It!

2. Financial Independence
• Why Become Financially Independent?
• Financial Freedom: more choice on how to spend your money
• Employment Freedom and Job Freedom
• Reduction of Stress and Healthier Lifestyle
• More Time To Pursue What You Love
• Become a Humanitarian!
• Retire!

3. Employment Independence
• Financial Independence leads to Employment Independence
• You can choose the job that you want!
• You can choose a more fulfilling job!
• You can work more on solving humanity’s problems!
• You can quit!

4. Retirement
• Financial Independence contributes to your ability to pursue retirement how
and when you want it
• Retirement as state of mind; financial independence as state of being
• During retirement you can still work or choose whatever you wish to do.
• Financial independence grants you that ability to ease your mind to pursue what you
want

5. Two (Combinable) Ways For Financial
Independence
Asset Accumulation Expense Reduction
• Gather revenue generating assets until the
generated revenue surpasses living/liability
expenses.
• Gather enough liquid assets to then sustain all
future living/liability expenses
• Combining passive + active incomes to be able
to generate your threshold for living a financially
independent life
• Another approach to financial independence is
to reduce regular expenses while accumulating
assets, to reduce the amount of assets required
for financial independence.
• Reducing expenses, combined with asset
accumulation, allows you to achieve financial
independence faster

6. Difference between ‘active’ income and
‘passive’ income
• Active income/Earned Income
• Generated from active work/labor
• Eg Paycheck or Salary
• Active income is extremely useful if:
• You use it to purchase assets that
help generate passive income
• Using paychecks to help purchase a
rental property, for example.
• Passive income assets
• Is generated even when you are not
actively managing your assets
• EG collection of rent, stock
dividends, bonds, pensions, etc.
• Greater tax benefits
• Designed by govt to encourage
investing

7. Compounding
• Why save? Because of compounding!
• Save early, live below your means,
• 401K/Roth IRA/Other Tax Deferred
Accounts: Good Candidates for
Compounding

8. Active Management
• For people who like to actively trade or pick
stocks
• For people who have a lot of wealth and has
the desire/ability to make more money.
• For people whom understand risk and are
better risk takers.
• For people who believe they (or another money
manager) can beat current indexes of returns

9. Passive Management
• For people with busy lives
• Raising children
• Working hard jobs
• For people who aren’t good with picking
stocks or analyzing the market
• For those whom are hyper-emotional and
swing too far with the market

10. A Theory I Like Right Now: Asset Allocation

11. Lazy Portfolios:
Good Examples of Passively Managed Portfolios
4-Core Funds 3 Fund Portfolio David Swinson’s Yale Portfolio

12. My Personal Bias Against Picking Stocks: I’m
NOT GOOD AT IT!

13. Benefits of Low Expenses Ratio
Important to remember: keeping your
expense ratio low will allow you to save
a greater amount of money for
retirement.
This is due to the nature of compound
interest: the less money taken from
you, the more yield you receive.