EP002: Financial freedom: A life worth pursuing.

“If a man knows not to which port he sails, no wind is favourable” - unknown.

Let me preface this by saying, money doesn't buy happiness BUT having money gives us freedom to explore. Just remember it is better to cry in a Ferrari over a geo-metro.

What do we need to do to achieve this so-called financial freedom? There are set steps to financial freedom which you can read in great detail from this article I really liked - link. Tldr:

1. Clarity – knowing what you want.

2. Self-sufficiency – living alone / with family.

3. Breathing room – have an emergency fund.

4. Stability - enough money to live for 6 months without worry.

5. Flexibility – have 2 years’ worth of living expenditure saved.

6. Financial Independence – can live off investments / savings.

7. Abundant Wealth – live off 3-4% of withdrawals from investments.

While Financial freedom is the end goal, we aim to determine when said end goal is. Hence, FIRE (Financial Independence Retire Early). This movement coined by Vicki Robin and Joe Dominguez have written a book – Your money or your life. an interesting book that you can buy and read.

Over time, the FIRE community has realised that a one fits all solution is impossible. Which is why they came up with a few types of FIREs. Here is an article that helped me understand this much better.(tldr):

• Regular –Enough savings for current lifestyle without changing habits after leaving work.

• Coast – Saved enough to coast into traditional retirement without further saving.

• Barista – Early retirement, but part-time work needed for income and health insurance.

• Lean - Frugal living to retire early, minimizing costs for a modest lifestyle.

• Fat - Early retirement without a minimalist lifestyle, allowing for unrestrained spending.

But how do we get there? Of all the ideas proposed,in my opinion the best way to make money is having 2 income streams per person. (Unless you want to grab a FAANG job which might pay you about 400,000 to 1,000,000 per year.) Skill diversification is the fastest way of earning the financial freedom we wish to achieve.

Another one of my favorites is Options Trading. But learn to tread lightly, as the risk in this strategy is quite high and since each person’s appetite to risk is different I would not recommend it to everyone. Fat FIRE is also my favorite and I believe that getting there is going to be through options trading. Like all things, this will take time, but the power of compound interest will get me to FIRE. 

There are other avenues I would like to try, please feel free to reach out to me if you need help getting started  [email protected]. I am excited to announce that two other people will be starting newsletters along with me. I promise to share updates once they are confident of their work.

Here are the trades and losses I make every week. This will give you an idea of whether you can start options trading or not. I will share more about strategies later as I have more traction towards that. 

Disclaimer: This is not financial advice. It is purely for educational / entertainment purposes only. I aim only to showcase what I learnt myself.  

Options Traded this week
 (per share per contract, please multiply the values by 100)
 (C- call, P - puts)

1. NFLX 515C 1/26 (Earnings)

   1. DEBIT -10.25$

   2. CREDIT - 40.38$

   3. COLLATERAL – 0$

2. TSLA straddle 220C 190P 02/02 (Earnings) -

   1. DEBIT -12.60$

   2. CREDIT - 26.32$ (C expired worthless)

   3. COLLATERAL – 0$

3. SPY short iron condors 510C/467P 03/01 –

   1. DEBIT – still holding.

   2. CREDIT -1.08$

   3. COLLATERAL – 5$