I was born from humble beginnings. Very humble beginnings where my parents struggled extensively to make ends meet. When you grow up from that or a middle class background, the assumption is “if I can only get that big job, become a VP, then I will be set!” This may have been true at one point in time, but no longer is the case. I have eventually realized that this is an incorrect assumption.
I started my career in corporate America, advanced quickly to an executive level due to high ambition, quick learning ability, and a burning desire to synthesize information and improve my skill set. Somewhere along that progression, I realized that the most valuable asset anyone can own is time. Time is the difference between income/debt rich and true wealth. The goal should be to modify the equation such that you disconnect your time from your income. Many people who are income rich, middle class, and poor have not come to this conclusion regarding wealth. Hence, they remain dependent on the system and one, two, or three steps away from financial disaster.
Once I arrived at the time realization, I utilized my corporate career to fund my dream of wealth and laid the groundwork to establish multiple passive income streams so I can retire early. My goal is not extravagance, but rather the chance to self actualize and to play a much more active role in my family’s life.
As with any investment strategy, you must diversify your income streams and start doing this immediately. Start with a combination of passive and secondary active income streams, with a long term goal of gradually transitioning to fully passive income. There are so many labor market trends geared towards the employee including outsourcing, layoffs, relocation, and conversion of full time employees into contingent (gig) workers. It is a near certainty that, at some point, your main income stream (job) will be disrupted and that will put you in a negative position unless you develop a mitigation plan in advance. This negative event will have much more impact if you have a family to support.
One way I plan on buying my freedom is through my investing. These are my active portfolio results (annualized as of 5/31). I’d say I have done pretty well this year at continuing my personal exit plan by deploying a personally developed quantitative model. I am essentially taking calculated risks, maximizing alpha, and controlling beta where possible.
Other ways to lay the groundwork to break free include pursuing entrepreneurial ventures while working, controlling your spending/expenses, slowly accumulating appreciating assets (liquid and illiquid), etcetera. I personally do all of the above to accelerate my early retirement timeline and increase the probability of success. There are multiple paths towards the goal, so you are not limited to my path. The important thing is to understand what works best for your skill set and start taking concrete steps today.
Keep in mind that in order to live a life that most will not get the chance to live, you must be willing to sacrifice and do what others are unwilling to do. This is a core principle of breaking free, self-actualizing, and achieving the ultimate goal. Stay humble, stay hungry, and always keep a laser focus towards the finish line.
-Jonathan Ozovek
