Scott and I have been talking about Financial Independence for going on 8 years now. We wanted to create a definitive guide to FI, and this is it. Not this post, but this series, which we are calling The Ultimate Guide to Financial Independence. We’re not reinventing the wheel here, we’re just gathering up this information in one place.
This post is the beginning of the series. There’s a LOT more headed your way!
A Few Important Disclaimers (Because Honesty Is Our Brand)
First: There is nothing in this series that doesn’t exist somewhere else on the internet. If you have unlimited time, the patience of a saint, and a PhD in separating financial garbage from gold, you could totally DIY this entire thing. Most people would rather not spend three years doing that, which is why this series was created.
Second: This series was written by Scott Trench and me (Mindy Jensen), edited with help from AI, and unified into one voice by a very patient editor who likes personal finance more than is socially acceptable.
Third: Yes, this series could have been a really long blog post. Or a podcast episode. In fact, parts of it already were. This is what happens when you take years of conversations, research, mistakes, wins, and late-night spreadsheet sessions and smoosh them all into one place.
Fourth: This series will become outdated. We’ll update it. Then it’ll become outdated again. That’s just how money works. Tax laws change, life changes, and economic conditions shift. The core principles? Those hold up beautifully. But some details will always need a refresh.
What This Series Will Actually Do for You
This is not a hype series. There are no vision boards. No manifesting wealth by staring at your dream brokerage account balance while burning sage.
What we’re offering instead is a practical, realistic playbook.
You’ll get a detailed path with a high probability of reaching Financial Independence – assuming a middle to upper-middle-class income and a working career of roughly seven to fifteen years. Not overnight. Not effortlessly. But very, very achievable if you’re willing to do the work.
You’ll also get decision trees for real-life scenarios like kids, divorce, career changes, and non-traditional portfolios. Because life rarely follows the clean, tidy examples in math textbooks.
Finally, this series compiles the best personal finance research we could find, with relatively limited original opinions from us. When we do give opinions, we’ll tell you they’re opinions. (We’re not trying to sneak anything past you.)
The Core Principles
Everything in this series flows from a handful of principles. These aren’t exciting. They aren’t flashy. But they work.
Spend Less Than You Earn. A Lot Less.
We generally target a fifty percent savings rate. But – and this is important – a fifty percent savings rate isn’t the only savings rate that works. If fifty percent isn’t doable for you, that’s okay. Figure out what is.
If you’ve ever listened to the BiggerPockets Money podcast (hello, that’s us), you’ve heard me say a thousand times that personal finance is personal. This includes your savings rate. If fifty percent makes you want to throw your computer across the room, don’t stress. Do what you can. We’ll still be here, cheering you on.
Invest for the Long Term.
During the accumulation phase, you should assume your investment horizon is effectively forever.
This doesn’t mean you’ll never touch your money. It means you invest as if short-term market movements don’t matter – because for you, they largely don’t. The biggest mistakes investors make tend to happen when they react to volatility. They sell when markets fall, chase performance when markets rise, and generally do the opposite of what actually helps.
Long-term investing flips that script. You buy assets you believe will grow over decades, you add to them consistently, and you let compound growth do the heavy lifting. Temporary drops aren’t emergencies. They’re part of the process. (Annoying, yes. But normal.)
Thinking long-term also allows you to stay reasonably aggressive while you’re accumulating wealth. You have time to recover from downturns. You don’t need to predict what markets will do next year. You just need to remain invested over many years.
Improve a Little Every Day.
FI isn’t won with one heroic effort. It’s built through steady, unglamorous improvement.
The goal is to gradually increase your market value and income over time. That might mean learning new skills, getting better at your current job, switching roles, or building side projects. Small upgrades compound just like investments do.
You don’t need to transform your career overnight. You need to get slightly better at something valuable and repeat that process year after year. Over time, this creates leverage. You earn more, have more options, and can absorb setbacks more easily.
Daily improvement also applies outside of work. Better systems, better habits, and better decision-making reduces friction and frees up energy for things that actually matter.
Optimize Taxes With a Clear Order of Operations.
Taxes are one of the largest expenses most people will ever have, yet many treat them like an afterthought or a mystery they’ll solve “someday.”
Optimizing taxes means deciding where each dollar goes before you invest it. A clear investment order of operations helps ensure you’re taking advantage of tax-deferred and tax-free growth whenever possible.
This isn’t about complexity. It’s about intentionality. Contributing to the right accounts in the right sequence can add years of compounding without increasing risk or effort.
We go much deeper into this in Week Seven, but the takeaway here is simple: A dollar saved in taxes is just as valuable as a dollar earned. Sometimes more so.
Automate Everything You Reasonably Can.
Willpower is overrated. Systems are better.
Automating your finances removes decision fatigue and reduces the chance that good intentions get derailed by busy weeks or unexpected expenses. Automatic bill pay prevents late fees. Automatic investing ensures consistency even when motivation is low – or worse, when the market is down and you’re questioning your entire strategy. (Remember, your strategy was written when you weren’t reacting to market fluctuations. And your strategy was created for the very purpose of preventing you from reacting to market fluctuations.)
When saving and investing happen in the background, progress becomes the default. You no longer need to decide whether to save or invest each month. That decision has already been made.
Automation also creates clarity. You know what’s happening with your money without constantly managing it. That frees up time and mental bandwidth for higher-value decisions – like whether to finally try that new taco place.
Track Your Money in Real Time.
You cannot improve what you do not measure.
Tracking your money in real time keeps small problems from becoming big ones. It helps you notice spending creep early, catch errors, and stay aligned with your goals. This doesn’t require obsessing over every transaction, but it does require awareness.
Net worth tracking and budgeting tools make this much easier than it used to be. When you can see progress month to month, motivation tends to follow. When progress stalls, the data usually tells you why.
The goal isn’t control for its own sake. The goal is confidence. When you know where you stand, surprises lose their power.
Take Asymmetric Bets.
Asymmetric bets are opportunities where the downside is limited but the upside is meaningful.
These are not reckless gambles. They’re thoughtful experiments. Starting a side project, investing in a new skill, or trying a small business idea are common examples. If they fail, the cost is time and manageable money. If they succeed, they can dramatically shorten your path to FI.
Most people never take these chances because they wait for certainty. FI rewards the opposite approach. You take small, calculated risks repeatedly and let the math work in your favor.
You don’t need many wins. One or two successful asymmetric bets over a career can shave years – or even decades – off your journey.
Together, these principles create momentum. They’re not flashy, but they’re durable. Follow them long enough and progress becomes inevitable rather than optional.
The Philosophy Behind the Plan
We believe the best approach to FIRE blends two things.
First, consistent investing in low-fee, tax-advantaged accounts.
Second, a series of events. Raises. Promotions. Side businesses. Real estate. Windfalls. None are guaranteed, but over a decade or more, some of them usually happen.
You don’t need all of them. You just need a few to go your way.
The Strategies We’ll Walk Through
We’ll cover how to control the Big Three expenses: housing, transportation, and food.
We’ll show you how to keep a disciplined but realistic budget for everything else.
We’ll help you build a repeatable system for increasing your income over time.
We’ll focus on long-term investing with reasonably aggressive positions, usually anchored in low-cost, broad-based index funds.
You’ll learn how to deploy savings using a clear investment order of operations.
We’ll talk about making regular side bets that carry limited risk but meaningful upside.
We’ll address the grind. Because for most people, this is a seven-to-fifteen-year commitment. (Sorry. But also, not sorry, because it works, it just takes time.)
As you approach about eighty percent of your goal – or about five years out – we’ll discuss shifting from aggressive growth to a more diversified portfolio.
We’ll outline drawdown strategies designed to harvest your portfolio in a tax-efficient way.
We’ll show you how to manage everything using net worth trackers and budgeting apps.
We’ll check the boxes on insurance, estate planning, access management, and all the unsexy but absolutely critical stuff.
We’ll encourage you to slowly develop a tolerance for entrepreneurship, even if you never plan to run a business full-time.
And we’ll push you to define what you’re retiring to, not just what you’re retiring from.
This Is a Foundation, Not a Prescription
We believe this approach gives the broadest possible audience a strong foundation for a high-probability financial plan. That said, personal finance is personal. (There it is again!)
That’s why at BiggerPocketsMoney.com we’ve created dozens of scenario-specific FI plans and continue to update them regularly.
These include paths like:
- Broke at Fifty, Millionaire at Sixty
- Early Career FI on a Middle-Class Income
- FI with Kids
- FI for Doctors
- FI for Teachers
- FI for Military Members
- FI for Government Employees
- FI for Retail Workers
- FI for Business Owners
- FI for High School Students
All of these plans will be available for free as written guides, PDFs, and audio or video resources at BiggerPocketsMoney.com.
One Last Reality Check
We are not licensed financial planners. Even if we were, we wouldn’t be your financial planner.
You are responsible for your decisions, your investments, and your outcomes. Investing always carries risk. You could lose some or all of your money.
We stand by our research and our experience, but there are no guarantees in finance. Anyone who tells you otherwise is selling something.
With that out of the way, let’s get into it.
P.S. If you made it this far, congratulations. You’re officially more committed to reading introductions than most people. That bodes well for your FI journey.
Leave a Reply