Financial freedom is anything but one-size-fits-all: To some, it might mean being debt-free. For others, it’s all about having a locked-and-loaded emergency fund, or being able to retire early.
We caught up with four people who are all enjoying their own version of financial freedom. Even if their definition isn’t yours, you can still take their smart money lessons to heart.
Corey Blake, 30, CEO of a digital marketing agency in Oahu, Hawaii
"Financial freedom doesn't happen overnight—but there's definitely one simple way to supercharge your efforts: Avoid debt. Because my wife Bridgette and I aren't chained to creditors, we're able to stretch our monthly income and live comfortably in our favorite place: the north shore of Oahu.
It helps that we’re minimalists by nature, which has been a game changer: We’re raising our two kids to value experiences over stuff; rather than accumulating things we don’t need, we’d rather make memories. Hiking or hitting the beach are free activities that also help us connect as a family.
We've struck a healthy balance—it's not like we have no furniture! But we do our best to live without excess when it comes to clothes, gadgets and the like. For example, we share one car and rely on the bus or Uber when needed. Basically, we live within our means, and don't use credit cards unless we can pay them off immediately.
Granted, it wasn’t always this way—we worked up to it. After starting my marketing company in 2013, Bridgette and I moved from pricey Hawaii (where I’d gone to school) to Arizona to save up. Two years later, thanks to the much lower cost of living and my gradually increasing salary, we'd saved about $20,000. That's when we 'decluttered' our life, selling off everything from our TV to all of our kids’ excess toys. This brought in an extra $4,000. With just four suitcases in tow, our family moved back to Oahu in earlier this year.
The whole reason I work so hard is so that our family can live a life where our time is aligned with our passions. Too often, people get stuck somewhere they don't want to live, doing a job they don't like, surrounded by a bunch of stuff they don't need. Changing your mindset can be hard at first, but financial freedom is well worth it."
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Sharon Marchisello, 64, money blogger and author in Peachtree City, Ga.
"When my husband Michael and I bought our four-bedroom house in 1994, we were on the hook for $183,000, which felt like a mountain of debt. Fortunately, we were otherwise debt-free, so we immediately started hacking away at the 8.8 percent loan. I was working as a project manager, Michael as a flight attendant, earning a combined $95,000 per year.
We began by sending the next month’s principal along with each month’s regular payment. Four years later, the strategy had helped us shave $20,000 off the total balance. That’s when we refinanced from a 30-year to a 15-year loan with 6.75 percent interest and began contributing anywhere from $100 to $1,000 each month toward extra principal payments.
We’d whittled our balance down t just $65,000 in 2003, when the major airline Michael and I both worked for was teetering on the edge of bankruptcy. With our jobs anything but secure, it felt like the right time to eliminate our mortgage payment—our biggest monthly expense by far—just in case we found ourselves unemployed.
Interest rates were going down, which had us thinking about refinancing again—but we ultimately decided to transfer money from a savings account that was earning just 1 percent in order to retire the loan altogether.
This majorly increased our cash flow, allowing us to quickly replenish our emergency fund and start maxing out our 401(k)s. Paying off our mortgage reduced our expenses so much that I was able to retire in 2008, which has freed up time for me to pursue my passion for writing. In other words, life is good!"
Liz Coyle, 33, travel blogger in Phoenix, Ariz.
"For many years, I thought I had financial freedom. I had a director-level position at a law firm, a six-figure salary and the purchasing power to cover all my needs. But that all changed when I had my first child in 2015, and 60-hour workweeks translated to precious time away from my husband Chris and son Jude. I kept up with the 9-to-5 working mom routine for about 18 months before hitting a wall.
But I couldn’t just quit my job—we really needed to two incomes to live comfortably. So I reevaluated my skill set: I’m a travel junkie by nature and love water sports. And having majored in journalism, I was no stranger to writing. So I decided to try my hand at blogging, relying on Chris’s income as a sales exec and our savings while I worked out the details.
First, I created a goal roadmap, researching everything I needed to know to launch a profitable blog. At the three-month mark, I wanted to have my infrastructure and digital platform in place. After six months, I needed 60 articles on the site to provide a solid base and drive traffic. After a year, my goal was to have 500 visitors per day and earn $6,000 per month.
The six months that followed were defined by late nights and hard work. I even put Jude in daycare part-time in order to get more done. But I ultimately hit my 12-month goal two months early, earning enough to cover half of my household expenses! Almost two years have passed and I'm going stronger than ever. These days, I’m even earning more than I did at the law firm.
The best part? I work from home and enjoy tons of family time. And since my blog is all about travel and leisure, we get to go on adventures fairly frequently. So far, my work has taken us everywhere from Maui to the coast of Maine. Instead of having to choose between work and motherhood, I've been able to create a life that blends both.”
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Robert R. Johnson, 59, president and CEO of a financial education institution in Bryn Mawr, Pa.
"So many of us spend years going through the motions of an unfulfilling job just to collect a paycheck. I'm fortunate to say this isn’t what my life looks like at all, thanks to smart and early investing. For me, financial freedom is the ability to work only because I want to, not because I have to.
I didn't win the lottery or come into a windfall of cash. I credit my financial freedom to simple investing strategies—which ultimately helped me leverage ordinary paychecks when I was just starting out to grow my net worth. After all, growing your wealth is less about the size of your paycheck and more about what you do with it.
Since I began working in financial services education at 27, I've always prioritized maxing out my 401(k) contributions. I also got into the habit of paying myself first. Instead of saving whatever I had left over after spending each paycheck, I'd earmark a minimum of 15 percent of my earnings for savings and investing right away, then create my monthly budget around what was left.
The magic of compound interest has played a huge role, which is why young investors really have a leg up. A long-term horizon was the most powerful tool in my arsenal. After 32 years of consistent investing, I’ve hit my retirement goal number, but choose to keep working because I truly enjoy helping educate financial advisors, so others can experience what I’m experiencing now. I can't imagine a better way to spend my time."