I have noticed that more people are attracted to seeking out work that they have a personal connection with, particularly since the beginning of Covid. That is, for a growing number of people, the emotional rewards (satisfaction) that their work offers is becoming more important than the financial rewards. This might include working in the not-for-profit sector, working for a socially conscious organisation or starting their own business.
Of course, not everyone has the flexibility to immediately resign from a high paying job. But of course, you can put a plan in place that allows you more freedom and flexibility in the future. I wanted to discuss the common considerations we tackle when working with clients in this regard.
Three phases of wealth accumulationIt is important to recognise that there are typically three phases associated with becoming financially free as illustrated below.
Chart
Phase one: Accumulation – this phase involves accumulating the required quantum of assets needed to fund retirement. That could include acquiring investment property(s), making additional contributions into super, investing surplus cash flow into shares and so on. This phase typically requires you to contribute as much cash flow as possible i.e. to maximise your earnings and minimise your expenses.
Phase two: Income flexibility – the main aim of this phase is to give your investment assets enough time to benefit from the power of compounding capital growth. This phase requires you to earn enough income to pay for living expenses and maintain your investment portfolio. That is, you may have flexibility to earn less during this phase either through changing roles or not working full-time.
Phase three: Retirement – it probably goes without saying that this phase doesn’t require you to generate any personal exertion income. All living expenses are funded from your investment/asset pool.
Therefore, if you would like to get yourself into a position where you have more choices regarding the type of work you do (i.e. less pressure to

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