How millennials can find financial independence

How millennials can find financial independence

New year, same movement. The FIRE (Financial Independence, Retire Early) movement remains a big thing.

How can millennials find financial independence?

Can millennials find FI via leverage?

What questions are millennials asking themselves when it comes to wealth building, saving and investing?

This post explores some answers: how millennials can find financial independence.

What do millennials want? Some millennials want financial independence!

While some age ranges will vary depending on the report you read, the millennial cohort (GenY) was born between 1981 and 1995, which puts millennials in the age range of 27-41 in 2022.

As you well know from my site, and my own journey, I believe your 30s are critical years to define your financial wellbeing. Many important life decisions are made during this period of life, such as career selection, buying a house, potentially getting married, starting a family, and much more.

The lifestyle and consumption decisions you make in your 30s could very well define your 40s and future decades, including how much wealth you can build.

In the succinct and well-written book If You Can – How Millennials Can Get Rich Slowly by William Bernstein, there is a simple five-step formula to help millennial investors realize some financial independence dreams. I encourage any 20- or 30-something reading this site to download and read that FREE e-book from my link above or below. I think it will be impactful.

Millennials Can Get Rich Slowly – If You Can

While some millennials will be the major recipients of some of the largest wealth transfers in history, now underway from a mix of older GenX and Boomer parents, via large financial gifts, I suspect some millennials will not have that luxury to rely on for their financial footing.

This means many millennials will need to do what I have done: make their financial independence dreams happen on their own.

Personally, I’m a huge believer in charting your own financial path and not relying on others to do it for you. Sure, you’ll make money mistakes along the way (I have) but you’ll also learn to think for yourself and hopefully hone some critical thinking skills along the way.

Further Reading: My lessons learned in diversification. 

Millennial investor profile – Liquid from Freedom 35 Blog

For many years now, I’ve been inspired and motivated by financial independence. So have other investors that I’ve had the good fortunate to connect with by running this blog. So, in that light, I’ve also been inspired by their stories and what they do differently.

You can read many of those stories on this dedicated Retirement page here. I’ll link to some others below.

One blogger in particular that has an interesting story and some lessons to share is “Liquid” from Freedom 35 Blog.

Liquid moved out of his parent’s basement when he was 21 and hasn’t looked back – paying off some small student loans and building up his net worth recently (now in his mid-30s) to $1.5 million. His long-term goal was always to be “financially free before his 35th birthday”. That goal is now achieved. He ’got there’ by controlled leverage, value investing, taking advantage of market corrections, swing trading, dividend investing, alternative investing and more.

I thought it would be fun to have Liquid on the site, share a bit of his story, and discuss how he used leverage wisely to realize some financial independence dreams far earlier than most.

Liquid, welcome to the site and thanks for your time!

My pleasure Mark and very happy to spend time with you and your readers!

When it comes to our financial journey in general, I know we’re just ‘not there yet’ and I’ve got a few years on you! We are I believe, on a decent path – saving, investing and killing mortgage debt at the same time. Folks are quite familiar with my plan but maybe not so much about you!

Tell us about yourself? In what field do you work, did you work in?

Thanks Mark. Well, I have been enamored with finance and business since I was 18. But despite my best efforts to get into business school I was rejected because of my poor grades. I ended up taking applied sciences instead. But that was a mistake. The program was so difficult I failed all my classes. I was forced to drop out after the first year.

After flunking college, I found a job at Safeway, making minimum wage. Luckily, I was still living with my parents at the time.

One day in 2007 I noticed a local art school was offering a one-year program in graphic design. I’m clearly not academically gifted. But maybe I can draw. I thought it was worth a shot. So, I enrolled.

I received my diploma the following year at age 21 and began my career as a graphic designer. My starting annual salary was $35,000.

Today I’m a senior designer at a large entertainment firm making $75,000 a year. Although it wasn’t my first choice, I am happy with my career decision and how it turned out. The pay is decent. And I can save money to pursue what I’m truly passionate about – finance and investing.

Great stuff. You have found your passion with investing for sure. How did you get started with investing? When did you start investing? What is your investing approach?

In 2009 I wanted to move out of my parents’ basement. After considering my options I concluded that buying was better than renting. So, I purchased a 2-bedroom apartment in Vancouver for $230,000. 

This was my first investment, and my first home. At this time, I had $15,000 in personal savings. Not much. But it was enough to cover the downpayment and closing costs. Then I began to invest in the stock market, and other asset classes.

My investing approach can be broken down into 2 parts.

The first part is to mimic the strategies used by the best investors.

Allan Mecham was a college dropout like me. But he managed a fund that compounded at 30% a year.

Activist investor Bill Ackman produced a 70% investment return in 2020. But his long-term record is more like 20% a year, which is still pretty good. Macro investor George Soros managed a fund that returned 30% a year on average for many decades. And of course, value investors like Mohnish Pabrai and Warren Buffett have outstanding long term track records as well. 

These public figures in the investment sphere have written books, appeared in interviews, and spoken on podcasts to discuss their ideas, strategies, and outlooks on the markets. Bill Ackman even has a list of 8 core principles that he uses to screen investments. Whenever he deviates from those principles his performance suffers. Furthermore, it’s easy to find exactly what these investors are buying because they have to submit 13F filings regularly to disclose their holdings publicly. 

By understanding what these successful investors are doing with their money, I can essentially copy their methods and buy the same stocks as them. This naturally leads to my portfolio having the same kind of high returns as them.

Often the top performing investors will like the same stocks. But sometimes their strategies diverge so I have to decide which one works the best for my situation. 

This brings me to the second part of my investing approach, which is to document my investment transactions and track the results. I like to use a spreadsheet for this. I also like to track my thought process, and the reason for making my decisions. This allows me to go back, review what happened, keep what worked, and throw away what didn’t so I can improve my process for next time. This experience has helped me become a better investor over time.

Copy the best, or at least tailor what the best do for you. Good stuff. So Liquid, like some other millennial bloggers are you a fan of FIRE? Why or why not? Have you achieved FIRE or FI? What is the key difference in your opinion between FIRE / retired early or FI or are they same to you?

As a kid I was constantly being told what to do (or not do) by others, and it was frustrating. Despite all the guidance I still felt a lack of direction. However, once I grew up and started to live on my own terms, I began to discover more purpose in life. I was free to make my own decisions and it was liberating. There was just one problem. I still had to work to put food on the table. That’s when I discovered financial independence. 

I deeply value freedom so I made it a priority to become wealthy. I’m a fan of FI, but I don’t know about FIRE. I achieved financial independence in 2020 so I consider myself to be FI right now. I’m turning 35 later this spring. And that’s when I will hand in my letter of resignation and quit my 9 to 5 job permanently. Although I will be retired from full time work, I wouldn’t consider myself to be “retired.” There is no universal consensus on what retirement means anymore as the world embraces Web 3.0 and the gig economy.

You’ve had some interesting investments over the years on your path to FI. Can you highlight some investing successes or mistakes along the way? What did you learn from those lessons to help you move forward that might help other millennials reading this?

I’ve been very fortunate to see high returns investing in exotic assets such as Zimbabwe’s banknotes and Playboy magazines. 

(Mark: that’s funny but good!)

But I often learn the most from the investments that didn’t do well. 

One of my earlier investing mistakes was buying a leveraged volatility ETF that makes trades in the futures market. I knew this fund was risky, but I didn’t really understand what made it so. I initially wanted to make a quick swing trade. But when the ETF’s price fell, I held on – waiting for a reversal instead of cutting my losses. That was the wrong decision. Eventually a lower VIX and the adverse effects of contango wiped out 99% of my position, and I lost $2,000. From then on, I only invest in things that I actually understand. I learned the importance of knowing what I own. Today I can explain any investment I have to a 4th grader, and I can delineate why I own it.

Another time where I made a mistake was being too complacent with my farming business partner. He was working on site and making more than his fair share of the operating profits. I knew he was taking advantage of me but since I lived 2,000 km away there was little I could do remotely. Eventually I sold the farm for a tidy profit, but I should have screened for a different person to work with. Warren Buffett famously said if you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes. That sage advice translates to people as well. More important than what you do is who you do it with. So, it’s necessary to conduct your due diligence on the people you expect to spend time with. If you can’t see yourself working with a person for 10 years, then don’t work with them for 10 minutes – whether it be an employer, a business partner, a spouse, or a tenant. Surround yourself with high quality individuals who have integrity and long-term aspirations. The only relationships that are worth investing in are the ones that last.

Well put. Many millennials seem to struggle with debt and investing, including just starting out. There is some paralysis by analysis with so much marketing and information out there. What would you recommend to others (millennials or GenZ) who want to get better at debt management or investing?

For young people struggling with debt, it’s useful to remember that debt is never the problem. The problem typically stems from one’s unhealthy relationship with money. Focusing on getting out of debt is often the wrong approach because unwanted debt is merely a symptom. And the cause actually happened in the past, when the individual thought it was okay to borrow money in the first place.

Reasons are different for everyone. But it’s common to become indebted because of willful ignorance. This can happen when someone signs a credit card agreement without understanding the financial implications. If they don’t see a problem with that – then they will repeat the same mistake again. However, when people develop a healthy relationship with money, good financial habits automatically replace any bad ones. And the unwanted debt will eventually take care of itself because the individual has become someone who enjoys being financially responsible.

In terms of becoming a better investor, start by investing in your own human capital. When you’re just starting out, growing your income matters way more than how you invest your money. This is because investment returns don’t impact your finances very much if you don’t have much capital. Consider that a 3% return on $100,000 represents a bigger dollar gain than a 20% return on $10,000. So, focus on your career first, or your business if you’re self employed. Make more than you spend. Invest the difference into a diversified, global equity index fund. And go from there. 

Once you have built up a sizable nest egg, you can look for ways to optimize your returns, plan for tax efficiency, and potentially add alpha to your portfolio.

Do you have a portfolio or income goal in mind? If so, what is that? Why and when? How will you achieve that goal?

I have a portfolio goal of $10,000,000 and an annual passive income goal of $400,000 before tax. This portfolio size and income will make me feel 100% financially secure. 

My portfolio has consistently returned 20% or higher each year since 2009, when I began investing.

Assuming I can maintain a 20% annualized return going forward I will reach my portfolio target in 15 years.

That’s a massive number – but I hope you get there of course. What key books, references or resources would you recommend to others seeking financial success? Any takeaway messages for readers including how behaviour might play a role in any financial success?  

Financial success is mostly about making a series of good judgements. In order to make good judgments you have to start with knowing yourself. That’s why the best books to read for financial success aren’t books about money and finance. Instead, they’re books about philosophy and personal development.

Exploring classic literature on stoicism is a good place to start. You can learn how to accept what you can’t control (such as market volatility), so you can more effectively manage what you can control, (such as allocating capital.)  

Letters From A Stoic by Seneca is a book that demonstrates the importance of valuing time, dealing with anxiety, and being content with enough. These are all valuable lessons that apply to earning, saving, and investing. 

Changing gears to Eastern philosophy, The Tao of Pooh by Benjamin Hoff demonstrates the importance of pursuing what comes naturally to you, trusting your gut, and solving problems instinctively.  

And finally, I have to mention the classic, How to Win Friends & Influence People by Dale Carnegie. There’s so much truth about human nature in this book. Personal finance is 20% know-how, and 80% behaviour. Knowing how to deal with people’s biases and motivations is a priceless skill if you want to attract financial success and convince people to work with you.

The final takeaway message I have is to encourage readers to find ways to multiply results. In other words, instead of receiving your regular wage, you get paid 10 times, or even 100 times for the same hour of work that you do. 

Angel investor Naval often speaks about the different methods to achieve this. The oldest way is through the leverage of labour. Instead of doing all the work yourself you hire other people to help you build and produce faster. This is how businesses start.

The second way is to use financial leverage. As an introvert this is my personal favourite because it doesn’t require people skills. I can simply use other people’s capital to invest and increase my own investment returns. 

The final way to multiply your output is to leverage technology. For example, if you use a chainsaw, you could probably fall 10 times as many trees as using an outdated axe.

In today’s world, most technological tools revolve around computers and the internet. If you learn programming, you can leverage your software skills in any industry to create digital tools for others to use. 

Perhaps you have a very particular set of skills. Don’t be taken by surprise if others want to learn from you. Maybe you can offer an online course and sell it to millions of people around the world instead of giving separate lectures to a limited audience each time. The democratization of technology means anyone can become a creator, an influencer, an entrepreneur.

You don’t need to implement any of this right away. But just being open to the possibility of using leverage can increase your future financial prospects when the right opportunity comes along.

Of course, leverage necessarily comes with added risks and responsibilities. With labour, your employees may end up costing you more than the value they produce. With capital, you may lose other people’s money or struggle to pay back the debt. And new technology may fail, or even backfire if used incorrectly. 

This is why before implementing any kind of leverage; you first have to be confident in your ability to make sound decisions. If you have good judgment, and somehow find a way to make use of all three types of leverage, then you will be unstoppable.

Liquid’s focus does appear to be a bit unstoppable.

I wish him well and I hope you consider following his journey.

How millennials can find financial independence

I have no doubt that leverage, borrowing to invest in yourself to build your skills, stocks, real estate or other can work out tremendously well – building wealth using OPM (other people’s money) has been occurring for millenniums even before millennials were coined as a cohort.

In my readings over the years, the two biggest research topics that are most searched and associated with millennials are: homeownership and (early) retirement. For millennials, homeownership is a prospect in near-term for most while retirement is much further away. With many millennials having a more precarious long-term employment situation, coupled with more volatile earnings than previous generations, their financial situation may be less predictable. That certainly doesn’t mean this cohort cannot build wealth successfully as Liquid has demonstrated.

Whether you are a millennial, GenX (like I am) or much younger as part of GenZ, I think we all want to feel some sense of reassurance about money. As Liquid has shared, financial literacy is important but largely the biggest factor when it comes to financial success is to know thyself and your own limitations.

I look forward to sharing more investor profiles and case studies on my site. Let me know what you’d like to see more of on My Own Advisor and I’d be happy to try and tackle any subject for you!

Thanks for your readership.

Just a few related millennial and financial independence articles on my site:

Read on about this millennial DIY investor and real estate investor.

Here is another savvy millennial journey to early retirement. 

This millennial couple wants to FIRE at age 50 – what will it take? How much will they need?

Here is one proven path to retirement ignoring any 4% rule.

Karla and Toby are 54 and 56. Can they retire soon with $1.2 million in the bank and no company pensions?

Mike and Julie want to spend $50,000 per year in retirement starting in their 50s…how much do they need?

This investor retired at age 32! Learn how here.

Tiny Thought for the Day:

“Do less but do better.” – Any energy that goes into what doesn’t matter comes at the expense of what does.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

23 Responses to "How millennials can find financial independence"

    1. Thank you Mr. CBB. It’s been a privilege to follow you as well all these years. 🙂 You, Mark, and myself have been doing this for so long, it feels like the personal finance blogging community has changed so much since we started, lol.

  1. Great interview, Mark and Liquid. Congratulations to Liquid doing so well at this young age. I absolutely agree with you regarding becoming an independent thinker and know yourself very well, also reading and learning from smart minds/masters are the starting points, but ultimately, come up a plan to suit yourself.

    Very inspirational for people at any stage of their investing life.

    1. That’s exactly right, Angela. When you first learn to paint you have to take inspiration from other great artists.
      But eventually you find your own style and can use it to uniquely express yourself.

      When you first learn how to decorate your home you have to reference interior design magazines or ask experts for ideas.
      But eventually you become so good at decorating you can create your own design to make your living space look and feel exactly the way you want.

      Any creative skill will roughly follow these same steps, including financial management. It is not often discussed, but it makes a lot of sense to think about it this way. Start by learning from other wealthy individuals. Once you have enough knowledge you can develop your own path towards freedom. 🙂

    1. Yeah, Mark put a ton of work into this one. 🙂 It really shows.

      I think what I’m doing is interesting to some people because I don’t use a cookie cutter investment strategy. I treat making money like any other skill. The best way to improve is to practice, experiment, and develop a genuine passion for it. 🤗 And since we all have different proclivities, the only way to reach our full potential is to become independent thinkers and create our own investment plans, which should naturally look different for everyone.

    1. It was an error in judgement on my part. Long story short, I purchased some magazines that was going to be discontinued. I thought my collection would become more rare and desirable over time. But Playboy unexpectedly went in a different direction and my investment that once had great potential, ended up turning into a bust.

      But I’m okay with these kinds of busts. 😏

  2. Loved this post, I knew you were in graphic design but didn’t know you didn’t get into business school and dropped out of applied sciences (I am guessing engineer with INTJ personality, eh!).

    Wow, $10 million that’s a big number and 20% annually very impressive!

    Looking forward to reading your “FI” post this spring, congrats on doing so well without a 6 figure income!!

    1. Thanks GYM. Your guess is correct. I dropped out of engineering, haha.
      Building a $1 million portfolio was a huge deal 20 years ago. But it’s now a realistic goal for more people than ever before.
      I think in the same sense, $10 million in the future will feel less impressive than today due to inflation. 🙂
      I hope everyone is well positioned to take advantage of assets that will benefit the most from the changing economic landscape we’re about to witness.

      1. Gosh, $10M is a bundle though…that would be generational wealth even with inflation rising Liquid.

        We know that clients we work with at Cashflows & Portfolios, with about $1.5M invested now and with CPP and OAS coming to supplement their income in a few years can spend $60-70k per year without fail and never run out of money starting in their 60s, even with higher inflation than 2% like the BoC wants.

        Any particular assets you have your eye on? What should other millennials be investing in?

        1. $60-70k in annual spending plus inflation sounds amazing. They clearly planned for retirement well.

          I would encourage other millennials to consider investments that they are naturally curious about and use first principles to help them make optimal financial decisions. Personally I’m looking at traditional inflation hedges such as prime real estate in growing cities. I’m also considering highly profitable businesses that have strong pricing power. These would include stocks like BlackRock, Visa, or Costco for example. Of course the tricky part is buying them at reasonable prices. 🙂

          1. Yes, RE is a wildcard these days – quite the party thanks to multiple years of low rates. I like BlackRock (own it for a few years now) and Costco is arguably one of the best subscription-based models out there. I think Visa and MasterCard are ripe for disruption but we’ll see…too big to fail? 🙂

            Yes, $60-$70k per year in inflation fighting income is pretty darn good for most retirees I would think – no significant debt in retirement and not saving for retirement makes a huge difference.

  3. Thanks for featuring me in this latest investor profile, Mark. 🙂 It’s a real privilege.

    Everyone is on a different personal journey but in many ways we’re all aiming for the same destination in one form or another, which is financial security and the freedom to spend our time as we see fit.

    That’s why it’s so important to share our stories and ideas. We can help each other adopt useful habits and mental models to make more effective decisions. I love doing the small things with consistency and watch how they inevitably turn into the big things that I want. 🤗

    1. Happy to share Liquid.

      I like doing these profiles for that reason: to share, to learn.

      Big wins start small 🙂

      My best wishes to you in 2022 and I look forward to reading more of your content this year.


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