In the previous posting, I noted how my wife and I had both suddenly wanted to play the lottery, an action which was very uncharacteristic for us since we like to plan out our lives and don’t rely on things like a 1 in 146 million chance to decide our future for us.

We decided that we wanted our own version of financial freedom and we wanted to obtain it in 5 years or less. But what did this mean to us? We needed to define what our goal was and since we were striving to meet a specific goal, we wanted measurable results.

So our first task in obtaining our financial freedom was to define exactly what our financial freedom goal was. That may sound stupid, it made sense. If our goal was “to get rich”, then at what point would we know we made it? What exactly is rich anyway?

So if we were striving to meet a goal, we wanted measurable results. We wanted to be able to look at our situation at any time and determine how close we were to obtaining our goal. If we decided that $20 million in the bank was our goal then we should be able to look at our accounts and determine that the approximately $2000 we have in there right now is a mere .01% of the way there (which would undoubtedly make us cry).

Here is what we decided was our financially free goal:

• As little personal debt as possible. This means the house will be paid off, no credit card debt, no car payments, etc.
• Put aside enough money to cover our children’s college tuition and any other money they would need during that period
• Enough *passive* income to cover the following:
• Any “unavoidable” recurring bills (such as the cable TV bill or medical insurance or taxes)
• Two *great* vacations a year. A great vacation for us could be anything from a month at Cape Cod to a month of five-star hotel in Europe
• Two decent daily driver cars, and maybe a third *really* nice car. We both drive Hondas right now and we feel that these cars are just fine for our daily use. The third *really* nice car might be a Mercedes S-class, but I’ve realized over the years that my time is much more valuable to me than any car is.
• And that passive income should be coming in after we are retired. That will be our retirement plan, not a big savings account or 401(k).
• To not *have to* work. We may decide to work because it’s rewarding or fun, but we believe that work is much more enjoyable when you have the ability to make your own choice on whether you want to be there or not. When someone has that power over you (i.e. “do it my way or you’ll be fired”), it just plain stinks

We love our current home and would not move. You’ll notice that our goals don’t include buying a second home to use for vacations or a boat or anything like that. This is not because we want to start small and move up from there. We have talked this over and we just don’t want another home or a boat. To us, these are things we can rent and forget about. I can talk about more on that topic later.

So that’s our goal. We think that five years is reasonable. Maybe a bit aggressive, but still quite reasonable in our eyes.