Financial Independence

A Guide to Start your Plan of FI

In the PT profession, we write short- and long-term patient goals. These goals determine our course during the sessions and ensure the effectiveness of our training and treatment. A guide that lets us know how to begin treatment, increase or decrease exercise intensity and discharge our clients once our goals are achieved.

In our FI journey, we also applied physical therapy critical thinking skills in establishing a financial baseline, knowing our strengths and weakness, and formulating our Plan of FI. This approach allowed us to plan during the pandemic and advance despite the uncertainty.

Start living your life the way you imagine it to be.

When FI finds us, we will be at different stages and circumstances in life. So here are short-term goals you can make that will take you closer to your long-term goal of being Financially Independent.

1. Ask your “Why of FI.

Begin with the end in mind. Lay down the track for your journey for the next few years. The answer to this question will be the framework that holds up your goals and the fuel that drives you when things get rough. Your “Why” is not set in stone. It will change as your life changes but will be the same at its core. True happiness.

2. Know your Net Worth

Net Worth = Assets – Liabilities

Tally all balances from your savings, investment, and retirement accounts to know your Assets. The following figure you would need is your Liabilities, consisting of all debts such as student loans, mortgages, car loans, personal loans, etc. This is your financial health, and you’ll work to strengthen it.

3. Track your Income, Lifestyle Costs, and Savings

Add all after-tax dollars you receive from all income sources for the month. Then tally your Lifestyle Costs into housing, transportation, food, travel, medical, shopping, entertainment, etc. We recommend doing this in classes to plan easier when it is time to optimize. Calculate Savings from here.

Income – Lifestyle Cost = Savings

No budgeting, accounting, or any action is needed at this time. You just want to know how money comes and goes into your life.

4. Determine your FI number

This is a significant number to know, even if you don’t want to retire early. It will give you a sense of enough both on the nest egg you need to accumulate and the years of life you must spend working.

FI Number = Annual Lifestyle Cost x 25

FI number is the amount of money you should have invested in supporting your lifestyle cost at retirement. Once you have this, you can live off the cash flow from your investments. This opens a world of options for you, from working fewer hours and extended time-offs to full retirement.

5. Estimate your FI timeline

Do you know how many years it takes until work becomes optional?

FI Timeline (years) = (FI number – Net Worth) / Annual Savings

It is possible to change these numbers. Your FI number and Annual Savings can be tweaked by adjusting your lifestyle cost, and your Net Worth can increase by acquiring Assets and eliminating Debt.

Take seemingly small and insignificant steps that will yield staggering results!

6. Build an emergency fund

Give yourself a cushion to make sound financial decisions. For example, having an emergency fund would make you less likely to stick to a job you hate, get into high-interest debt, or take money out of your retirement funds.

For starters, it doesn’t have to be huge. For example, 1000 dollars could cover emergency expenses and get you to the next paycheck. Just make sure you only use it for real emergencies. Eventually, save at least 3 months of expenses or more, depending on what would give you peace of mind.

7. Optimize Lifestyle Cost for happiness

Right down the 10 things that give you true happiness in the present. (From the book Playing with FIRE) You’ll be surprised to know when all your basic needs have been met, you’ll be pleased with the simplest things.

Here are a few ideas on how you can optimize lifestyle costs.

Look at your Lifestyle Cost and revisit each line item with your 10 Things list in mind. Then, revise your lifestyle Cost reflecting your priorities and optimizing for happiness.

8. Plan to pay-off high interest-rate debt

Get rid of Debt with interest rates higher than expected returns from your investments. Typically, this is around 4%, but this will all depend on your comfort level. For example, you may be alright keeping your 2.5% mortgage around or may not want any interest-rate debt hanging over your head, so pay it off.

Include Debt payments in your Lifestyle Cost list to make them part of your priorities. Research on the Debt Snowball by Ramsey Solutions, this method uses the power of small wins to keep you motivated in getting rid of pesky high-interest debt.

9. Invest

This was a scary and confusing area of personal finance to me, but there is no other way around it. As the prices of everything increase, the dollars you have now will not have the same purchasing power in a few years.

Investing in the stock market safeguards your dollars against inflation and lets you use the magic of compounding interest. There are risks, but this is mitigated by investing regularly (dollar-cost averaging) in low-cost, widely diversified index funds in a longer time horizon.

Start your FI journey NOW! Leave the days of not knowing where your paycheck went. Give yourself margin, so you can sleep better at night. Instead, build your present life and secure retirement by asking what you want your life to look like and taking the next logical step to take you there.

What are you currently working on in your Plan for FI? Do you know of any other steps that we may have missed? Tell us in the comments or visit us on our Facebook page!

About Us

We are a Pinoy Physical Therapist duo living somewhat unconventional but intentional lives. Trying to be smarter and better than before, we surround ourselves with content, experiences, and people that help us discover practical yet powerful ways to achieve our goals.

We aim to be financially independent by making small changes to our lives. We invite you to join our journey! We hope that you learn something valuable from our experiences.

Follow us on YouTube for more money and travel tips! Please comment below or visit our Facebook page with questions or suggestions. See you soon!


We are NOT certified financial advisors, analysts, or CPAs. Investing strategies shared in this article and the website are not financial advice but our opinions for educational purposes only. We want you to treat our content as a preview to do your research so you can make intelligent financial decisions.


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