My Plan to Become Financially Independent in 5 Years? Doable?

Ok, I'm really beginning to like this forum and what it has to offer, I was particularly impressed with another thread and thought I would post my plan here for intense scrutiny!

I want to retire in 5 years! I will live in $500 per month adjusted for inflation. To make $500 per month I need savings of £150,000 assuming I can get a 5% interest rate yield in 5 years. To make $150,000 in 5 years I need to save $30,000 per year. After tax I am on $37,000 which means that I need to live on $7000 per year! Here are the lifestyle adjustments I plan to make. On the record I have no debt and no savings at the moment. I live in an apartment that was left to me by my parents which I am eternally grateful for

- I will sell my car and walk to work
- I will only eat the cheapest food available
- I will cancel all subscriptions
- I will not buy any more clothes, only make or repair
- I will go out occasionally

5 years is a long time but being free to do whatever I want to do is something I yearn for, once I'm financially independent I could even travel the world if I rented out my apartment!

Please offer any constructive criticism, will this work?

Great thread, I'm also liking the plan. I would be careful though, living on $7000 per year in very near the poverty line and will take some extreme discipline. You seem to have all your financial affairs in order and practice the all important frugal habits needed to be successful with money. Why don't you also focus some energy to generate passive income? If you can somehow generate an extra $1000 per month you could probably knock another year off your plan, if you can generate $3000 extra per month you can achieve your goals in two and a half years. Seriously take the time to look at ways to generate more income.

I've got some book recommendations that will help you.

Passive Income

Both the books mentioned here are excellent, if you're serious about retiring early then you need to plan offensive (Passive Income) and defensive (Practice Frugality).

Another factor you need to plan for is inflation, if the price of things keep on going up you need to generate more income, also if you use all the interest on your savings your savings pot will be eroded thanks again to inflation. Your plan is good and doable but you need to take inflation into account.

Another concept that you could consider is Geo-Arbitrage, this is where you earn dollars but spend in bahts. If you're planning to relocate then you could rent your apartment out and then go to a country where the cost of living is minuscule compared to America, places like Thailand and Indonesia look very cool. If you can earn money in dollars and spend in bahts you can live the life of a king and almost certainly retire early. Here's a video of the 25 cheapest places to live in the world.

For a young person like me whose been indoctrinated to work all my life and retire with a little dignity I must say this is mind blowing. I didn't even entertain the thought of retiring early and now my mind is slowly working towards it. If I can retire before I'm 25 then I can enjoy the rest of my life!!!

Ok, This is what I'm going to do, read all the books, start practicing frugality, make money online somehow (if someone can make money then I can make money). Save 100% as I'm living with my parents and be daddy's little girl for other expenses. Convince my dad to but a home for me as a present, I recently asked for a car however if I can sell him the benefits of a house he'll probably give me the deposit! Then move to Thailand after 5 years. Awesome, Doable. Thanks FindSomeMoney.com

I really think everyone should slow down, I mean saving 90% isn't easy and you will fall off the wagon from time to time. Also living on $7000 is near the poverty line, I doubt anyone can do it for five years. Your initial burst of energy falls after a few months and you will be tempted to go back to the life of ease and convenience. I don't mean to put a road block up on a freeway but it's easy to get carried away and let others to do the same. I have not heard of a solution for inflation yet. Sorry for killing the mood.

Interesting thread until Hamza posted valid point though. Can you imagine how hard it's going to be living on $7k? It can be done but is it worth it? denying yourself all pleasure is soul destroying sometimes.

This thread was so positive, the negative comments have really stopped everyone's creative juices.
It depends on the person and how bad the person wants to retire, I really want to retire as soon as possible, I hate working and I love enjoying life. If I'm gonna live till 60 then just suffering for 5 years to enjoy the next 25 is more than worth it. I will do it and can do it.

We need some positive commentators!

Have tried to increase your income? You could hit your goals much quicker. I also focused most of my energy on cutting costs and living frugally but it's only when I started to make extra money I realized my goal of financial independence. If I were you I would network with other like minded people who value financial independence, look up Pat Flynn of Smart Passive Income and you'll be blown away with the progress he's made in a short while. There's no reason why you can't earn $10,000 per month.

This is completely doable, there are lots of people who are also doing it. It takes a lot of determination though and you've got to be committed. I agree with the other comments about not just focusing on frugality, you also need to make more money. The Geo-Arbitrage concept really made me smile!

It's certainly doable, you should even document your progress online on your own blog. Lots of people are interested in becoming financially independent and look forward to retiring early. If you can document your progress in a way others can follow you could develop quite a following and even monetize your site making some income on the side. Like the plan, good luck.

Yes, its entirely possible to become financially independent. In your plan you focus a lot of slashing your expenses which is fine and will help you reach FI faster. You should also focus more of your attention on multiplying your income stream and increasing your income for all your income streams. The more income you have coming from more places the more money you can invest in assets that pay income so you can eventually become a man of independent means. Your income could come from a job, a second job, a internet business, renting out space/room. You could then invest the income in property for rent, stocks for dividends, in bank accounts for profit etc etc. Its definitely possible and more and more people are thinking like this. I really hope things work out for you! Adios