Financial independence (or having enough money saved to never need to earn money again) is something I’ve discussed numerous times on this blog. I personally want to arrive there, preferably while I’m quite young. The purpose of financial independence seems to be misunderstood though.
I’ve been reading more traditional financial sites lately (hey- it’s good to explore concepts different than your own and keep your mind open!) and it’s apparent that financial independence has a bad reputation in some groups. In particular, when it’s discussed in context of FIRE [financial independence/retire early].
This surprises me.
It seems that for people outside of FIRE anyone pursuing it must hate working/be lazy/ never want to contribute to society/ suck at life.
It’s incredible to read the comments on some FIRE blogs.
I wanted to throw my own opinion into the hat:
I see absolutely no downside to financial independence.
Sure, depending how extreme some people get while pursuing the elusive higher savings rate it can get a bit nutty. If people want to live in dingy apartments eating nothing but rice and beans so that they can save a higher percentage of their income and retire earlier, all the power to them. That’s DEFINITELY not me though.
I don’t even want to retire. I enjoy doing work I find fulfilling. However, I want to be in the financial position that I could retire or change my mind. There’s a massive difference.
Think about your life. Is it completely optimized the way you want?
You might argue that you love your job. If so, that’s awesome! You should love your job. But will you love it 5 years from now?
If you don’t currently have children but plan on having a family, will you still want to do your same job? Would you rather work part time or have more flexibility in your hours?
Would you sleep better knowing that no matter what life throws at you your expenses are covered so you never have to stress about money being the first factor considered?
Have you dreamed of taking a year off work to travel? (and don’t want to stress about whether you could immediately find a comparable paying job the second you return).
Have you ever thought about switching careers to something that excites you but immediately talked yourself out of it because “what if it pays less?!?!”.
To me, financial independence is 100% about having options.
It’s about taking money out of the equation, and wiping the restrictions off your dream board so you can ACTUALLY decide what you want.
Consciously or subconsciously, so many of our decisions are run through the “money filter”. When you have all those bills and debts that need to be paid, you’re restricted in how much you can truly risk. There’s a minimum that you need to earn (and it’s usually quite high). Financial independence removes that.
I don’t support the other side of the coin where pro-FIRE folk believe financial independence will cure all of their problems. If you’re unhappy on the way to FIRE, you likely won’t be happy once you arrive. If you hate your job, don’t stay at it because “in 9 years I can quit working entirely”.
To me, FIRE is about moving towards something. It’s about making your financial life so passive that you open up a thousand new doors of opportunity because “what does it pay?” is no longer the main concern. Instead, you can ask “What do I want to do?”. You aren’t saving tons of money just to have money; you’re saving it to buy your freedom.
If you’re pursuing FIRE to escape a job you hate, you should probably just get a new job now. You don’t know how many years you get on this planet, so don’t waste them.
Money can facilitate happiness, but it doesn’t create it. It can support happiness, but it doesn’t manufacture it.
Personally, we don’t plan on burning our way to financial independence as quickly as we can just to arrive. We won’t be a couple that achieves FIRE in single digit years. There’s things we want to do along the way, and they cost money.
We do plan on getting there though (long before a traditional retirement age). If you’re someone who values having options, it’s an amazing place to be.
Having the option to try new careers/ learn new things. Being financially safe to take time (even years!) off with your family if you desire. Being allowed to change your mind without it crumbling your world.
Imagine who and what you could become if needing to earn money wasn’t part of the equation.
That’s why we’re pursuing financial independence. Wealth to me isn’t about having a lot of money. It’s about having a lot of options.
For further learning/ a different opinion I implore you to check out this speech by Lacey Filpich. I’m a massive fan of TED talks in general, but this one in particular blew me away.