I thought I would start by briefly explaining what financial independence is and why it’s something I’m striving for. Financial independence (FI) is when your passive income from investments covers your living expenses so you no longer technically need to work. Usually, the goal is to reach financial independence at a young age. Personally, I am hoping to be FI sometime in my 30’s.
Another aspect of FI is early retirement. I personally don’t like the aspect of early retirement because it sounds like I’m trying to not do any work and just sit on the beach all day. But that couldn’t be the truth.
My entire motivation behind financial independence is actually quite the opposite. I want the freedom to pursue things that I’m passionate about without having to worry about money. I want to be able to spend time with family and friends. I don’t want to feel trapped by my job or by money. I don’t want money to hold me back from doing the things I want to do.
The typical path everyone is told to follow goes something like this. Graduate college, get a job, work for 40+ years, save a little each year and then hope you can retire sometime in your 60’s. Take a couple weeks of vacation each year provided you don’t lose your job.
When I was in college, I assumed this would be the path I was going to take. I didn’t want to be stuck in a job I didn’t really like for years on end. I didn’t want to feel like if I lost my job then I might lose my house. I wanted more control over my life. But I didn’t know how to do it.
Well, I came across the concept of early retirement/financial independence at some point in my job and I was immediately hooked. This was something I knew I wanted to strive for. It gave me an alternate path. I was afraid of losing my job as I have some liability/debt on me.
I was, of course, skeptical at first. I didn’t think it was possible. I thought I would have to live like a monk to save enough. But I read everything I could on the subject and did the math out, and I realized it was definitely possible. By controlling your spending you can drastically increase how much you save every year. And if you invest your savings you can retire much earlier than I thought you could. This requires patience and discipline of course.
FI isn’t about not working or being lazy. In fact, I am still working on a full day job. It’s about having the freedom to do what you want with your life without always having to worry about money. It’s about spending time with your family and friends. Living life to the fullest. Pursuing your passions. (Writing is my passion). Working for a non-profit. Helping those less fortunate. Making a difference in the world.
That’s my motivation behind financial independence.
What is yours?