Simplify Finances

Is Financial Independence Right For You?

So, I have to be honest. I have ulterior motives for why I track my expenses. I have a goal to achieve financial independence. What’s financial independence? It’s when you make enough money from investments (stocks/bonds, real estate, savings, etc) that you no longer need to work to provide income. This doesn’t mean you have to retire and quit your job, just that working becomes a choice, not a necessity. You’ll often see this referred to as financial independence (FI), early retirement/retiring early (RE), or FIRE.

Is it really possible to achieve FIRE?

Doesn’t it take like 30+ years to save for retirement? Not if you do it right. Go read this article, The Shockingly Simple Math Behind Early Retirement by Mr. Money Moustache and then come back, I’ll wait.

What do you think? Does it spark your imagination and get you excited, or does it seem too unbelievable? Maybe it just sounded confusing and you wouldn’t even know where to start- don’t worry, that’s why I’m here. The first time I read that article I felt like I’d just stumbled upon the best-kept secret. The main idea behind FIRE is to live beneath your means and invest your excess money. (Now do you see why you should track your money?) The more you can increase your savings rate (the gap between how much you earn and how much you spend), the faster you can achieve FIRE. I know, easier said than done, right? If you can stay focused on the end goal and keep an open mind, I’ll have lots of ideas for you in future posts. So what is your end goal?

Why should you aim for FIRE?

It’s that little word “independence”, it gives you freedom and leverage. I’ve got another article for you, Why You Need F-U Money, by Jim Collins. Go ahead, I’ll wait.

Sounds pretty nice, huh? FIRE gives you the freedom to make choices based on what you want rather than based on your need for a paycheck. FU money is a little different than full-fledged FIRE, but that’s something we’ll talk about another day.

What are the things that make you happiest in life?

Sit down and make a list of the top 10 things that make you happiest in your life. Since you’re already writing, think about what your perfect day looks like and write that down too. I don’t just mean laying on the beach, sipping margaritas, that’ll get old after awhile. What are your hobbies? Skills you’d like to learn or hone? Topics you’d like to learn more about? Places you’d like to visit? Things you’d rather be doing than sitting at the office?
Now, look at your top 10 list. Are any of the things you listed material possessions? I bet most of the things on your list don’t cost money, but instead are people you love, activities with those people, hobbies, etc. Don’t worry if travel featured largely on your list, we’ve got a hack for that ;)

Why am I working towards FIRE?

I have a number of reasons I want to achieve FIRE. First off, I have too many interests and not enough time. Some days it feels like all I do is go to work and take care of house chores. This does not a happy Jo make.

I hope to start a family in the near future and I desire to be home to raise my kids myself. I realize you can have a career and raise kids, but I’m learning I’m not as career motivated as I thought I’d be. In our current situation, being home won’t be possible, but it’s something I’m working towards.

This next point might sound a little morbid. For some background, my husband and I have been married for a little over 2 years. My husband has a rare genetic disease that caused his kidneys to fail when he was 8. A transplant won’t help, so he does dialysis 3 days a week. So, his life expectancy is kind of unknown (though I guess that’s true for everyone), though I’m doing my darndest to keep him healthy. The point I’m trying to get at is that I don’t intend to spend a minute more away from him than I have to. FIRE would give me the freedom to spend more time with the man I love.

How’re you feeling about FIRE? Have I piqued your interest or do you just think I’m crazy?

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