Financial Independence has Changed my Life
We all dream of the day we can retire. When we’re in our 60’s and can sit around, binge Netflix, travel, spend time with family, and most importantly- do whatever the fuck we want when we want.
This is years away, it seems like a lifetime away, and to be frank, it kind of is. You prepare for adulthood for 22 years, work for 40, and relax for, maybe 20 if you’re lucky while your body slowly shuts down.
That’s no life I want to live.
But I also don’t want to be the stupid twenty something, going into debt and blowing through cash now in order to experience everything right now and face the consequences later.
There is a middle ground, and it’s called Finance Independence / Retire Early or FIRE. Fire is the financial concept that you can have your cake and eat it, too. You can have the live you want and live it for 40+ years rather than maybe 20.
So, What is Financial Independence?
Financial Independence isn’t ‘Fuck You’ money. While it can be used as that in dire circumstances, Financial Independence is a nest egg that you have built and invested to live the rest of your life on. Now how do you do that?
Take your future expenses and multiply them by 25. That is how much you need to have invested (some people say a mix of saved/invested, but I’m conservative, so invested) in order to be Financially Independent.
So, if you need $30,000 a year to survive, you would take $30,000 x 25 = $780,000 to be Financially Independent. Note the $30,000 is the pre-tax amount you would withdraw, and from many accounts would have to pay taxes on it.
There’s a lot that goes into that $30,000 or cost of living number. This is why it is critical to track your spending and anticipate future spending (kids, kids college, moving, relatives moving in, illness, etc.).
I want to be Financially Independent so I can choose how to live out the rest of my life and spend my days. It also adds a huge security to one’s life.
<h2> What is Retire Early </h2>
It’s exactly what you think it is! Retire before 65, or more and more so, before 67. Many people who FIRE try to do so in their late thirties to late forties. But anyone retiring before 65 by choice should be celebrated as retired early.
I’m not quite sure if I’ll retire early once I’m at a comfortable level of Financial Independence. It’ll depend on where I am at in life, how many kids I have/want, how much I love my job, etc.
But, Financial Independence gives me options and freedom- and that’s what I want most. The freedom to wake up at 8am, or 9am, or 4am. The freedom to have brunch at 11am on a Wednesday or sip mimosas in a hot tub on a Tuesday morning. Life is about choices, and this is my financial choice.