So why should we be interested in financial independence? Listeners to this show will soon understand that my philosophy is not purely about the maths but about living a great life. You can make yourself richer in so many ways outside of money, and this is a very personal journey. But, because of the way western society has evolved, we need to use money as the enabler to better life choices. There is no getting away from it, no matter what side of the political fence you sit on, we live in a capitalist society. Over generations, we have indoctrinated to go to school and prepare for the workforce, make ends meet, live for the weekend, holidays and finally the holy grail of retirement at 65 plus. Now I don?t need to turn this into a conspiracy theory episode on why this occurred ? the fact is it has occurred.
I for one was not taught about money and how to handle it at school, let alone how I could free myself from being a slave to money through working out a journey that doesn?t involve working in a job that doesn?t completely fulfil you, just to pay the bills. I have to say that the education system in New Zealand at least does seem to be moving in the right direction as little Stella has been introduced to money management, but it doesn?t go far enough. What ultimately are we managing our money for, is it just for a rainy day, or to save enough to retire eventually?
In my personal opinion, even certain parts of the FI community can take their principals too far. I am all for sacrifice in the short term for the long-term goal of financial independence, but maybe we need to re-define what financial independence actually means. First of all, you may have noticed I have once mentioned FIRE so fare, FIRE means Financially Independent, Retired Early. I know certain members of the community are uncomfortable with the Retired Early part of FIRE as it could imply how we traditionally think about retirement; in other words, no work.
I and others believe that financial independence purely means not having to rely on the income from a job to cover your standard of living, but you may really enjoy that job, it may fulfil you, you may achieve self-actualisation as a result of that job ? so why would you give that up? I believe, just like happiness, financial independence should not be a destination, it should be a journey. Life can be too short, so I for one don?t want to work my self to an early grave, in a job and conditions I hate ? just because the salary is good, and the maths means that in x number of years myself and my family can be financially independent.
This is where we have to ask ourselves some really tough questions. What really fulfils us, what makes us happy and importantly on a day to day basis what makes us content. I say this because a mentor of mine once told me that happiness is a two-sided coin and can only be realised through also experiencing unhappiness. Whilst experience unhappiness is not unavoidable, through this definition, the goal should not necessarily by happiness but simply contentment. So what are the few things in your life that make you truly content? For me, it, is my family, very close friends and a sense of accomplishment through creating things that are completely within my or my family?s control. I think this may sit true with a lot of people in the FI community as being an employee for people like us can grate the wrong way even if we actually love the day to day tasks, we ultimately want full ownership and accountability for what we create.
Here is a confession, at heart, I am a capitalist, and I believe in capitalism, and maybe that is through the indoctrination of the education system ? but capitalism in its current form no longer works for me, and it certainly doesn?t fulfil me. The reason being is that unless you are at the very top, i.e. you own the whole shebang, you are simply a tool to get particular jobs done in a system to generate wealth for the owner. All CEOs are even tools; some CEOs are bigger tools than others. They may get paid the big bucks, and believe they are in control of the decisions they make for the greater good of the people that work in the company and their customers, but ultimately, they are making decisions that are heavily influenced by a private owner or arguably worse to better the share price. This is not to say that contentment and happiness cannot exist here, as the values and direction of the workers and the owners can be completely aligned, but for people like myself that want ultimate control of the decision making around my own creativity and direction for my family, fulfilment doesn?t not lie amongst the workforce in today?s society. This was a big part of ending my MBA journey after completing the first year. It was a successful year as I achieved 5 As and 3 A-minus across the full spectrum of business modules but decided the end goal appeared to be a pathway to senior management and ultimately a CEO rather than true entrepreneurship or at least the entrepreneurship I aspire too which is not on a big corporate scale. So as I said this is very personal insight, and yours will likely be different, the key to the financial independence journey is to make tweaks to your current life that make you more content, giver you a clearer vision of the future and the pathway you are on to become financially independent. In doing so, the feeling, you get whilst you are working for someone else should motivate you to find fulfilment in the day to day rather than a daily grind for reaping future rewards.
So for me, that has meant, negotiating a new role with my employer that is centralised at a satellite office that is a 13-minute commute compared to an hour to an hour and a half. This itself has taken me out of what I consider the toxicity of an open plan office to an office where for the majority of my time I can do my work in isolation of interruptions and the shorter commute has improved my headspace, sleep and energy to focus on income-generating ventures outside of work, plus of course the time to produce this podcast on a regular basis. By recognising the opportunity, in effect, this has been a subtle change that has created huge fulfilment not necessarily in my employed role but in my life as I work towards financial independence. I see financial independence in 5 years? time, and without making changes that make me feel more financially independent in my definition right now, I would find it hard to imagine how I could have worked in my old role for another five years simply to achieve FIRE.
So think about your life now, consider our family life, your work life and your personal life, are you getting sufficient fulfilment in each of the three categories right now that means you are truly content or are there adjustments you can make to one category that will have a dramatic positive effect on your life? Given the way society is now structured, quite often people will find it is the work part of this equation that is adversely affecting the family and self parts, and this is why I believe the FI community exists. To be truly financially independent gives us a choice to work on what we want without affecting our family lives or our personal development, in fact, it goes beyond that it gives us the ability to improve the lives of our families and ourselves. The trick I believe we need to learn is how we can achieve small wins along the journey to true financial independence? In the next few episodes, we will look at practical steps we can take along this journey to achieve these small wins. So don?t forget, FI is a journey, not a destination, until next time? happy fiday.