Why Being Financially Independent Matters

This post is directed to anyone who still has to ask why someone would want to be financially independent.

First, let’s talk about what being financially independent means. Put simply, it just means not relying on anyone else for money. In the majority of cases, “relying on someone else for money” means a job.

But everyone needs a job. That’s how we get things!

Well, not really. If you talk to the average person about why they want things, it’s because they think having those things will make them happy. But that kind of happiness is inevitably fleeting. Once the novelty of a thing wears off, it’s always time to look to the next thing. This is a huge reason why the smartphone is so successful, for example. And it’s this kind of churn-and-burn that causes someone to accumulate things with diminishing returns on happiness.

It’s also my theory that this explains why older people start to care less and less about things and more and more about experiences. There’s a process you go through once you actually realize you aren’t immortal. It’s hard to put into words, but suffice it to say that it changes you. Part of that is no longer caring about doing what other people think you should do.

And this goes back to the typical American pattern that was the norm for so long: you’re born, you go to school, you get a degree, you stay in a career for 40 years and somewhere between all those things, life happens. What financial independence is about is flipping that idea on its head.

It’s about choices. You can take that same scenario and still work for 40 years, but now let’s change things a bit. Let’s say you work really hard for 10-15 years while living below your means. I’m talking hardcore savings mode — 75% and above. Let’s say that after that, you’ve accumulated enough money to where you no longer have to work but you still choose to. But wait. Now you’ve got time — life’s non-renewable resource — and lots more of it. Also, you remove that stress that chases you your whole career. That fear of being fired or laid off. Now you can work because you want to. Like I said — choice. You can now choose to take a vacation whenever the hell you want. And, depending on how you have things set up, for as long as you want.

But wait, if I do that, I can’t buy all the things I want. How will I keep up with my friends?

Why do you want to keep up with your friends in the first place? Again, if your life is about buying things, you’re doing it wrong. That’s my opinion, of course. In my mind, when I’m on my death bed, I won’t care much about the fact that I was an early adopter. I won’t care about whether I had a better stereo, computer, car or house than my buddies. What I’ll care about is what I did with my life and how much of it I didn’t waste. I imagine that’s how many people will feel at that point, which is why so many are starting to go this way.

So you’re telling me I have to act poor to be happy?

Sort of. Acting poor isn’t the right term for it, it’s more about living below your means and maximizing savings. And it’s not about life losing meaning because you can’t have some shiny new car. It’s about finding happiness in the things you already have. The things you would only stop taking for granted if you lost them. And that includes your relationships, moments with your significant other, friends, your children and just time itself.

I’m not convinced. I still want to live the lifestyle I have now.

If you want to live the lifestyle you have now, you’re going to have to increase your income. It’s a simple formula, really. You either reduce expenses while saving the difference, increase income while saving the difference or both. In my opinion, it’s easier to reduce expenses and focus on spending, but many people have been successful going the other way.

To wrap things up, I’d like to encourage you by saying that if I can do it, you can do it. You just have to take the first step. Start setting savings goals and knocking them out, one way or the other.

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