Why I Want To Achieve Financial Independence
Financial independence has been a focus of mine since I joined the workforce back in 2011, and days like today remind me why I want it so much. I dream of the day that I no longer must get up at 6 a.m. to get to work on time. I want to be able to spend as much time as I want, doing what I want. Not having 11+ hours of my day allocated to bringing in income.
The reason I want financial independence so bad is not so I can afford to buy more stuff. It’s simply so I can have freedom of choice. Freedom to choose whether I want to wake up at 6 a.m. to go into work, or the ability to sleep in. I’ve also heard this called “FU money”, which is certainly appropriate for my goals. The ability to walk away from a job (say “FU”) and not worry about putting food on the table.
This is obviously the end goal, and the journey is a long process. A process that will be filled with ups and downs (both financially and emotionally), but it’s important to remember to enjoy the journey along the way and not get completely caught up in reaching the finish line. I don’t want to reach the end and realize I’ve been miserable the whole time thinking that reaching a number in my bank account would bring me happiness.
So how do I plan to achieve financial independence?
- Spend less then I make.
- Invest the money I save from spending less than I make.
- Repeat steps 1 and 2 until I hit the magic number.
The magic number is currently $1.3 million (including house value) with a paid off mortgage. I plan to use the 4% safe withdrawal rate, which will create $40,000 a year in income. This would be enough to call it quits forever and still have some flex room.
The plan is obviously simple and straight forward, but it’s not always easy to stay consistent with. Life gets in the way. Houses get more expensive, kids start popping up… expenses arise. It’s important to keep lifestyle inflation in check. Lifestyle inflation is a term used for the more you make, the more you spend. Spending increases as income increases. And it’s a real problem to keep in check. My total income has tripled in 6 years, and I feel like I’m saving less now than I was then. The money is being spent on blessings, such as my stay-at-home wife and two kids and our mortgage to house everyone, but the inflation is real. That being said, our net worth has also gone from $0 (graduating college in 2011) to over $300,000 now, so progress is definitely being made.
The journey to achieve financial independence is long, but I know we will get there and be very thankful we started. I look forward to sharing all of our successes (and failures) along the way.
Image from: http://www.girlsjustwannahavefunds.com
