Financial independence is about more than retiring early from a job you don’t like. Maybe you do enjoy your job, so why would you want to quit? What could be the reason to pursue financial independence? I think the reason should be to gain more options in your life.
FI instead of FIRE
It’s a shame that I’m drawing this conclusion right here, because my blog name is partly about playing with the acronym FIRE (and partly about me actually looking to fire my boss eventually).
However, I think financial independence is much more than FIRE – an acronym that stands for Financial Independence Retire Early. People like me, who pursue FIRE, are looking to have so much invested that their free cashflow or passive income allows them to not have a job.
Getting onboard the FIRE train is arguably the best thing I’ve ever done in my life. However, lately I have been thinking about whether I actually need to become FIRE, or that “just” being financially independent is good enough.
Financial Independence Gives You Choices
The reason is that being financially independent, or even just on your way there, gives you a lot of choices in your life.
Choose to Work or Not
The most obvious choice is whether you work or not. If you have a lot of money in your investments, you could decide to stop working at all. Or maybe you don’t have enough to stop working completely, but you just want to keep doing what you’re doing because you’re making other people happy or adding value to society.
Take a Sabbatical
After years of hard work you might be longing for a break. And no, I don’t mean a two week vacation to the beach only to return to an over-full inbox. I mean a serious break, a sabbatical.
Taking a sabbatical can be expensive. Even if you decide to not make a world trip (as lots of people seem to do these days…) taking 6-12 months off work is expensive, because you don’t have an income.
But, with a few years of cash in the bank (or investments) it’s very much possible to take a long break from work. Maybe you want to start a new job in a few months from now, or just take 12 months off from your current job. With great money comes great possibilities.
Tell Your Boss to F* Off
Ah, the nice fuck you money. This is what I’m working towards as we speak. I define FU-money as having three years worth of expenses in my investment accounts.
Fuck you money lets you literally walk up to your employer or client and tell them to fuck off. It doesn’t sound nice, and it isn’t, but you have this possibility.
Your employer wants you to move to the other side of the country? Tell them no. You have enough money to sit it out for a while before you have a new job.
Honestly, this stage of FI, the FU stage, is where you get the most benefits. After this, it’s a long ride to full financial independence. That long ride can be boring, so enjoy the FU-money while you have it.
Buy a Porsche (This is the Coolest Choice)
If all of your plans fail, and you didn’t manage to save enough money for early retirement, you can always buy a Porsche!
All your friends call you crazy when you tell them you’re going to save 40% of your net income this year. All of them. Then you tell them you do this to become financially independent, and they’ll start laughing.
Now imagine you failing, and imagine how much they’ll laugh at you. Unless they see you driving that sweet Porsche. I mean, even if you fail your goal of complete financial independence, you get to decide to spend your nest egg on something cool. People who don’t do this simply can’t. That’s having choices.
What are your choices like, because you’re chasing financial independence? Let me know!