What is Financial Independence and why aim for it?
Is Financial Independence for you?
Hello fellow Protagonists,
Let's get back to basics and talk about Financial Independence, what it is and what might interest you in achieving it.
In a nutshell Financial Independence is when we reach a point where our assets and investments create enough income that we no longer have to work to earn our living.
This income could be seen as dividends from shares, rent from properties, or sales from automated systems to name just a few. There are also camps that differ in views on what is better between having multiple streams of income (diversification) or to master one income stream and just stick to that.
This form of income is also referred to as Passive income Where money is generated with as little personal activity as possible once it has been set up. Some assets potentially require more active input than others.
Sit back for a moment and imagine what your life would feel like if you knew that you could do whatever you wanted all day, every day and your lifestyle was taken care of. This can be an interesting question to ask ourselves as many people do not honestly know what they would do if they had complete freedom.
It could be argued that Millennials like myself have shown a particular interest in reaching Financial Independence before the traditional route of retirement. This could be partially due to an ever increasing national retirement age (currently set to reach 67 by 2028 in the UK) and realisation that we may never reach an age where we are free from financial obligations, essentially working until we die or retiring at a point where we no longer function well enough to truly enjoy all it can offer.
An important note at this point is that Financial Independence offers the choice of continuing to work and a complete flexibility into what that work would consist of, if somebody wished to continue working, as there is no need to meet certain thresholds to pay for mortgages and other bills. Continuing to work seems like a fairly common thing for those who do manage to reach Financial Independence early.
What job would you do if money was not a thing? A part of me loves the idea of trying out loads of different jobs to get a wide range of experience, learn more basic skills and meet loads of new people. Either that or spending time visiting places to give talks.
Would you take your love for the outdoors and become a forest ranger or be able to support the old and vulnerable, which is noble work that sadly usually appears to come with a lower pay than a lot of other work.
There are also options created to follow passions more closely, spend more time with those you care about and volunteering our services, all without any concerns from a financial point of view.
Financial Independence also makes the first two words of the F.I.R.E acronym, which fully stands for Financial Independence Retire Early. Maybe you have passed this acronym before but is essentially a movement of people who look to reach Financial Independence at an earlier than traditional manner.
A classic godfather of the movement would be someone like Mr Money Mustache though I get the feeling from his interviews that this title was placed upon him rather than what he initially set out to do. I recently re-watched his 2016 talk at the World Domination Summit and would highly encourage you to take a look.
Achieving Financial Independence kind of reminds me of the Roman rudis, the wooden sword that was given to gladiators who had earned their freedom. These gladiator had the option to now do what they wanted and those who continued to fight in the arena did this out of choice.
I have discussed in previous posts that freedom is a huge value for me, which is why I have naturally gravitated towards an interest in all things Financial Independence and F.I.R.E. There are also some clear links with this and other areas of personal interest such as Minimalism and (dare I say it) spirituality.
Most of what I see around F.I.R.E is based around America and Canada though little sparks are forming here in the UK. If you are reading this from my side of the pond and are involved on a journey to Financial Independence, I would love to hear from you.
GLHF (Good Luck Have Fun)
You can Join The Daily Buff on Facebook and Twitter. Share it if you liked my post and subscribe to keep up to date will all upcoming posts.
Contact me on Thedailybuff@gmail.com
Other posts you might be interested in:
How to refocus when you learn that money is not the answer
Introducing the Mindful £100K series