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The Why Of FI

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.

Why Choose FI ?

What’s wrong with following the traditional path and retiring at 60? Nothing’s wrong with that! In fact, you can still reach FI and continue to work. FI is simply a life of financial independence–a life without debt, monetary concerns, and over consumption.

Everyone has a different reason for wanting to reach FI–maybe you want to spend more time with your family, or you want to pursue a career that you really love, or maybe you just don’t want to spend your entire life working in a field that no longer fascinates you or holds your attention

That’s what I’ll be talking about today–and you can also listen to the episode here.

What life looks like without FI

First things first, let’s look at what a “typical” life is without FI. You’ll probably be able to see pretty quickly why being financially independent is preferable.

According to society, to be “successful” we have to:

…go to a four-year school, maybe go to grad school get a $50,000 a year salary or more…and do whatever it takes to get that salary, [even] if it involves going six figures into student loan debt. And when you get out it’s your responsibility to buy the biggest house you can afford, because you need to support our economy and that is a surrogate marker that we use to identify someone that is considered successful in our culture… -Jonathan & Brad | Ep 38 The Why of FI

Sounds pretty dismal to me. Go into debt so you can afford to get enough credit to go into more debt…that about sums this glittery facade that has co-opted the American Dream.

FI is about defeating that mindset. Sure, you can work your whole life if you want to. But that’s the thing about FI–it’s a choice. If you’re financially independent, you can choose to do anything.

Why of FI

Now we get into the gritty details.

Our whole lives revolve around money. Usually how to make more of it so we feel safer just in case we lose our jobs. It’s exhausting thinking about money and it sucks feeling guilty every time we spend. Imagine a life where we didn’t have to think about money every hour of the day. Well, that’s exactly why many people seek out FI.

And not only is this [FI] about happiness and reclaiming your time, but it’s about freedom, it’s about freedom to have potentially decades back in your lives that otherwise would have been spent at a job that you may or may not like.

So FI is placing a value on your time and prioritizing your purchases and discretionary spending in a way that reflects that. Making time in your life to do what you really love. For those not on the road to FI, most of our free time is spent buying things to make up for a job that we barely tolerate and are only able to use on the few days we have off each year. FI isn’t about running away from what you hate, it’s about “running towards something. It’s being intentional about life not just grazing through it.”

“FI is the obvious choice because you were born to do more than pay bills and die.”

It’s this realization that allows you to take action, to radically transform the life we want to build for our self and our family. Which brings us to the next point.

The How of FI (aka the Pillars of FI)

The Pillars of FI have their own post and episode, but there are a few important points to reiterate.

FI is not about deprivation

Reaching a point in your life where you’re free from money worries sounds like it should involve a lot of deprivation, but it’s all about intentionality. Because we’re conditioned to believe money is the root of all happiness it can be hard to see areas where we can cut back.

For Brad, he and his wife intentionally chose a “dramatically smaller house” than they could have afforded. They also both drive 2003 cars that have well over 100 thousand miles on them and spend just $15 a month on their cell phone bill.

It’s really as simple as that. Having a huge house, a nice car, and unlimited cell phone data is not the recipe for happiness. What does make you happy? One of our favorite books Your Money or your Life describes the fulfillment curve. It illustrates that we need a certain amount of stuff for survival and past that point as we continue on the curve we acquire some basic stuff and it makes us incredibly happy. Our first baseball mitt or doll as a child or your first car or home as an adult were all very exciting to receive. But there is a point of diminishing returns where we hit enough, and past that point we move into clutter. When you don’t want to go into a room because you are overwhelmed by all the stuff you have accumulated it’s probably a good sign that you have passed that point of enough and moved solidly into clutter. We want to extract the maximum amount of happiness/value from every dollar we spend because your money is tied to your life energy. It represents your most precious resource your time

Anyone can reach FI

What if you’re living paycheck to paycheck and all your money is accounted for–can you still reach FI? Of course you can!

Like I said above, FI is all about choices and intentionality. Everyone’s choices are different. Those who started on the journey to FI years ago are going to be in a vastly different place than those just discovered it. As long as you follow the pillars and start taking action–no matter how small, your 10 year future self will thank you. and it’s not the single action you took in a vaccuum, it’s that success brings success. It’s an addictive cascading effect of just getting a little bit better in every aspect of your life.

The Universal Equation of Wealth Creation

There is a simple equation to which we are all subject.

Income-Expenses= The Gap

We need to identify all the levers that we have access to. These levers allow us to grow the gap. Some people have great incomes but lifestyle creep has run rampant. For this individual focusing on the expenses is all they need to change course. Others will need to focus on income. What does it look like to crush the income game through Career Hacking, changing industry, real estate or starting a Side Hustle. I say why limit yourself? ChooseFI is dedicated to uncovering all the different ways that people are winning at this game. This isn’t a dogmatic single path to FI, this is a pick your own adventure, where the journey matters.

What you can do with FI

Have you ever considered the opportunities that open up to you when you reach FI, or even as you approach it?

First, you can become “location independent”–which simply means “you can live somewhere that in the past you were worried wouldn’t allow you to earn a living. Now you now longer “need” the income. This is not to say you can’t or won’t earn income again but your motivation for doing so is radically different. This mindset allows you to travel and pursue your true passion regardless of where you’re living.

And finally, perhaps the most compelling reason you may want to reach FI is simply freedom. Freedom from fear and worry.

You were born to do more than pay bills and die.

Let us know what you think in the comments below. What is your Why of FI? And share this with a friend 

The FIRE is Spreading!

The Why Of FI

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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