Achieving financial independence

[jpc]

http://www.reddit.com/r/personalfinance/comments/18bkmp/is_it_all_worth_it/

Q:

I‘m 25 years old and I look at my friend’s profiles on Facebook and all I see is new cars, big screen TVs, and exotic vacations. Many of these people have lower income than I do, so I know they can’t be saving too much money. Meanwhile, I save a significant portion of my income for retirement. I have plans for what I’d like to do when I retire, and as a result I don’t indulge in too many excesses right now. Understand, I don’t hate my life and I do spend money on things that I enjoy, but savings always come first.

99% of me says, ‘Be responsible’ , your sacrifice now will pay off many times over in the future. However the 1% wonders if it is all worth it, am I living my life wrong? What if I’m saving all my money for a time that never comes? What if I die early or am otherwise disabled before then? Why don’t I have my fun now, while I’m young and able?

How do you justify known current sacrifices for uncertain future gains?

Edit: To clarify: I don't really feel the need to buy new cars, big screen TVs, and exotic vacations at this point in my life. Instead saving money and financial security makes me happy. I just feel at odds with the world sometimes who prioritize spending over saving.

I am an early retiree. I have been living that life for some time. Many years ago (before it became popular) my wife and I chose to live significantly below our means so we could achieved financial independence. I am now living what you are planning, so I think I can provide more of a sense of the big picture.

Here's the piece you (and a few others in this thread) seem to be missing... Living below your means isn't about postponing gratification. In other words, it's not about giving up products and experiences when you're young so you can have them when you're old. That's not it at all.

What it's really about is freedom. Most people are, in many ways, slaves. I was a slave. Beginning at age five I was forced to get up in the morning and go somewhere I didn't really want to go, and do things I didn't really want to do. Elementary school. Then high school. Then college. Then work. And throughout all those years there was an undertone of fear. Fear that you'll get in trouble with Mom and Dad if your grades suck. Fear that your performance in college won't result in a decent job. Fear that you'll lose your job, and that your family will suffer, if you don't kiss up to the right people, or meet your quotas, or because some asshole above you decides to eliminate your job... always that nagging worry and fear in the background.

When it comes right down to it, usually you really don't want to be there. And many of us really don't want to be doing whatever they make us do. Maybe you're even forced to do shit you don't feel right about, just to survive (cutting corners, speed over quality, turning a blind eye, not being totally honest...). Dealing with assholes. Dealing with office politics. Dragging your ass out of bed at 6 AM. Forcing yourself to go to bed at 10 PM so you don't feel like shit at 6 AM. Driving through horrendous traffic. Other people having the power to wreak economic harm on you, and your wife, and your kids (which is a very bad way to be harmed because it involves having decent food, safe shelter, safe transportation, etc.). Many people live just a few weeks, or months, away from financial ruin or homelessness. Always on the edge. Always needing to rely on others for access to a job, or for a loan, or so you can meet your job expectations, or ____ . This isn't living a life that is free. Not really. It's living a life in economic bondage. It can be a rather benign type of bondage, but it sure as hell isn't freedom because your choices are limited, your time belongs to someone else, and there's always that undertone of worry and fear. "What if?...". "How long can we survive?...". "Will I meet my quotas?....".

So this isn't about postponing cool shit from youth to old age. Not at all. It's about escaping from the economic bondage of a wage slave. It's about freedom. It's about removing all that fear and worry from your life. It's about removing all the bullshit from your life. It's about getting out from under those above you who have the power to harm you and your family by eliminating your job, or by tossing you to the curb because maybe they don't like your attitude. It's about realizing that nobody should have the power to harm you like that. It's about wanting to get out from under somebody else's thumb. You're legally free to walk away from your job tomorrow, but if you don't have the economic freedom to do that, you're not free at all. It's about being free to sleep as late as you want, stay up as late as you want, and spend your time doing whatever you want. It's about realizing that there is no security unless you make it.

So it's all about freedom - not "stuff". The sooner you start working toward untying those bonds, the sooner you will be free. The more you deny yourself now, the sooner you will be free. And you really need to do it when you have the opportunity, because there's no guarantee that you will even have a job five years from now. And after you have attained your freedom, there's nothing that will stop you from continuing to work if you're lucky enough to have a job you look forward to going to (or have a job at all). But it will be YOUR choice.

So that's what it's really about, or at least that's what it was about for me. And I've got to tell you, achieving financial freedom was the best decision we ever made. I thank my lucky stars every day that we decided to go that route. Most of my peers will die at their desks without ever having experienced what it's like to truly be free. Yet I live every day exactly as I choose, and with no economic worries, no stress, and no fear. We become so conditioned to the worries and fear that we think we are free when we're really not. It isn't until you truly experience this freedom that you realize what you have been missing. The relief and overall sense of peace and happiness is astounding. Don't let anyone tell you it isn't worth it.

I hope this helps.

 

[Adrift]

This is a definite goal of mine. I must finish school in order for me to achieve it, though. So, a slave I will be until I can buy my freedom.

 

[Double_V]

Interesting thread. In some ways I was thinking about this today. As in the more you have the more you are slave to it's cost, care, maintenance. I was thinking it's about time to lighten up myself.

I also read an article recently about people who tend to have more money according to statistics are people who've chosen to drive their cars for longer periods (10 -25 years).

 

[walfin]

Many people achieve little or no financial independence no matter how much they save.

But still, need less, want less, slave to less.

 

[Affinity]

I'm trying to save more for this exact reason, true freedom. But fuck is it hard.

 

[Publius]

I moved away from home when I was 21 and manage pretty well. The trick is to be vigilant. Check your bank balance a lot. Make it an obsession! I don't earn much. 60% of my income goes on rent. 20% goes into savings. The rest is disposable. To supplement this, I buy junk in charity shops and sell it on ebay, and make an extra 10% or so with which to buy lovely things. Think of a Paypal account as coupons!

 

[ProxyAmenRa]

I have nice shit and I save half of my income. ^_^

 

[snafupants]

The trick, for me, has always been keeping expenses low and living in an affordable area.

 

[ProxyAmenRa]

The trick, for me, has always been keeping expenses low and living in an affordable area.

I hope you don't have to mingle with the great unwashed rabble.

 

[Architect]

I achieved financial independence, so guess what I did? Tailored my work more to my predilections. Amazing what you can do if you're not fearful of losing your job.

The future is going to be an exciting place, I don't know why some people want to get there by drinking a mai tai while sitting on the beach.

 

[snafupants]

I hope you don't have to mingle with the great unwashed rabble.

What exactly does that mean? @ProxyAmenRa

 

[Duxwing]

I achieved financial independence, so guess what I did? Tailored my work more to my predilections. Amazing what you can do if you're not fearful of losing your job.

The future is going to be an exciting place, I don't know why some people want to get there by drinking a mai tai while sitting on the beach.

How did you do that, precisely? What givens are required to construct such a logical model?

-Duxwing

 

[Architect]

How did you do that, precisely? What givens are required to construct such a logical model?

-Duxwing

Sorry, what logical model? It's a good question for the Ask Architect thread as there isn't a lot (or any?) finance questions.

At any rate I sold my house at the local peak of the market (actually 4 months after it but nobody else knew yet), invested in long term Treasury Strips expecting a global financial crash, then did that again a few times. Interest rates plummet in a financial crisis and I figured the Fed would start a QE program at some point or another.

 

[Duxwing]

Sorry, what logical model? It's a good question for the Ask Architect thread as there isn't a lot (or any?) finance questions.

At any rate I sold my house at the local peak of the market (actually 4 months after it but nobody else knew yet), invested in long term Treasury Strips expecting a global financial crash, then did that again a few times. Interest rates plummet in a financial crisis and I figured the Fed would start a QE program at some point or another.

By "logical model" I meant: A plan that rests on certain assumptions. Also, I'll ask the question at your "Ask" thread.

-Duxwing

 

[ProxyAmenRa]

What exactly does that mean?

Poor stupid people, silly!

---

A woman asked me back to her place for lunch yesterday. She lived at the uni's student accommodation. The whole facility was disgusting. Mold growing on walls, etc.. The facility was also filled with stupid people ie. "business" students. Inside her dorm was equally unappealing. She got me to eat soup that had be left out over night. I did not find out until afterwards...

/rage quit/

 

[snafupants]

Poor stupid people, silly!

I'm not saying or insinuating such though.

 

[ProxyAmenRa]

I'm not saying or insinuating such though.

That's great. I am happy for you.

 

[snafupants]

That's great. I am happy for you.

Sure but I'm still not seeing how post nine follows from post eight.

The trick, for me, has always been keeping expenses low and living in an affordable area.

I hope you don't have to mingle with the great unwashed rabble.

 

[Duxwing]

Poor stupid people, silly!

---

A woman asked me back to her place for lunch yesterday. She lived at the uni's student accommodation. The whole facility was disgusting. Mold growing on walls, etc.. The facility was also filled with stupid people ie. "business" students. Inside her dorm was equally unappealing. She got me to eat soup that had be left out over night. I did not find out until afterwards...

/rage quit/

Perhaps the soup was a pretext for having you alone at her place in order to engage in coitus. If so, then you may have missed out.

-Duxwing

 

[ProxyAmenRa]

Perhaps the soup was a pretext for having you alone at her place in order to engage in coitus. If so, then you may have missed out.

-Duxwing

If so, I would prefer coitus at my place because it is clean.

 

[Duxwing]

If so, I would prefer coitus at my place because it is clean.

Then invite her over-- time is of the essence!

-Duxwing

 

[Montresor]

I'm a total slack jawed slob with my money in one hand out the other. Got some? Spend some!

 

[ProxyAmenRa]

I'm a total slack jawed slob with my money in one hand out the other. Got some? Spend some!

Just make a budget and set up separate bank accounts. Each week I get paid half of the income is deposited into a savings account and the half into a spending account. I pay my rent and bills out of the spending account.

 

[redbaron]

I'm financially independent. I quite like the freedom.

 

[Tony3d]

I like to keep expenses low, but I also have no intention of saving for my retirement, because I will probably be dead long before I ever reach that.