Financial Independence: A Catalyst for Positive Change
Let’s start with, what does financial independence actually mean?
FI, the acronym that stands for Financial Independence, is defined as:
FI, or Financial Independence, simply means that an individual has enough assets to operate a positive cash flow that at minimum, covers their expenses. This cash flow is generated without the need to work, or at least work by traditional standards. As an example, this income is derived from passive income, or income that is gained through stock dividends. There are several other areas that can lead to a stream of passive income. Ultimately, to attain financial independence, you must be able to cover all living expenses, including any debt, without the need for traditional work.
FIRE, the acronym that stands for Financial Independence Early Retirement (just flip the E and R and it works) is defined as:
FIRE is a movement that operates on the premise of gaining financial independence as early as possible by saving as much of currently earned income as possible. The dollars saved are typically invested into a retirement portfolio. The goal is to reach a point where an individual can achieve retire years before traditional retirement programs typically allow for, with the retirement portfolio being used, in smaller withdrawals, for living expenses.
To be clear, TimetoFI is about my desire to obtain Financial Independence, without the focus on retiring early. It’s also about clearing up a ton of mess that I’ve made of myself up until this point. It’s to encourage others, that in the face of adversity and a seemingly endless uphill challenge, that if a guy like me can get there, then there is no reason they can’t do it as well. My journey, though FI specific, is a worthy one to follow for those desiring FIRE, or really, for anyone wanting to improve themselves in any way, shape or form.
I absolutely cheer on individuals that are driven by the FIRE movement. I certainly support it, and perhaps I’ll be able to take advantage of early retirement if that’s what I ultimately choose to do.
However, for me, I am simply motivated by achieving Financial Independence. I believe that, when I look at the ten to twenty years older me, I’ll still want to work and earn income in some form. Likely, to a post-typical retirement age. The thing that really motivates me is gaining the independence to call the shots, so to speak. Choosing how and where I work or contribute my time sounds fantastic to me.
If you read my story, which keep in mind is simply the first chapter of my journey, you’ll see that I am nowhere near achieving FI. Not close, not a stone’s throw away, not down the block or across the valley…we’re talking FI is on the moon while my feet are planted firmly here on earth. I have a long ways to go.
How Could Achieving FI Change Your Life?
I’ve laid out why FI matters to me and why I am determined to get there.
Now, how about you? Have you considered what living FI could do for your life? Do you see any harm in wanting to attain financial independence? I don’t.
I recommend giving it some thought. Go ahead and picture yourself living a FI life. What do you see? Most likely, we’ll see something different. I’m guessing the common thread is we envision a much less stressful and worry free version of ourselves, that happens to be living life on our terms.
Hopefully you’re road to FI is a bit smoother than mine, but even if it’s not, just know that with strength, perseverance and determination, you will get there!