I met with two different new clients this past month who both said almost the same exact thing to me. “I’d like to have the option to retire by 55 just in case I don’t like my job anymore, but I don’t think that is even possible.” For both of them, I made the following three points:
They assumed it wasn’t possible because it seemed unusual or abnormal to want an exit option at 55. What other people believe to be normal should not matter in your financial decision making progress.
If they put a good strategy in place and stick to it, it is absolutely possible. Yes, they were both in their mid thirties and just starting their post-training jobs, so they felt behind, but it was still a reasonable desire to reach financial independence before age 55.
It is crucial to have a “why” to provide motivation along the way. You don’t have to love every step of the process to financial independence, although I do think it can be a lot more fun and empowering than people often believe, but you do need to stay motivated about the end result. The target you are shooting for will keep you moving forward during the more challenging times of the journey. Sometimes the challenges are large such as an abrupt job change, an unfavorable economic environment, or a health scare. Sometimes the challenge is presented in small questions from friends, family members, colleagues, etc.
Family member: “Why haven’t you upgraded houses?” or “You have a good job, why are you driving an eight year old car?” or “Why are you putting so much money into your retirement accounts each month, you need to live a little.”
Client: “So I can be financially independent by 55 and do whatever I am passionate about without needing a paycheck.”
That’s a great “why.” It doesn’t mean it should be your “why” or anyone else’s “why” though. You may want to work until you are 75 and that’s perfectly alright! Maybe your “why” is becoming debt free as fast as possible. Maybe it’s providing the best education possible for your children. Maybe it’s being able to make substantial donations to causes you support. It doesn’t matter so much what your “why” is as long as it continues to motivate you to make good decisions.
The motivation is especially important early on in the journey when there will be moments of self-doubt. The most common instance of self-doubt for people trying to stay on the path to financial freedom is after someone makes a critical comment about them needing to enjoy the present and live a little.
I want to be crystal clear about this.
I am not advocating for you to save all of your income and never have any fun now, just so you can hopefully have fun in your later years. However, I despise the inferred notion that just because a person is focused on paying off debt aggressively or saving money rapidly that they must be miserable and feel deprived. Financial freedom is incredibly liberating. It doesn’t fix every problem and it can’t promise happiness, but financial freedom provides you with a ridiculous amount of options and the flexibility to spend your time however you want. The happiest people I know don’t concern themselves with how their friends and family spend money. Find your “why” and put a strategy in place to support it. Then just ignore the comments from others and enjoy your life.
2065863 / DOFU 03-2018