What would you do TODAY if you didn’t have to go to work? What Big Hairy Audacious Goals (BHAGs) would you make daily progress towards?
I think it’s worth taking 3 or 4 minutes each morning to answer these questions. Heck, it’s FUN to take a few minutes and answer them. Let your daydreams run wild!
Today, I’d go for a long trail run with my dog in the sunshine, then I’d spend the rest of the day playing with my kids. At night I would team up with my wife to cook a great dinner . . . maybe barbecued pork chops and kale, MMMMmmm…
What would you do?
What if this were more than a daydream? What if you could ask yourself this question and then do whatever it is you dreamed up EVERY DAY???
When I first started thinking about changing my life, my goal quickly became Financial Independence (FI)so that I could Retire Early (RE). Put the FI and RE together and you have FIRE!
Let’s dive into these two concepts a little bit to discover what they really mean:
Financial Independence (FI)
First off, what is Financial Independence? According to Wikipedia:
Financial independence is a state in which an individual or household has sufficient wealth to live on without having to depend on income from some form of employment. Financially independent people have assets that generate income (cash flow) that is at least equal to their expenses.
Excerpt from Wikipedia article on Financial Independence
In other words, your money is making you enough money to cover all of your expenses. At this point, work becomes optional. If you choose to keep working it would be because you love your job, not because you have to work to pay the mortgage.
Prior to FI you are like an indentured servant who has no choice but to work. FI is the point where you buy your freedom!
In the book Rich Dad, Poor Dad, Robert Kiyosaki explains this very well with some simple graphics:
Note that the middle class person with the diagram on the left spends their income on liabilities that generate ongoing expenses. They need to keep working to keep paying for their liabilities. The person on the right spent their income on assets that pay them. Once they get enough of these assets they no longer need to work for money since they get their income from assets. The person on the right has reached FI.
So why would someone want to reach FI? For most of us reaching this goal means giving up a lot toys and other things that we think we want. There better be a good reason to give all that stuff up!
The most obvious reason is so that you can . . .
Retire Early (RE)
The first thing to note about retiring early is that it is completely optional. There is no law that says you have to retire when you become financially independent. If you love your job you can keep doing it!
“But if I don’t want to retire, what’s the point of putting in the effort for FI?”
FI might give you the courage to go and ask for that extra vacation time you’ve been wanting. Or maybe you’d like to work remotely from Thailand? Or perhaps you have some great, but controversial, ideas to improve your company that you have been too scared to share with your bosses. What’s the worst that can happen after FI? They say no? You get fired? Oh well, you no longer need the job anyway! The great writer Jim Collins refers to using FI money like this as F-U Money. It gives you the power to say and do what you want.
But enough about NOT retiring early! Many of the FI blogs I read seem to immediately gravitate towards discounting the RE portion of FIRE. There seems to be a general fear among many that without a job you would be bored and unhappy. That is nonsense!
Sitting around watching the news on TV, getting fat, and being bored is not what this is about. I have so much that I want to do, and so much that I want to accomplish in my life, that “bored” is the least of my concerns, and it should be the least of yours too.
Here are a few of the things I would love to do once I take back control of my time:
- I want to have time to be a good dad and play with my kids every day.
- I want to have time to travel with my family for an entire summer.
- I want to have time to exercise for multiple hours every day.
- I want to have time to read as much as I want.
- I want to volunteer some of my time to give back to my community. There are trails to build!
- I want to be able to set BIG goals and have the freedom to commit to the training necessary to reach them.
- I want to climb 5.12.
- I want to run the Western States 100 Mile Race in under 24 hours.
- I want to join a chess league.
- I want to start a company.
- I want to teach my kids to climb, and ski, and mountain bike.
- I want to fix up the yard.
- I want to build a reading nook.
- I want to bike pack across the United States with my family.
This is only a partial list. There are so many amazing things to do in this world that there is no excuse to ever be bored. Even if I hit FI right now, I wouldn’t be able to do everything on my list in my lifetime.
I no longer hate my job. I really have fun going to work. I get to work on projects that I am proud to be a part of. For me the RE portion of this journey is no longer about running from my job. It is about not being chained to my job.
While I currently love my job, there are a lot of other things in my life that I also love. My career takes a disproportionate amount of my time. I want to have the freedom to prioritize for myself what is most important to me, and where I want to spend my time.
I’ll dive into more details about specifically what we are doing to pursue FI in future posts. For now I just wanted to introduce the idea that this IS possible, and hopefully trigger some daydreams about what life-goals you would pursue if you could control ALL of your time.
What about you? What would you do if you no longer HAD to work?