The financial independence campaign, short term wins and the temptation of having money to spend.
I’m wealthier than I’ve ever been before.
By every measure, the financial independence campaign has made me a richer and happier person.
I’ve got more assets than I’ve ever had before
Even with the recent doom and gloom in markets, I’m sat on way more capital than ever. Thanks to paying myself first and putting money into investments, which you can’t just draw down on a whim, I’m pretty flush.
I have fewer stresses than before
Yes, my work is high pressure. That’s law for you.
However, if I was to lose my cool and quit, I could survive probably three years without earning a penny.
I’ve also got an emergency pot for unexpected expenses. Actually, I usually forget I have that. Five years ago, the idea that I’d forget about a few thousand pounds would have been hilarious to me.
I actually have more time than before
Now that I don’t commute, I’ve got actual hobbies. Because I now live more minimally, I can find the money to actually do them.
But… the possibilities!
Every so often I realise where I am and how far I’ve come in just a couple of years.
Which means that every so often Old Me comes to the fore:
“You know, if you wanted a Tesla you could just buy one.”
“We could quit early and just travel now.”
“Investments are cool, but you could wear a nice suit to work. You could be Suit Guy, like an extra in Suits.”
I can see why FIRE isn’t for everyone
The main criticisms against the financial independence campaign are basically variations on these temptations.
Think about it:
“Why invest when you could live in ‘the now’?”
“You can’t take it with you!”
Or, my personal favourite:
“Why would you want to live forever like a pauper?”
I’m not gonna preach
I suppose the classic Blogger-Influencer move would be to tell you that my way is the best. Convince you to religiously subscribe to FIRE and sell your soul to Investing Satan.
To be fair, if he offers you a good deal on it… I digress.
Well, I’m not going to do that. You’re a grown adult, make your own damn decisions.
*But* is it really that hard or are you just lapsing into old ways?
Would you actually be happier if you gave in and went on a spending spree the likes of which the world has never seen?
Maybe.
Probably not though.
I’ve had a couple of minor lapses. You know what? I imagine it’s how a dieter feels after an all-night Haribo gorge. Sure, it’s cool once, but the realisation that my goal is now further away and I don’t have anything to show for my efforts takes the fun away.
Someone told me – might have been another blog – about the hedonic treadmill idea. Basically, we’re junkies on a treadmill chasing the next hit. Or something like that. Probably similar.
Actually, it’s a crap analogy. I reckon “recovering splurge junkie” is better. Maybe “spendaholics anonymous” is what my FI campaign is really about.
Maybe money doesn’t make you happy
Like a cheesy pre-2000s cartoon, money isn’t the thing that makes you happy.
Well, not really. Obviously if you like something it can help you do more of it. Or if you want freedom, you need enough of it. We know, evidentially, that a certain amount of money does in fact make you happier, but there’s a peak. I’ve written about this before, and how intentional spending is more effective for your happiness than splurge spending.
But the point is that happiness has to be based on something else. If it’s based on money, why would you ever try for FIRE – you’d always be trying to earn more, accumulate more. There would never be enough.
Equally, it probably isn’t true that spending money by itself is happiness. Can’t be, otherwise going into further debt to spend more on things you like would at some point pay off. It would remain fun. “Money worries” wouldn’t be so great a stress.
Logically, that means you need to know what might make you happy
You need a Why of FI.
For me and my partner, the Boat Plan is our reason. We like travel and sailing, and the aim of our financial independence campaign is that we have the option to travel and not have to return. It’s an option.
This in turn means two things.
1. Spending on things that we don’t appreciate is counter-intuitive
We would easily spend £1,500 on a sailing course. £2,000 on equipment? Not even a question.
£20,000 on a car that we won’t have or need in a few years? An apartment that smells of rich mahogany? A floor-to-ceiling rack of shoes?
They can do one.
2. Following from point 1: there’s an answer to distractions
Having a destination in mind is an easy answer to some of these potential distractions.
“Why don’t you book a luxury escape”?
Because I’m planning to gain a limitless travel opportunity. Let’s make the most of what’s close or affordable.
“Why not buy a big house? That’s a chunky amount of equity you have saved up!”
Because paying the interest on an oversized mortgage is a handbrake on how quickly I can get there.
“Why don’t we get takeaway tonight?”
Actually, screw it. Sounds great!
I’m only human, a weakness for a cheeky takeaway is one of my vices.
The point: Have a reason why you’re doing this
I don’t think “because I want freedom” is enough of a reason to start your financial independence campaign.
Not exactly.
I think you need to have a vision for what you’re going to do with that freedom. It needs to be specific and measurable enough to know when your campaign can hit its final phases: sustainment and draw down. As a former middle-manager, I can talk for hours about SMART goals… but they have a place, and this might be it.
I’m not alone here. Ramit Sethi, author of a book I haven’t yet read – I can teach you to be rich – gave a talk to Google employees that’s basically on this theme. I’ve embedded a link to it on YouTube below if you’re interested. In it, he talks about the benefits of changing your mindset to problem-solving, rather than stress or mindlessness: “Here’s what I want. What if I did this thing? What would life look like? OK, so how do I get there?”
He’s talking about using money to live a life that you want, as opposed to financial independence, but the idea is transferrable. He also talks about cutting back mercilessly on things you don’t care about, which I wholeheartedly support.
Anyway, that’s my thoughts on this topic. I’ll leave you with the embed to this (lengthy, but good) lecture video. It’s great background watching while doing chores. Feel free to comment below on this article or the lecture, I generally respond to all my comments.
