For those that wonder if financial independence is really a good goal

The vast majority of people inherently feel that financial independence would be awesome.  And I’d have to agree.  We’ve covered some of the reasons already in Why You Should Pursue Financial Independence.  However, the rub is that it takes a lot of effort, focus, and time to actually achieve.  Since very few people actually become financially independent, it means thatmost people actually don’t want FI enough to do what it takes.  The “sacrifices” required are not worth the assumed rewards.

As with a lot of things in life, it seems that those with a strong emotional drive for FI are the ones that actually do it.  This is usually associated with a clear dream or passion that they would rather pursue.  But this is not always the case.  I thought I would provide a perspective from someone that is passionate about FI but who doesn’t have a specific dream they are passionate about pursuing.  I suspect I’m not the only one that doesn’t have a single passion or purpose that drives them but still finds great appeal in financial independence. And if this post resonates with you, maybe it will help stoke your emotional fire for FIRE.

So if you don’t have a clear vision of what to do with your life, why pursue FI?  This is a common topic online and is a relevant question.  The assumption is that if you don’t have a burning desire to do something different, why bother to make the effort for something as demanding as FI?

In my opinion, it’s worth pursuing FI simply for the personal freedom, which is greatly underappreciated.  The vast majority of people work just for the money, based on the statistics on engagement and job satisfaction.  It also seems to be getting worse, not better.  Money and work are the leading causes of stress in many of our lives and stress is increasingly linked to poor health and unhappiness as we understand it (scientifically and medically) better.

But is there something we could do to improve this?  Online we seem to find the two extremes in terms of job satisfaction.

On one side are those that are living their dream so they are putting in long hours but it never feels like work.  I admit to being a skeptic on this one because putting in excessive hours into anything seems to be an unbalanced way to live, particularly if you have a family or hobbies you enjoy.  On the other hand, there are some people do really, really like their work and kudos to them.  But this still seems to be the exception vs the norm based on the job satisfaction statistics I’ve seen and it’s probably unrealistic to believe the majority of society can find financially rewards jobs that they personally love.

On the other extreme are those that hate their jobs.  You find a disproportionate number of FIRE advocates in this camp, particularly the ones that are driven to figure out ways to live very frugally so they can retire on as small a savings pool as possible. This is not a pleasant situation.  If you find yourself in this camp, you are not alone but it’s worth being introspective about why you hate your job.  Most jobs have good and bad elements and it’s a natural bias to focus on the negative in our thoughts, which is what drives our emotions.  Over time, you can find yourself in a negative spiral, hating your job more and more even though the job itself hasn’t changed.  In fact, it’s quite common to enjoy your job at first and then slowly dislike it more and more.  There are some lessons from happiness research that can help you if you are in this camp. The most important is to focus on the positive aspects and have gratitude for those.  You’ll eventually feel better about your work even if nothing changes. Sounds like BS but feeling gratitude over time really works.  The other thing you can do is actively shape your job to better fit your desires, including setting boundaries on the things you don’t like.  Obviously you don’t have carte blanche to do this but there is more we can all do to consciously shift our jobs than we realize.  Typically the biggest barrier is mental since it’s not comfortable to challenge the status quo in our jobs.

Despite the blogging press these two extremes receive, I don’t believe they are the most common situation (although case #2 far outweighs case #1 unfortunately).  The most common situation is the broad, gray middle where most of live.  We don’t usually use the words purpose, dream, or passion when thinking about our jobs.  But we also don’t hate our jobs. Usually, there are a number of positive elements to our jobs including a nice paycheck, social interaction with intelligent colleagues, personal development and learning, satisfaction from work accomplishments, recognition, etc.  But if it wasn’t for the paycheck, it’s unlikely we’d be spending our lives the way we do when working at our jobs.  So we like a lot about our careers/jobs and also dislike a number of things.  Overall, even though our jobs are okay, it’s still very nice to think about not needing the money and doing something else with our lives, even if it’s not exactly clear what that “something” would be.

So what is wrong with those of us stuck in this gray middle?  In some cases, we are still trying to figure out what we want to do when we grow up (or maybe maybe we just never will)!  That might be a bit true in my case.  But I think the more important aspect is that many of us have diverse interests.  In other words we desire balance.  For me, there are many things to balance to lead a fulfilling life.  A balance between mental and physical challenges.  Between enjoying time at home and adventure outside.  Time alone and time with family.  Relaxing downtime balanced with activities requiring full engagement.  The problem with these elements of balance is that it requires time.  When work takes up more and more of our waking hours in the week, there is simply not enough left over for the other things in life.  Little time for exercise to stay vigorous and healthy, time to enjoy and nuture relationships, time to learn, time to try new things, time  to sleep, time for family, time for hobbies, time to have a pet, etc.  Life becomes severely unbalanced.  In the end, I don’t have any big problem with my job other than it takes too much of my time.  We only live once and there are so many happy ways to spend that time!

There is not one single thing I could be obsessively focused on my whole life and be happy.  Even my favorite, most engaging hobbies would not be fun for long if I dedicated too much of my time only to them.  I like a variety of things (all of which I have mini-obsessions for) and I find I need a balance to be content.  At times in my life when I’ve needed to be extremely one-dimensionally focused, like graduate school and various times in my career, I’ve become very unhappy.  When I’ve been extremely busy but more balanced, like undergrad, and earlier in my career, I was quite happy.  This need for balance and diversity is why I am very skeptical of the “dream job” contingent that advocates for finding a job you love so that you’ll be happy dedicating all your time to it.  I don’t believe that such a job exists or could be created, at least for those of us that have multiple interests (which I suspect is a lot of people since most people are pretty complex once you get to know them well).

It seems to me that an ideal case is a series of mini-jobs that I’m passionate about that all take 2-20 hours per week.  Unfortunately modern society is not structured for this at all.

The world continues to get more specialized and more focused as competition continues to increase.  We are all in school longer getting more focused degrees.  We seem to be working longer hours in more specialized fields.   We are always looking for that edge.  Networking, personal development, productivity hacks, brain boosters, test prep courses, the right internships or publications, and on and on.  People seem to be less happy with all of this and I suspect that the lack of balance and diversity that many of us crave is being squeezed out too much in the never-ending drive for higher productivity.

I find this very sad and I think FI is a great way to address this.  If there really aren’t many lifestyle options involving balance in society, then we need to create our own.  But since there isn’t a good common path to follow, it’s going to take resources to go your own way.  That’s where FI comes in.  FI allows you to make decisions based on things other than money.  One of the most interesting aspects of FI is that many people continue in their same career after FI but take advantage of their financial position to shape their jobs more to their liking.  Often this means they create a healthier and more fulfilling balance in their lives.  This isn’t as visible through blogs because people don’t typically write about this but it’s quite common.  This can include more risk taking, or saying no to certain tasks, or leaving work at the office to focus on family time in the evenings or weekends.  The point is that once you are FI, you have more ability to change your life, including your job, and you may find that you can make your current job much more satisfying.  Once you are FI, you can say no more easily and find a better, less stressful balance between your job and your life outside your job.

Regardless of whether you change careers, live a life of leisure, or stay in the same job after reaching FI, you will be making a choice based on your own freedom to do so.  I think this is a great thing both at an individual level and for society as a whole.

What is the downside?  The risk that you saved too much too early and missed out?  It doesn’t seem like this is a very common regret, especially for those that reach FI still relatively early in life.  So the date indicates this isn’t much of a risk.  Your future self is much more likely to thank you for saving and pursing FI than be mad at you.

What about the societal downside?  If we all bought less stuff and saved more money, there would be less demand for goods and services, leading to fewer jobs.  If a broad part of the workforce refused work really long hours to be “productive”, then standards of living would drop since these are ultimately driven by productivity (assuming a balanced share of increased profits which has not been he case lately).  With too much savings in the world, investment returns would decline.

I’m not overly concerned about this though.  The market will adjust supply and demand as it always does before hitting any extremes.  The net effect is very likely to be positive.  People would be happier and healthier, which would save society a large amount of time and money.  Debt would likely decline.  Human progress (productivity) would still be made, just at a maybe slower pace.  This is not such a bad thing and would give people and industries a bit more time to adjust to structural changes compared to today.

Generally, unless there are some uncounted external costs like environmental degradation, or long-term health consequences, what is good for individuals tends to be good for society.  In the case of FI, these “external” factors are helped, not hurt.  If more people became FI (especially through frugality since it means they won’t spend a lot and drive up prices/inflation for everyone), then there could be some very positive ramifications at an individual, national, and global level.

So I believe everyone can benefit by pursuing financial independence, even if they don’t have a  strong “why”.  The reduction in financial stress and less dependence on money for important life decisions is something that everyone could benefit from.  And it would be good for the world.  Less unnecessary consumption.  Better work/life balance culture in the economy (benefiting the next generation entering the workforce).  Less stress. Healthier, happier people on the planet.  More people free to create and pursue their individual passions and share them with the world.  It’s hard to see a significant downside.

So if we agree that pursuing FI is a good thing even if you don’t have a clear dream to pursue, what is an example path to follow right from the start?

Work and study hard when young.  You’ll have energy and drive and can focus on learning and then working to make money.  Understand the psychology around money, spending and happiness so you quickly learn to not waste the money you are making.  Really learn and understand compound interest from investments.  Keep your expenses low and save a lot.  Focus on spending fun time with friends, dating, and developing as a person.  Be very cautious about the big expenses like vehicles and housing.  If you manage these big ones well, drinks with friends, nice clothes, and meals out will not be major financial worries.

The best hack I can think of in order to painlessly pursue FI is to learn about spending and happiness.  Once you really start to internalize that spending more is not making you happier, it will become easier and easier to save more.  If you add in the typically faster increasing wages early in your career, your % savings rate can really grow quickly, and painlessly.

By the time you’re in your 30’s you will likely be in good shape financially even if you’ve added obligations like children.  If you find your passion in your 30’s or 40’s, you’ll be in a strong position to make whatever changes you want.  Alternatively, if you enjoy your current life, you can continue with it, but without any financial stress.  It’s hard to see why this isn’t a great position to be in compared to the vast majority who find themselves at a mid-life crisis but with seemingly few options because of money.

So even if you don’t have a really strong “why”, it’s still worth it to pursue financial independence.  I guarantee that the future you will be happy you did.

Please add your comments.  Do you have a similar or different view?  Does everyone have a driving passion and I just haven’t found mine yet?  Is it silly to advocate pursuing a big goal like financial independence without a burning emotional desire to fuel such a journey?

 

 

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