How the Journey to Early Financial Independence is Making My Life Better Today

jahndf

There’s a common misconception out there that a person saving a ton of money (think 50% to 80% of net income each month) has to be living a very meager life. That is, unless a person joins in with the masses and also becomes a present-day hedonist, they will merely be surviving, but not truly living.

Give and Take

I would argue otherwise. Yes, it is true that a person who is striving to achieve early financial independence must save a lot more of their income than their peers. So, they will undoubtedly have less free cash to purchase material things. On the other hand, this same person also won’t have to deal with the following stresses that are known to be silent killers:

Job Security

Let’s face it, a person who aims to retire at the more traditional age of 65 will have to depend on their employer for a much longer period of time than someone who plans to retire early. As a consequence, the traditional worker will likely encounter many periods of uncertainty in the workplace. They will most likely have to deal with the following scenarios at some point, or another: new (bad) bosses, company acquisitions/restructuring, relocation, reassignment, paycuts, and of course, the dreaded layoffs.

The above situations can create a lot of day-to-day stress for a person. This stress is compounded even further if a person also has to think about: supporting a family, paying a mortgage, repaying debt, etc. One might argue that the day-to-day stress is actually very minimal, and overall, tolerable. This might apply to a healthy, younger person, but the going only gets tougher as a person gets older. Over time, energy wanes, motivation dips, and the competition only gets more fierce.

It’s hard to feel completely secure in a job you know you probably aren’t qualified for anymore. Having to face this likely scenario in the later years can’t help but add more stress. This might sound cruel, but there’s a reason why companies like to focus their layoffs on their more senior employees. Usually lack of energy, focus, and dedication are the prime reasons why older workers are let go. It’s perfectly understandable, though, since these employees only become this way because they are burned out from doing the same thing year in, and year out. And yes, the salary gap between a senior employee and a fresh graduate is another good reason why companies elect to cut the cord.

In contrast, a person aiming to reach early FI doesn’t really need to concern themselves with worry about job security. To reach early FI requires a very little number of working years! Why should a person stress out so much over job security if they know they aren’t even going to be around for much longer?

Corporate Politics

Corporate politics can make life miserable for just about everyone. For those who are in it for the long haul, well, you better start getting used to it real quick, because it won’t be going away anytime soon!

If you are trying to reach early FI, well, luckily you won’t have to put up with any of this nonsense. For instance, I refuse to partake in the game of corporate politics. To me, it’s a complete waste of time, so I do the following instead:

-Disregard useless e-mails.
-Only respond to e-mails I deem are worthy of a response.
-Don’t CC everyone just so I can “make my voice heard”, or attempt to get noticed by the big shots.
-Enter and leave meetings ASAP.
-Ask the minimum number of questions needed to get my job done.
-Don’t partake is useless water cooler chatter.
-Come to work early and leave early (I’m not going to be the last one to leave. I won’t kill myself just to get a promotion).
-Won’t expend precious energy trying to climb a stupid ladder. The game is rigged anyway. I’m fine staying on the same rung from start to finish.

By doing the above, I am unburdening myself from a lot of wasted time.

Mental Stress

Work is stressful. There are always a ton of things that need to get done, and never enough time! Worse, outside of maybe two or three weeks in a year, and a few select choice holidays, most people are expected to work year-round-the-clock. Thanks to technology, most everyone has a smartphone now, which means that the corporate e-mail account is always within arm’s reach. Since most corporations are also now global, this means that the work has infiltrated all time-zones, so e-mails are now sent non-stop throughout the day.

When I first started working, I was like a lot of other young professionals, very much into the whole nose-to-the-grindstone ordeal. Days flew by because I worked so many hours. After a few months, the days and weeks just started blurring together. I couldn’t even differentiate anymore, because everyday felt the same!

The problem, I soon learned, was that the working game isn’t a very short one. No, this game that we play goes on for a long, long time. 40+ years is typical, which is enough time to consume most of your life. Over time, this type of pace is just not sustainable. The stress will continue eating away at you, and sadly, it often time inflicts damage that is irreparable.

Work makes people sick. It even kills, in the extreme cases. I’ve witnessed a co-worker fainting, as he was overcome with fear and anxiety, which was purely induced by work. But sadly, most people will be willing to tolerate the workplace stress because they are too afraid of saying “NO” to the system. The more dependent you are on the paycheck, the harder it is to object.

My time horizon is short. I’m not a slave to the machine, since I don’t need much in return from it. Since I’m no longer focused on scaling the corporate pyramid, I know I don’t need to subject myself to any of the above abuse. What’s the point? I’m not trying to get promoted. I don’t want to be noticed. I can live with mediocre yearly reviews. In fact, all I really want is to be able to maintain the same job, at the same pay, doing the same work for just a few more years. Once the passive income stream is in place, I’ll be on the first flight out of this God-forsaken place.

Once I committed to early FI, I noticed that my mental outlook on life was changing. I’m more positive and upbeat. I have more energy and am just a happier person now. And for good reason! I can finally see the light at the end of the tunnel. Every workday serves a greater purpose, since I now know that it’s just a means to an end. A short end, at that. Thank goodness!

Emergency Fund

Life isn’t predicable, and a lot of things can pop up unexpectedly. Since most Americans have no savings (and a lot debt), this can be especially nerve-racking when an emergency event comes up.

However, this fear probably isn’t something that is shared by those seeking early FI. Those of us who save 50% to 80%+ of our net income each month have already taken care of the emergency fund situation. In fact, that’s probably the first thing we accomplished as we started our journey to early retirement.

Yes, it’s true that it takes a lot of time to build up a passive income stream. It’s also true that the individual battles won (monthly contributions to savings) also help to establish a strong financial foundation. Having a strong cash buffer is probably one of the best byproducts of creating a passive income stream. This will do wonders for your confidence! Nothing beats the feeling of financial security. It really does lift the weight of the world off of your shoulders.

For myself, even if an emergency situation does arise, and it depletes my entire emergency fund, well, I’ll still feel very much reassured, knowing that I’ll still be able to handle the situation. The dividend portfolio is supposed to always keep growing, but should that major need arise when I need to remove funds from it, it’s comforting to know that I do have that luxury.

I’m sure the average American would love to have an emergency fund, let alone a backup emergency fund. However, most aren’t willing put in the required effort needed to establish this.

Summary

The journey to early financial independence is making my life better. In all phases. Although I have to stash away a large portion of my income (50% to 80%), by no means am I just scraping by and just “barely living”. On the surface, I’m clearly living well below my means and look like a total tightwad. My peers see this and think that I’m making huge sacrifices in my quality of life. But, hey, I’d rather be “sacrificing” than suffering like the rest of these fools. 😉

By being so frugal, I actually feel more alive than ever before! It feels good to see the passive income stream snowballing and growing on a monthly basis. The progress makes me even more determined to improve and do better. Also, having an emergency fund, and backup emergency fund (dividend portfolio) does wonders for your peace of mind. And you can’t put a pricetag on that!

Further, I’m much more loose at work now. I don’t let the work stress bother me, like before, since I now know that my life and job can be decoupled. I will not let my job define my life. My job is not who I am! Now that I know all of this, I refuse to work long hours, I don’t partake in corporate politics, and I most definitely do not care about climbing up the corporate ladder.

Since I don’t over-commit myself to work, I get to keep my soul. 😉 Even my blood pressure is down, as my overall health is better than it has been in years. The journey to early FI is going great. It’s already paying dividends, and in more ways than I could have imagined!

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Into IndependenceWeekend Wealth (Dec 29 – 30) | Brick By Brick InvestingDecember Links: Looking Towards a New Year | Dividend Growth Stock InvestingThe First Million is the HardestFI Fighter Recent comment authors
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Highyieldsoldier
Guest

All good points. Im not working for early FI, too old lol, but there is a certain sense of independence knowing my financial well being doesnt depend on a particular job. I was asked by a manager the other day what my plan would be if I failed a certain test or task that was integral to keeping my job—I have alot of qualifications to keep up every year–and I told him I always plan as if I was about to be fired. He looked suprised, but whatever. I can pay all my bills working a job that pays much less, or I can quit that job and go back to driving trucks and make even more. Many of my friends are totally dependent on keeping that job, and as such, it leads to a lot of stress for them when it comes time for their annual physicals and written exams.

Brick By Brick Investing | Marvin
Guest

Agree with EVERY LAST BIT OF THIS! I can honestly say this is everything I would have said but you articulated it much better than I could. I rarely get into office politics even though I have been approached multiple times to “take sides.” Fact is, I come in do my work and go home. Don’t get me wrong some of the people I work with are great people but unless they are adding value to my life or my financial independence I don’t give them anymore time that is necessary. Good for you FI, keep up the good work!

JC @ PassiveIncomePursuit
Guest

I’ve noticed my stress level go down as well, and it continues to go lower every month knowing that I’m getting that much closer to reaching early FI. The stress level has gone down so much because I have a much better grip on my finances. Knowing that I can get by on less than $18k is great it makes it that much better knowing that if something happened and I lost my job I could go work at MCD or WMT and be able to live comfortably without any real change in my life.

I want to push my emergency fund up to a full year’s worth of expenses and before I do call it quits I’ll have at least 1 and possibly 2 full years worth of expenses saved up to help provide a margin of safety.

Progress Trap
Guest

Your comment about MCD and WMT is great. It would certainly not be great to work at MCD or WMT, but you could pay the bills.

Progress Trap
Guest

I agree. There are definitely diminishing returns after you’ve become an engineer with 4+ years of experience. 50% more effort doesn’t yield 50% more returns in your pay check. In fact, If you “down shift” to 80% of your capacity, it’s unlikely you’ll get fired or even get a pay cut. You’re more than likely to keep coasting and getting those marginal pay bumps each year. At that point it makes sense to start optimizing for happiness, health and FI rather than climbing the corporate ladder. It’s sometimes frustrating that the world works this way, but once you notice and take advantage of the discrepancy between effort and reward, it leads the sense of calm that you mentioned. Add to that sense of calm the security of having a large nest egg that generates income and you have the ingredients for a great life. The funny part is, the less stressed you are, the better you’ll probably perform at work (even if you’re not functioning at 100%) and you’ll most likely continue to excel. I wish someone had taught me this earlier, but I honestly think everyone has to go through it themselves – bust their ass the first few years on the job -> get a bit burned out -> realize there’s a better way.

Financial Samurai
Guest

Good attitude mate!

I committed a TREMENDOUS amount of time my first 5 years out of college to make sure I had as strong a base as possible while saving 50%+ of my after tax income. I was willing to play the game of corporate politics, get in first, leave late b/c I had the energy.

Now that I’m older, have more money, and value time more, it’s all about doing something else now, and I love it.

To stop caring about money, you’ve first got to care a great deal!

Dividend Mantra
Guest

Great stuff!

I agree 100%.

I have found that I actually enjoy work more now that I’m trying to achieve financial independence. Before, I was constantly worried about my performance and what customers might say about me. Now, I don’t really care that much because of the large cash buffer I have (enough to live on for about a decade). So, I’m much looser at work and I find that it’s actually more tolerable. An interesting side effect, indeed!

Best wishes!

The First Million is the Hardest
Guest

Playing the corporate politics even a little bit can help on your path to FI, can it not? Climbing the ladder produces more income, which would only accelerate you in reaching FI as you’re saving such a large part of that income.

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[…] How the Journey to Early Financial Indepence is Making My Life Better Today – FI Fighter writes about ways his goal of early financial independence is making his life better.  To outsiders it may seem like he is sacrificing a lot by saving such a high percentage of his income and living more frugal but in reality it is setting him more free from the pressures of career stress.  He won’t be as worried as his coworkers when times get rough and layoffs happen. […]

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[…] How The Journey To Financial Independence Is Making My Life Better Today by FI Fighter […]

Into Independence
Guest

A focus on financial independence provides a road map for the future. There are so many people who are only concerned about the next house, car or latest iPad. As a person becomes closer to FI, it provides more options. You can make a career change to a position that is more enjoyable or in line with passions. It gives you more confidence to make a change if you wake up and and find yourself working for a terrible boss. There are so many people in Corporate America who feel trapped with the golden handcuffs. Life is short and the journey towards FI provides choices. The ultimate day is when you reach full FI and work becomes optional.

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