After reading my Steps to FIRE series, maybe you thought it was too much work, too many steps and too many changes. That it requires too much discipline. Many will say that we need to live in the moment and think about the consequences later.

If you feel the need to make excuses, then perhaps I have overlooked an important aspect of the process in my articles.

Before you make major changes in life, you need to have a reason to do so. Of course, I’m talking about reaching FI and maybe even retire early. But what about it? Why such a goal? Why go so far off the beaten path?

In order to make important changes and take such a path, you have to know what it means exactly for yourself. Once you understand what it would really be like in your life, you’ll be ready to go.

Why Financial Independence

I believe that FI does not necessarily mean the same thing for everyone. So it’s important to establish what it really means to us specifically.

For my part, I am a very passionate person. I’ve always said it: I’m incapable of enjoying something casually. When I like something, I love it. That’s all I can think about. I have an insatiable thirst for more and I learn everything I can about it. On the flip side, I tend to move on once I’ve covered everything. While the interest remains, it’s at a much lower level.

You see the conundrum? I don’t see how I could possibly do something I could be passionate about (and that is profitable enough) for 35 years.

Unfortunately, life typically works that way. You have to decide what you want to do for the rest of your life, at an age where judgment is not your strong suit. And I don’t know about you, but my interests have changed a million times since age 16.

Then you go to school based on that questionable choice. You start working, you climb the ladder, you overspecialize until you find yourself with fewer options than ever. But you have good  employee benefits and seniority, yay!

And that’s without talking about the opportunities that pass us up when we’re stuck in our gilded cage. Not taking a trip because our time off was not approved. Or only travelling for short periods of time because we don’t have more vacation time. Or not going to work elsewhere because the employee benefits are not as good. Damn you, DB pension plan!

Some will argue that self-employed workers have more freedom. They can afford this kind of thing, since they are their own boss. Wrong. Their clients are ultimately the bosses. Even the self-employed are accountable. If on top of that, they live above their means, then they’re equally stuck in the rat race.

When I see my uncle working 70-80 hours/week for his own company, I can see it’s not because it makes him happy. It’s all about paying the bills and affording a short vacation in Cuba once a year.

I’ve always felt like I didn’t fit into the mold.

I like to learn about anything and everything, for my own personal growth, not to get a good grade or to make a 9 to 5 job out of it. Doing the same thing until age 65 has never appealed to me. Switching careers every ten years is also not an option.

I want to be able to travel whenever I want, not when my boss says I can. I want to be able to work on what is important to me, not on what is most profitable. I want to have the time to do what I want to do when I want to do it.

I want to stop feeling guilty when I’m not being productive or feel like I’m running out of time (because a two-day weekend sure flies by). I want to stop wasting my time in meetings that should have been an email.

So for me, FI means having enough investments to pay for my lifestyle without having to be accountable to someone else. It means freedom. It means being able to use my time as I see fit.

Why Early Retirement

Personally, I have no problem with the notion of early retirement. I know that’s not the case for everyone. Many bloggers prefer to dissociate themselves from that notion. Many don’t see themselves stopping work completely. I completely understand. Some still want to have a sense of accomplishment and want to continue to “contribute to society”, so to speak.

Of course, I wouldn’t say that I intend to stop working forever. After all, I am young, smart and resourceful.

However, what 2020 has shown me is that I really enjoy the simple pleasures.

As you can imagine, I enjoy reading (very much), and learning about new things. I like to drink good coffee, cook and eat scrumptious meals, ride a bike, take walks, listen to podcasts and music, watch Netflix (especially Star Trek), knit, travel, lie in the sun, spend time with my family, etc. More recently, I discovered that I really love writing for this blog.

You probably noticed that these are all hobbies that are not very profitable. But it makes me happy! Ultimately, that’s what it’s all about?

Besides, if I feel the desire to “contribute to society” after a few months of indulging in the little things, then why not? The advantage will be that I’ll be able to do what I want, when I want and spend as much time as I desire. My monetary needs will already be taken care of.

Moreover, it’s important to remember that feeling fulfilled does not necessarily imply doing paid work. I could feel fulfilled by doing volunteer work or even simply by writing this blog. There are various ways to contribute to society besides paid work.

Although money is an infinite resource, let’s not forget that time is limited. In retirement, no one will be able to dictate how I get to spend every precious minute of my time.

Delaying Gratification

I understand very well how people advocate living in the moment. We don’t know what the future holds.

I have a friend who watched her brother die of skin cancer when he was only in his thirties. For her, maxing out her RRSPs is out of the question. She says she prefers to travel many times a year and live what her brother was unable to live during his short time on this earth. The rest of the time, her expenses are so high she can’t save for anything besides her next trip.

I get where she’s coming from.

In fact, I could have the very same attitude. My father died at 49 from an aggressive form of gallbladder cancer. He worked all his life and never got to enjoy life in retirement. In his name, I could say I’ll do everything I can to live in the moment, just in case genetics plays a trick on me.

However, the obituary section in the newspaper clearly shows life expectancy is only increasing. Nowadays, you have a better much chance of retiring than dying at 30.

I understand that I’m not immune to bad luck, but I’m an optimist. I prefer to think that I’ll live to be 110 years old and that it will have cost me only six years of intense savings, before enjoying the rest of my life. 🙂

And what if I were to die at 49, like my father? Well, I’ll have had 14 years to enjoy retirement! Much better than my dad! 🙂

The Expensive Instant Gratification

On the other hand, someone who’s lived in the moment and spent every dollar earned (and even more, thanks to credit!), will have a lot of catching up to do. It’s no fun realizing that you don’t have any savings, but you’re still perfectly healthy! Damn, cancer didn’t come looking for me, what do we do now?

Let’s see how much a person has to save to make up for lost time.

Let’s compare my situation to my friend’s, using hypothetical numbers. Just so we’re comparing apples to apples, we’ll take FI and withdrawals and out of the equation.

Let’s say I’ll save $5,000 a year from ages 20 to 35. My friend will do the same thing, but from ages 35 to 50. That’ll be a total of $75,000 saved over 15 years in both cases. Add to that 7% return.

AgeMeFriend
20$5,000$0
21$10,700$0
22$16,799$0
23$23,325$0
24$30,308$0
25$37,779$0
26$45,774$0
27$54,328$0
28$63,481$0
29$73,275$0
30$83,754$0
31$94,967$0
32$106,964$0
33$119,802$0
34$133,538$0
35$142,885$5,000
36$152,887$10,700
37$163,590$16,799
38$175,041$23,325
39$187,294$30,308
40$200,404$37,779
41$214,432$45,774
42$229,443$54,328
43$254,504$63,481
44$262,689$73,275
45$281,077$83,754
46$300,753$94,967
47$321,805$106,964
48$344,332$119,802
49$368,435$133,538
50$394,225$142,885
51$421,821$152,887
52$451,349$163,590
53$482,943$175,041
54$516,749$187,294
55$552,922$200,404
56$591,626214 432 $
57$633,040$229,443
58$677,353$245,504
59$724,767$262,689
60$775,501$281,077
61$829,786$300,753
62$887,871$321,805
63$950,022$344,332
64$1,016,524$368,435
65$1,087,680$394,225

See the magic of compound interest working at warp speed when you start saving early? I’ll have about three times my friend’s savings at age 65, even though we saved the same amount.

If my friend wants to reach the same amount I have, starting 15 years later, she’ll actually have to invest almost $200,000 over 15 years. That’s $125,000 more than I had to save.

Long story short, it’s really expensive to put off saving for later. It means more money, but also more time.

Enjoying the Journey

I would like to emphasize that it’s not necessary to reach FI to start reaping the benefits.

On the path to FI, we lower expenses, increase income, save and invest considerable amounts of money. Which means?

Financial security.

Personally, I’m about a third of the way to my FI number right now. What does that mean? I have accumulated about 8 times my annual expenses. It may not be enough to quit forever, but it gives me choices.

  • The choice not to put up with a crappy boss;
  • The choice to travel more often or for longer periods of time;
  • The choice to work fewer hours;
  • The choice to seize opportunities;
  • The choice to not care.

And the list goes on.

Disaster happens? No problem, I have enough to get through the storm. Social programs notwithstanding, I have accumulated 8 years of freedom.

Can the average Canadian say the same? I don’t think so.

Yes, sometimes the journey can seem difficult and mostly long. However, we must stop for a moment and be grateful for the progress and the benefits.

Dangle the Carrot

Ultimately, it’s all about finding your why and really want to work for it. Make it your carrot at the end of the stick and run for it. Having a clear goal in mind makes it easier to make the effort.

Remember, it’s not about money. Money is only the tool to reach your goal. I’m not here to teach you about saving money to become rich. Rather, I want you to become as free as possible.

Personally, once I understood that it was mathematically possible to become free in six years, I couldn’t go back. Six years of effort in order to be free until I’m 110 (minimum) is a good deal to me. Really, it makes perfect sense. In fact, I don’t see how I could want to do otherwise, now that I know it’s within my reach.

So what motivates you to pursue financial independence? Do you feel stuck in your 9 to 5? Are you tired of being accountable to a boss? Are you tired of those damn meetings that should have been an email? Do you want to pursue projects that aren’t necessarily profitable, but that sparks joy? Would you like to spend more time with your children? Would you like to spend more time with your parents? Do you want to do volunteer work? Would you like to travel around the world? Don’t hesitate to let me know! 🙂

Whatever your motivation is, the important thing is to have one. Find your why. Then the rest will fall into places naturally.

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