Financial Independence is only the beginning

By Slow Dad - March 12, 2017

Financial Independence is a hard won safety net. Earnings beyond it buy adventures and the luxury of choice. Maintain a buffer to find your happy.
I recently read an interesting post by Matt over at TheResumeGap where he discussed the likelihood that somebody driven enough to achieve Financial Independence at a relatively early age would be unlikely to be fulfilled by unlimited umbrella drinks on a beach someplace, or endless unemployment television.

This struck me as being an astute observation, and one that rang very true.

More to life than umbrella drinks

A quick bit of research revealed the likes of Mr 1500 and TheEscapeArtist (to name just a couple) had reached similar conclusions and discussed them in various forms.

Sustaining Financial Independence or Living Your Life

Matt was puzzling over how much (if any) of his hard won Financial Independence capital could he reasonably put at risk to pursue a new business venture.

I thought this was a great question, as it really highlights how achieving Financial Independence is really just the beginning of the journey, rather than the finishing line that so many aspiring FIRE folk mistakenly believe it to be!

Imagine you declare FI by the age of 28 like Matt did.

Or 31 like Kristy from Millennial Revolution.

Or 35 like Steve from ThinkSaveRetire.

Maybe you took things at a more leisurely pace like myself or RetirementInvestingToday’s “Robert” did.

That potentially leaves 50 to 70+ years of living in front of you.

Think about that for a second. That is a hell of a long time to spend bumming around doing nothing!

Financially Independent... now what?

Some people aspire to endlessly travel the world, in the style of Winnie from Go Curry Cracker. Others buy themselves an RV to join the migratory patterns of the grey nomads like J.D. Roth once undertook.

Others trade their previous work orientated location for somewhere more in keeping with their lifestyle preferences. Nords of the MilitaryGuide fame chose surfing in Hawaii, while Mrs Our Next Life opted for a life of skiing in the mountains.

Geographic arbitrage provides a fantastic opportunity to bring forward early retirement, shifting to a lower cost locale can stretch your money a whole lot further. Mr Money Moustache did this, as did the Frugalwoods.

No matter which approach the newly Financially Independent person adopts, one of the few constants in life is change. It is human nature to seek out the new and exciting.

Something different.

Something more.

Something better.

Constant in life is change

All change please

Regardless of how much fun backpacking or skiing or being a stay at home parent may be, eventually there will likely come a time where it is no longer enough.

Despite our best planned intentions, life has a way of just kind of happening.

It could be that you meet a special someone who you want to spend a bunch of time with, but who doesn’t share your lust for a globe trotting nomadic lifestyle.

Maybe kids arrive on the scene (expected or otherwise). Very quickly the prospect of endless travel loses some of its appeal. Lugging around nappies and pushchairs, worrying about nap times and the availability of bottle warming microwaves. Travelling with small children is hard work!

A lurking coral reef, a malicious tree, an inattentive minicab driver... chance may one day painfully leap out in front of you, ending to a life of leisure spent pursuing surfing or skiing or biking glory. Fortunately it doesn't also end you, but accidents do happen.

Perhaps a loved one, such as a parent, reaches the point in life where they need more help than can be delivered via the occasional postcard or Skype call. That can certainly put the brakes on an previously glamorous Financially Independent lifestyle.

Or quite possibly you simply grow tired of whatever it was you thought you would be doing for the rest of your days. Just like you grew tired of working, choosing instead to pursue Financial Independence!

This isn’t a necessarily a "bad thing".

So the old FI lifestyle no longer floats your boat... what next?

Perhaps you fancy starting a lifestyle business.

Mrs Money Moustache sells stuff on Etsy.

Afford Anything’s Paula Pant does life coaching.

Brandon of Mad Fientist fame writes search engines for travel hacking.

I once lived down the road from a semi-retired lady who loved cooking amazing Korean food. She ran one room restaurant, that she only opened a couple of evenings a week when she felt like cooking. There were no bookings, no menus, and only one price. You just turned up, and providing you were one of the 8 people the place could seat, she would feed you whatever she felt like cooking that day. It was great!

With mixed results some Personal Finance bloggers have attempted to turn themselves into media talking heads or money gurus. Keynote speeches, podcasts fixtures, hosting expensive seminars and residential retreats, and so on.

These endeavours all require some form of investment, that quite likely had not featured in the future plans of the individual when they set their Financial Independence magic wealth/income/whatever number.

Plan for the unexpected.

Financially Independent, but I want more out of life!

I regularly encounter people who fancy the idea of returning to school to study something they are interested in learning about, rather than the career advancing fields of study that most of us undertook at the tail end of our full time education.

While Youtube, and Udemy can give them a taste, what many actually desire is a return to full time study in a field they find interesting like Archaeology or Psychology.

In many locales University doesn’t come cheap. Even distance education courses offered by the Open University runs to £1500 a unit! How many FI plans include dropping that kind of money over and above normal living expenses?

The change attracting Matt’s attention was the prospect of opening a café. A great many people love the idea of running their own business, particularly if doing so was compatible with their chosen lifestyle.

Adequately funding a new business venture would potentially place their Financial Independence at risk. Were the business to prove less successful than expected, or perhaps fail altogether, then the owner may face the very realistic prospect of having to return to the workforce to cover their living expenses.

If things went drastically wrong, the previously Financially Independent former business owner may face the very realistic prospect of needing to start over. Rather than a return to employment representing a brief detour while coffers are replenished, it may represent the “new normal”. Believe me when I tell you, it is ridiculously hard to put the genie back in the bottle!

Budgeting for fun and profit

Anyone contemplating leaving their chosen profession in pursuit of early retirement, or even just living a more enjoyable pace of life, should have already factored the occasional large expense into their calculations alongside the regular day-to-day lifestyle costs.

Replacing a car.

Major repairs on the house.

A young child requiring speech therapy or extensive tutoring to overcome developmental problems.

A teenage child requiring expensive orthodontic treatment.

Needing to financially help out a close family member with a sizeable sum.

You get the idea, the kind of curve ball periodically thrown up by life that may exceed a typical emergency fund.

I would be surprised if many had baked returning to school or starting a business into their Financial Independence plans.

How much would you risk?

Idealists and dreamers would smile broadly and encourage the Financially Independent person contemplating a potentially expensive life change to go for it. “If it makes you happy, then it is good”.

The Bogleheads, Reddit trolls, and Lemonfools would likely experience a conniption fit at the very idea that someone who had already achieved FI would redirect funds away from the low cost index tracker idol they so fervently worship.

The extreme frugalists would shudder in horror at mere the prospect of incurring additional outgoings. FI, at a younger than normal age, had been achieved by minimising their cost of living as much as possible. Future forecasts were benchmarked on persisting with that very frugal existence. Their budgets probably wouldn’t have the breathing room required to entertain such a change of direction.

I would argue that it is a very individual decision, based largely on personal preferences.

Money on its own doesn’t make a person happy, so the question is actually more along the lines of which potential usage of that money is likely to provide the most satisfaction and happiness.

Money on its own doesn’t make a person happy

What would I do?

Ok, enough jibber jabber. Time to put my money where my mouth is.

For mine, I think Financial Independence provides an individual with the incredible luxury of being free to choose how they spend their time.

I also think wealth is measured in time rather than money. The more time free of demands, free of obligations, and free of commitments then the wealthier a person is.

wealth is measured in time rather than money

To illustrate, consider a backpacker adventuring around the world during a gap year. They have nothing but free time, and not a care in the world. They are living the dream, truly free.

On the other hand consider a full time permanent employee in an unsatisfying yet demanding job, who is slowly being crushed under the weight of a large mortgage. This all too common existence is the very opposite of being free.

A parent with nursery age children has very limited time that could be considered free of demands and obligations.

A traditional retiree potentially has all the time in the world, and is free to queue up waiting for their local Wetherspoons pub to open on pension day.

The benefits Financial Independence provides are hard won.

The benefits Financial Independence provides are hard won.

Once established it should provide us with a safety net capable of supporting our basic needs for the rest of our lives.

Personally I wouldn’t want to jeopardise that.

However I also think that pursuing challenges and chasing dreams is exactly why many of us chose to become Financially Independent.

Having sufficient funds to cover the basic needs without working is great as far as it goes, but never feeling like I had enough money to indulge or have adventures doesn’t really sound like being independent to me.

If somebody lacks a sufficient buffer to survive those occasionally large expenditures, without having the sustainability of their Financial Independence threatened, doesn’t sound much like being free of obligations to me.

So what?

That is why I chose to keep working, albeit part time, beyond the point that I considered myself Financial Independent.

From that point onwards everything I earned was gravy, funding those life enriching experiences such as frequent travel, indulging in further education, starting a business, or whatever else happens to float my boat on a given day.

My wealth is sufficient that (for the most part) I no longer think about money. Purchasing decisions are based primarily on whether they will make me happy, or eliminate those "life suck" elements of my life.

To me that is the difference between having just scraped over the Financial Independence line and being genuinely Financially Independent.

The difference between just existing and genuinely living.

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  1. Indeed. Financial Freedom > Financial Independence ( and that's why I still have a job.


  2. Me too PoF.

    Getting back in the saddle" after a period of retirement certainly isn't easy though.

  3. Great observations here, and your points about "re-entry" are well taken. If I had been in love with my job when I reached FI, I probably would have been content to keep working for several more years to build a huge cushion for all sorts of luxuries. The reality was that I was burnt out and desperate for change, and even the six extra months I hung in felt like torture (in a nice-problems-to-have kind of way). So, you're right that I've "just scraped over the financial independence line." Ideal? I guess not. But I wouldn't say I'm "just existing." I still feel like I have plenty of money to indulge, and we're having tons of adventures around the world right now. If the next dream requires more cash than I'm willing to risk, I'm willing to go earn more first.

  4. Thanks Matt.

    My view is if you're happy doing what you're doing, and it is financially sustainable, then live the dream.

    Just be conscious that the longer you leave it, the harder a return to the workforce may be. In many professions knowledge dates and skills don't age particularly well, for example technology professions or anything requiring the meeting of "continuous professional development" obligations.

    Hopefully this isn't a problem ever encountered. If it is then perhaps things will work out like the plot in one of those home improvement reality television shows... "despite financial dramas in an early retiree's life, a rising market rode to their rescue to save the day!"

  5. Hi Slow Dad There's a load more to work than just the money you earn from it. I went back to work when, financially, I didn't need to because I missed the social side, the feeling that I was accomplishing something with a team of people, the expense account lunches, travel, dinners, booze, hotel stays ;-) If you enjoy your work then the money is a bonus. I had a great day in London yesterday where I genuinely thought "They're paying me to do this?!" I wouldn't say my best working days are better than my best retirement days, but sometimes it's a close competition.

  6. Very true Jim. Also some people thrive on having structure applied to their day, or a ready made social circle.

    Sounds like you're doing well on the expense account, there aren't too many sites out there that still tolerate a boozy lunch, let alone let you expense it!

  7. Wise words indeed Slow Dad!

    I would make one argument re: the link to ERE - I really doubt Jacob would disagree with investing in a business venture for yourself because of the perceived costs. Part of the philosophy is certainly to spend well if you are investing in yourself which presumably includes in any entrepreneurial ventures you might think up.

    I totally agree with your mindset and will likely continue part time work or freelancing even when I reach FI, as I do enjoy doing work and solving hard problems, I just prefer to do it to my own schedule not one of some mega corporation.


  8. Thanks TFS.

    My observation about ERE wasn't so much it was against the general philosophy, more that the extreme lengths they go towards achieving FIRE is unlikely to leave sufficient breathing room in their budgets to entertain ventures that may require any sort of significant outlay.