You’ve likely heard of Financial Independence. Many of the articles on this blog are about my journey towards Financial Independence (FI). But what is the motivation behind wanting to become financially independent? There are many reasons to wanting to reach financial independence. And , as you’ll discover the retirement goal may not be the main motive.
In this article, I list the main reasons people want to be Financially Independent. Of course, the motivations might not be the same for everyone, and there are some that will appeal to you more than others. It is fine. Everyone has different reasons to try to get to FI. Even not everyone is eager to get to FI!
You might have a reason for achieving financial independence I never even thought about! Please let me know in the comments if this is the case! I’d like to know the reason you want to be Financially Independent.
1. Security
Once you’ve reached financial independence, you’re secure from many situations that could lead to an income loss of significant proportions.
If, for instance, you are fired, or if your company goes bankrupt, or you’re unable to work , you should not have any problems sustaining your lifestyle. Any of these situations aren’t an issue for your financial situation once you have reached financial independence. They may still be an issue for you, but they are not a big deal. But if you’re financially secure, you’re prepared to deal with these challenges without a problem.
It’s also a guarantee of retirement. Today in Switzerland retirement isn’t all that bad. But who knows how that will be in 30 years. There may not be any pension or help for retirees. If you’re financially secure, you do not have to worry about that!
I’d like to be prepared for these events, and I am already getting prepared now. If you’re on the path to Financial Independence, these events can still be a problem. But you’ll be able to withstand them better than the majority of people. Another great benefit about FI that it will help you improve your financial standing while working towards financial independence.
Indeed, people who are on the road to FI are more financially secure than the typical. They are able to spend less and usually earn more. This will assist to achieve their goals quicker and also withstand financial troubles easier.
For me, this is the best reason to aim to achieve Financial Independence.
2. Family
Spending time with your family is crucial. Yet, most of us are too busy working or doing other things other than taking care of our family and our friends.
Financial independence gives us the freedom to be present for our family members and establish more enduring bonds.
I wish I will have more time to spend with my children and to build stronger relationships with my wife, kids and family members as well as friends.
Of course, I am not putting it off! It is crucial not to make use of FI as an excuse to delaying spending time with beloved ones. Being financially free can aid in having time to do more things that are important.
3. Freedom of choice
The majority of people who wish to be able to reach FI are looking to retire early.
Also, I think I would like to retire early. However, the possibility to retire early is far more important than retirement itself. Making the decision to retire is very important.
Currently, I still like my job. If I didn’t create software for my company I’d be creating software just for amusement. But who can say what will be the case in the next 10 to 20 years? Nobody!
Your company’s culture could change drastically. Your employees can shift. Your boss could shift too. You may like your current colleagues and boss. But what if they are replaced by someone who you don’t like? This could cause an enormous difference to your work. If you undergo some changes there is a chance that you won’t like your job like you currently do.
You too may change! People often assume that they’ll like the same things in the future. However, that isn’t usually the situation. People change a lot.
So, the option to either retire or to do something else is important for me. Once I reach FI, I could decide to retire, or even start a company or do anything else. A lot of people reach FI but don’t actually quit their jobs. Many people are still working on side jobs. Some are even doing charitable work at very low pay. It is possible to take a look at FI even though you aren’t planning to retire.
4. The time is short
Time is also a fundamental fact. It is extremely limited.
Let’s assume you’ve got around the chance to live for 80 years in all. You don’t want be working for the next 65 years and would like to be at peace for the majority of those years. You could be working until the end of your days, but you may take a break or change your routine. Also, you could reduce the amount of time you work. All of this is possible when you are financially independent.
I love my job. However, there are other things that I like about my life and would like to do many things instead of working five days a week, until I reach the age of 65. Should I be Financially Independent, I’d also think about part-time work as an option.
5. A challenge
One thing I like when I am trying to achieve Financial Independence is that reaching FI is challenging. It’s actually not common for people to be able to reach FI before retirement.
Early retirement can be an issue. While the principles are basic, the application of these concepts isn’t a trivial matter. When I first learned about money independence did not think it was even possible to attain that level of independence.
It’s good to take certain challenges in your life. It will teach you lots. It is important to master new things like investing. I’ve read many books about personal finance and investing. I’ve learned lots in less than a year to achieve financial independence. This is a wealth of knowledge!
6. An incredible journey
The road to FI demanding, it’s also extremely interesting.
I’d even say that it is an enjoyable trip. The path to FI is made by a lot of crunching. You need to calculate what your worth is. It is possible to determine your FI Ratio and determine how far off the road you are. It’s quite entertaining and interesting. I like numbers a lot.
I am also happy that I managed to decrease our expenditure in the course of time! Before, I was spending significantly more, because I didn’t view budgeting with the same perspective. Now that I am aware of what I spend I am enjoying the challenge to reduce our costs!
The investment process is fascinating. It requires a lot study to determine what you should invest in. It is crucial to know why you’re investing in your portfolios. There is no point in buying something that you don’t know the reasons behind it!
My journey to FI also made me want to start this blog. It’s also an incredible adventure. Even though this is not my very first one, I have learned a lot! and I love writing on this blog a lot.
7. Alternative paths
Trying to be financially independent and perhaps even retiring early (or at least being capable of) is not a path that many people go down.
For me, it is good. If everyone were to take the same road the route would not be so appealing. Some paths do not provide FI as a prerequisite, and that’s an excellent thing. If you’d like to be an entrepreneur , and then become wealthy, there’s nothing wrong with that.
As of now, all my routes have been the classical ones. I have gone to an elementary school. I’ve made it all until I earned the level of a Ph.D. In the end, I was accepted into the standard business as a software engineer. I am glad I can now try another road by seeking to reach FI. We’ll see how I will accomplish it!
8. FI can teach good values
Finally, the way to Financial Freedom will teach you certain fundamental values and principles.
The most important aspect for FI is Frugality. It’s hard to get to FI without being thrifty, at most to a degree. Certain people are exceedingly economical, and other people are spending relatively only.
Because you’ll be investing your way towards FI, you will likely gain some wisdom from it. The process of investing is one you should be doing with lots of thought before making any drastic choices. Your emotions are among your greatest adversaries when you invest. It is important to learn by observing your own mistakes. In my case, for instance I made a lot of investment mistakes when I first started. I’m more educated now since I’ve learned from these mistakes.
Another thing you’ll discover is that health is vital. If you’re hoping to stay healthy and live to the fullest and be healthy when you retire then you must take care about your physique. Eat healthy and do not push your body (and your mind) over their limits.
In our situation, for now, we did not necessarily make any major changes in our daily routine, however, with our garden growing, we’re eating healthier than we were before. Also, since we cook our food for ourselves most of the time, we have a better eating plan than fast-food restaurants. In 2019, we made a mini Health Plan to keep healthy for longer.
9. Generational wealth creation
If you’re using the safe withdrawal rate method it is likely that you will get more money than you will need at the final. This money could then go onto the next generation in your household.
Many people enjoy the concept of creating wealth for generations to come. For me, it is not the primary reason to try to reach financial independence, but it’s an attractive bonus. I’d love to pass some of my wealth to the next generation.
But, this shouldn’t be a reason that the next generation is not to work and rely entirely on this wealth. It could be a way to help them get financial independence when they reach it.
It is your goal for the next generation to continue passing on this generational wealth and not just spend it. Thus, an important part of this is giving the knowledge of finances to the upcoming generation. And hopefully, they will carry on this pattern.
Conclusion
As you can see, there are a myriad of motives to pursue financial freedom.
You’ll enjoy a lot more freedom once financially secure. Also, your life and the lives of your loved ones is going to be much easier. Furthermore, it could provide you with a variety of things, and it can be an interesting experience. My life has changed as I tried to achieve FI.
Perhaps one or more of these reasons will appeal to you. Perhaps they won’t. Not everybody has the same motives to strive for financial independence. And some people may not even want to get to FI in the first place. There is no reason everybody to adopt the FIRE philosophy. There are plenty of other options. It is up to you to choose the one that suits you the most.
Do not make the mistake of trying to achieve FI only because other people have done it. If FIRE doesn’t appeal for you, strive to reach the goals you wish to achieve rather than the goals of other people!
Come read our FIRE blog for more stories like this.