As I may have mentioned before, the benefits of financial independence lie in the journey as much as the destination.
If financial independence were all about the destination, then lottery winners would all be happy, well adjusted people.
But very often they are not. About one third of lottery jackpot winners end up bankrupt.
People are actually more likely to go bankrupt after winning the lottery jackpot than if they never won the lottery at all. What does that tell you about human nature?
Well, it tells me that money is not the answer to all problems. Not having money is a problem…but so is not having meaning, purpose and challenge in your life.
It also tells me that people don’t value things that they haven’t worked for as highly as things that they have worked for. Think about the things in your life that you are most proud of? Are they the easy things (like switching TV channel) or are they the hard things (like raising a child)? To ask the question is to answer it.
Happiness comes from the pursuit of tough but achievable goals. The discomfort during a marathon is an essential part of The Process. The pain fades after you finish the marathon but the quiet satisfaction lasts forever.
Was there ever a more over-rated fantasy than the idea of just retiring to the beach to count the grains of sand? I’m not knocking people who fantasise about holidays or about quitting work. God knows, I’ve been that person. Its an understandable reaction to stress or burn-out or boredom at work.
I’m not glamourising pain either. I sometimes see people grumbling about the stoicism element of financial independence (in simple terms: what doesn’t kill you makes you stronger). Grumpy geeks call that pseudoscience because they don’t know which cell in their spreadsheet to put that into.
I wish it were possible for us humans to learn and grow whilst staying in our comfort zone, always safe, never making mistakes, never getting our feelings hurt. The tragedy of the human condition is that it doesn’t work like that.
Getting to financial independence is not easy and it takes time. In that time there are no guarantees that life won’t kick you in the nuts.
But here’s the good news. You don’t have to wait years for the benefits of financial independence. That’s because many of the benefits start to kick in the very first day that you stumble across the concept of financial independence.
Benefit 1: You have a mission
Having the goal of FI gives your life direction and something to aim towards that’s better than where you are now.
Begin with the end in mind. In other words, have an idea of where you want to get to and what that will look like for you. Its important that its your vision. No one else can decide this for you.
And did I mention that financial independence is not binary? So maybe your mission is not retirement by 40. Maybe your goal is to get out of debt? That does NOT make you a second class citizen in FI club.
Everyone is different so it matters less what your precise goal is than having a vision in mind that sustains you through tough times.
Benefit 2: Learning
Lifelong learning has become a cliche that’s over-used by politicians and earnest media presenters.
Which is a shame because its actually a great concept. The idea that you do all your learning in school and college is utterly ridiculous. Those places teach conformity and they certainly don’t teach most people how to think for themselves.
Most people stop learning by the time they are 30. Look at people actually spend their hard-earned money. How many parents spend a small fortune on little Jemima’s clarinet lessons yet stop spending anything on their own learning and development?
Modern society seems to make children out of us. Its easy to become infantilised outside your own specialisation. But you need to become a generalist not (just) a specialist. A fox not a hedgehog.
I often see professional people at the start of their FI journey panicking because they don’t immediately know the “correct” fund / platform / savings rate / tax-sheltered account / whatever. Relax guys! It took me 25 years to learn everything that I know about investing.
I didn’t wait until I was comfortable before getting started. It’s more important to get started and learn to enjoy problem solving: the “Aha!” moment when you put another piece of the jigsaw into place.
Benefit 3: Exercising your frugality muscle
Everyone is different. For some, frugality comes naturally. For others, quitting shopping as a leisure activity seems to be like quitting heroin cold turkey.
When I read getting out of debt blogs, I can see how hard it can be. You can feel the pain as the writer talks about sacrifice and deprivation when going past stuff in shops without buying it. Their frugality muscles have become weak and flabby and their monkey brain associates buying shit with a “shoppers high”.
At the start it takes willpower to pump up your frugality muscle. But the good news is that it gets easier and easier.
Neuroplasticity is your friend here. In other words, the associations or “pleasure pathways” in your brain can be re-wired over time. I now wince when I think of driving and queuing to get into a
consumer hellhole shopping centre, but that was not always the case.
Make a game of it and enjoy the process. If you can learn over time to get the same highs from stashing money that you used to get from shopping, you are winning.
Benefit 4: Exercising your actual muscles
Time and again, I see people really “get it” via their experience with exercise (whether it be hiking, running, cycling or lifting weights). The idea of work now leading to greater rewards later (not to mention general non-whineyness) comes naturally to people that exercise.
Yes, there are cost-savings from walking and cycling around your local neighborhood rather than jumping into your car and sitting in a traffic jam. But this is far more about quality of life than it is about penny-pinching. I’m with MMM when he talks about muscle over motor. If you don’t walk or ride a bike to get around, maybe there is something missing from your life?
What starts out being about cost saving, ends up being about a better quality of life. This is what I’m talking about when I say you come for the money, you stay to save the world.
Benefit 5: Being a grown up
How can you tell if you’re a grown-up?
Grown-ups accept that life is a series of choices and trade-offs. You can afford anything, you just can’t afford everything. Financial independence means making the most of your choices: being intentional about how you spend your time and your money.
Grown-ups don’t complain when someone suggests they try walking rather than driving or that maybe donuts aren’t that good for you. Grown-ups have stuff to do in the real world so they do not spend their time leaving whiney comments on the internet.
Benefit 6: Finding your tribe
Before discovering FI, you may have felt like you were surrounded by consumerism, operating deep in enemy territory.
I’m not saying that you should just choose your friends only from FI club: I certainly don’t. But its good to know other people that are living well without worrying about keeping up with the Joneses.
There’s truth in that old saying that you are the average of the 5 people that you spend most time with. You should actively manage your own life and choosing your friends is part of that.
Benefit 7: Peace of mind
Loads of stuff feeds into your sense of well-being: your money situation, your work, your relationships, your hormones, physical fitness etc etc. It’s complex.
But there’s no doubt that anxiety can be a sign that you have not got your shit together, either financially or physically.
If you don’t know what’s going on in your pension and you feel a sense of unease when thinking about the future…well, maybe that’s no co-incidence?
For me, there is peace of mind in knowing that I played the hand I was dealt as well as I could. Yes the stockmarket is volatile. Yes, life is random. But even if bad things happen, there is peace in knowing that you did the right thing.
Now is good
These are the immediate benefits of financial independence. The reason to do this stuff is because its the right thing to do NOW.
The immediate benefit of FI is the sense of making progress in life. You have a clear goal. You have a way of measuring your progress. Its very tangible.
FI offers a code to live by. But not a strict Taliban-style ideology set by mad old men wearing dresses, clutching books that only they can interpret.
No, you get to create your own code. Ultimately you are coming up with your own rules for life.