There has been a quiet movement sweeping across the country that is picking up steam.  It’s called FIRE, which stands for Financial Independence, Retire Early.  Typically, people assume their retirement date is when your company gives you a pension (if those still exists) OR at age 62 when you are eligible for Social Security (if that will still exist).  

However, those traditional milestones do not have to signify when you can retire.  Retirement is not based on a date or an age.  It is actually based on when you have enough resources to live the life you want without working.   Do not allow age or any company to dictate when you can retire.  You are in control.  

The problem is that most people are programmed to believe the former narrative.  Why? Because that’s what your employer wants you to believe and this is what we are taught in school.  The truth is that we have been prescribing to the wrong plan.  

What is Financial Independence?

Jim Rohn, former international business speaker, quotes financial independence as “your ability to live on the income of your personal resources”.  In other words, you are financially independent when you have accumulated enough resources to live the life that you want without exchanging your time for dollars.

You can achieve financial independence using two methods or by using a combination of the two.  

• Option 1 – Save and invest the amount you need to retire.  (Need help with calculating your retirement number? Click here.) 
• Option 2 – Create enough passive income streams that consistently cover your monthly expenses; think royalties or rental income.  

The financial independence number varies from person to person because it is based on the lifestyle you want to live.  There are people who have reached their financial independence number by saving the bare minimum to cover their expenses.  This is considered Lean FIRE.  This approach assumes limited flexibility in your lifestyle.  Most people who pursue frugality will follow this approach.  

Another option is to pursue Fat FIRE, which as the name suggests, covers all your expenses plus more.

Whichever Financial Independence number you choose to pursue, here are 5 reasons why you need to take action on pursuing an option.

1 – Money Can Stress You Out

According to a study by VARO Money, 30 percent of Americans are stressed out about money. Surprisingly it is not because of having too much.  It’s because they do not have enough to respond to unexpected expenses.  With less than half of the population saving at least $1,000, it’s inevitable that people will be stressed out and losing sleep.   

This chronic stress can lead to long-term issues that may affect your health, relationships, and a host of other areas in your life.  We are too blessed to be stressed and especially from stress that we can controlif we have the right plan. 

2 – Automation is Replacing Jobs

Technology is changing at a rapid pace and it is disrupting every industry.  Along with this rapid change is a huge push for automation.  In fact, McKinsey Global Institute reports that by 2030 approximately 375 million jobs will be replaced by some form of artificial intelligence. That’s only 11 years away.  In the United States, the Bureau of Labor and Statistics is predicting that at least 1.4 million jobs will be gone by 2026.  That’s 7 years from now.  

Obviously, we understand the rationale for greater reliance on automation – Machines are cheaper to maintain, faster to respond, and prone to fewer errors.  Honestly, how many times have you gone through self-checkout because the lines were long? Or simply stopped at the ATM because you didn’t feel like going inside the bank to interact with a teller.  With the rise of driverless cars and trains on the horizon, this is just the tip of the iceberg.  

As much as someone may want to protect certain jobs, automation is changing the playing field. It is your responsibility to be agile and multi-skilled so you can keep pace with the changes.   

3 – You Can Freely Pursue Your Purpose

Now that we have discussed the heavy stuff, we can focus on the lighter side.  Financial independence gives you the ability to live life on your own terms.  You can do what you want when you want.  This means you have dedicated time to live your true purpose and not be obligated to a job for survival.   

According to a Gallup poll, approximately 70 percent of people are dissatisfied and/or disengaged from their job.  Let that sink in.  70 percent. That means well more than half of us are silently suffering in a job that we do not enjoy but, yet we spend over a third of our day doing it.  This has become the new normal; however, I am challenging you to be different.  The good news is that it doesn’t have to be this way.  

We are all sent to Earth for a short period of time to fulfill our purpose.  It’s our obligation to find our purpose and share it with the world. With time and mental clarity, financial independence can afford you the time to experience the purpose that is uniquely yours.   

4 – Available to Help Others

To whom much is given, much is required – Luke 12:48

Your purpose will likely entail helping or serving others in one way or another to make this world a better place.  Now, I could be wrong, but why would you serve yourself? 

With the freedom to choose how you spend your time, you can devote more time to volunteering in your community.  Whether it be teaching kids how to read, working in a homeless shelter, or creating your own non-profit, you have the freedom to serve when you would otherwise be trying to fit it around your work schedule.  

In addition to offering your time, you will also have the capacity to help monetarily as well. While some people frown at all the money that wealthy people have, they typically give the most.  Why? Because they have it to give.  

Don’t get me wrong, those that aren’t wealthy can still be generous givers, but oftentimes it can be a balancing act between covering their day to day expenses.  If you are robbing Peter to pay Paul, it’s hard to be overly generous.

I’m not suggesting that you do not help others until you are financially independent, but if you are financially secure, you are in a better position to be a blessing to others without guilt.   

5 – Leave A Legacy Through Generational Wealth

The next generation should not have to start from scratch.  Please read that sentence again.  With assets that build over time, you give your heirs a running start in life. Too often generations have been left with negative wealth and have to struggle to find their way through life. 

It’s time to change the narrative and shift the focus from excessive consumerism to wealth accumulation. Redefine the American dream from a big house and a luxury car to financial independence and security not just for your existing family but for the next generation as well.  With a hand up, children can bypass the hurdles you had to jump and trip over to get ahead in life.  

Your kids should be able to go to school without tens of thousands of student loan debt.  They should not have to accept the first job offer they receive in order to survive but they should have the opportunity to find their passion. Ideally, they will skip the rat race altogether.

Final Thoughts

While retiring early may not be a desire for everyone, financial independence is something we can all achieve if you follow the right plan.  If you are keeping up with the Jones’, with the luxury car, big house, and negative net worth, I’m pretty sure that’s the wrong plan.  

Believe that financial independence is for you and choose a different plan.  Now that’sgetting your Finances On Point.