Can you feel free financially before you actually have reached financial freedom?
Derek Sivers, author of Anything You Want, and founder of CDbaby, recounts the same experience I had about feeling free versus actually having enough money to never have to work again in your life. He confirms that time freedom is more important than any actual money or investments you’ve accumulated. We may be mistaken in thinking that the only, or primary, way to feel free is to reach financial freedom. In fact, it could take you a long time to reach financial freedom, especially if you are on the traditional path of a 30-40 year working career saving 10-15% of your salary. What if there were a way to get the feeling of freedom you crave without having the massive pile of money that would enable you to quit and never work again (F.I.R.E)?
I gained control over my time when I left the bank and started my own business, LifeCoach. I could set my own hours, choose my own clients, take long lunch breaks, take Mondays and Fridays off and sleep in as long as I wanted to, which felt like the ultimate luxury after having to get up at 6:30 every morning to go to my bank job. At the time that I quit my job in banking, I only had two years’ living expenses in a money market account—my cash reserve. I was nowhere near financially independent (25 years of living expenses), but I felt free!
Derek Sivers reports the same—that when he had a total of $12K in the bank and could be a musician full-time making ends meet doing a few gigs a month, he felt he had made it. Before he quit, Sivers had a day job in Manhattan paying about $20K a year which was minimum wage. He never ate out, never took a taxi until he saved up enough to quit and be a musician. Years later he sold his company, CDBaby for a veritable fortune. But that wasn’t what made the difference in his feeling free. The real freedom occurred when he had $12K in the bank and quit his day job. It was the same for me. With only two years of living expenses socked away, I still needed to work. But now, and ever since, it has been on my terms, doing what I love to do –coaching, speaking and writing. The old saying has some merit, “Do work you love and you’ll never work a day in your life.”
As Morgan Housel says in his book, The Psychology of Money, the real value of money is that it can buy you time freedom. How do you create the experience of having plenty of time?
Here is my challenge to you. Buy some time freedom right now. Don’t wait until you have millions in the bank before you start feeling the wonderful joy of freedom.
First, answer this question: When I’m rich I’ll…
(Write down everything that pops into your head without editing or censoring).
For example, I wrote down:
- Hire a house cleaner.
- Have a personal chef to prepare healthy meals.
- Take a full month off every summer and three weeks off every Christmas.
- Take Fridays off every week.
- Sleep in every morning as much as I want.
- Quit my banking job and do whatever I love most!
- Travel around the world in luxury and style.
- Have a gardener.
- Have a nanny for the children.
- Live in a gorgeous house by the beach.
- Take holidays every school break with the children.
- Be home every day after school to be with the children.
- Have a beautiful summer home.
- Hire a personal trainer.
- Have a life coach.
Now, make your own “rich list” right now!
What I’ve discovered is that I could have all of this stuff before actually having a million in the bank! It doesn’t cost as much as I thought it would to live a rich and fabulous life. (We drive used cars and employ a few other tricks to live the lux life).
Funny enough, so much of freedom is psychological. I’ve been following a number of FIRE bloggers who have finally reached their financial independence goal. However, they then decided that knowing that they could quit at any time made them like their jobs more. So, they didn’t quit! Others moved to part-time work to claim time freedom, realizing that again, now that they could afford to quit, they didn’t dislike their jobs after all.
Perhaps the real goal isn’t to have so many millions in the bank that you never have to work another day in your life. Maybe it is to work on ways to get that feeling of time freedom. And now is the ideal time to negotiate that, given so many have been working from home.
And of course, a huge step to gaining time freedom is to do work you love. Once you find work or a career you love, the desire to quit disappears and you’ll be so much happier. What would you do as a hobby or lifestyle business in retirement? Start that now in the evenings and weekends and use that extra money to accelerate your way to financial freedom.
What I’ve learned is that you can live well now and experience freedom by paying off your credit cards, getting a two year cash reserve in place and doing work you really love. It’s as simple as that!