This past week I was reminded of the flexibility I have as my wife and I have reached financial freedom. This flexibility allowed me to be a guest on a podcast. Give a Money Coach presentation to a small business team. Travel for a job interview and even pick up my parents at the airport and entertain them for 2 weeks. This got me to thinking just how flexible financial freedom relates to financial independence and the need to remain flexible.
Financial Freedom Defined
Let’s define financial freedom, shall we?
Financial freedom is going to mean a lot of different things to a lot of different people. My definition of financial freedom starts with a checklist:
- No personal or consumer debt
- An emergency fund that allows you to sleep at night
- Super saver or Double Super Saver
- Income or Investments that allow one person the flexibility of work optional, like the book
- Expenses are low enough that financial independence is on the horizon and your passive income and investments are able to cover some of your current expenses if you choose
The checklist is a good place to start since this has many tangible items to compare against. A simplified holistic view of financial freedom to me means that my financial choices are less about money. My views are more about focusing on the things we value most and that make us happy. That’s my simple answer.
Flexibility
I started my own business as a money coach. Throughout this year the business will grow slow and steady. This is a luxury that I am unfamiliar with as it relates to our financial situation.
I am not looking for 100 clients or knocking down doors in the attempt to earn six figures per year at the fastest rate possible. This can lead to burn out and unhappiness.
These past weeks have been a great reminder on how important flexibility is to me, rather than money. Don’t get me wrong, I have my index funds growing in full force, but this business is not an index fund.
My business not only as a money coach but everything you see at Even Steven Money is about happiness and flexibility.
The concept of enjoying myself, helping others, and the effort I put into my business will have very little correlation to the bottom line. This concept goes against almost all business rules and can be a struggle to adopt.
What’s just as important to me as flexibility is the excitement, joy, and even passion that comes with helping others grow their knowledge with money. Flexibility has been the key.
Remain Flexible
In financial independence, as it relates to retire early aka FIRE, one of the pillars is to remain flexible with your financial life.
You will hear many of those who have reached financial independence preach the benefits of flexibility. This use revolves mostly around sequence of returns and understanding that while the 4% rule will rarely miss the mark and run your investments to $0.
The flexibility in using exactly 4% adjusted for inflation each year. The willingness to lower your expenses. The ability to make extra income to increase the probability of your money lasting until the day you die.
The practice to remain flexible is part of financial independence retire early aka FIRE. With financial freedom what if instead, we built that flexibility into our life as we made our way to financial independence?
Would it make more sense to build a level of flexibility into your life during your pursuit of financial independence?
The Case for Financial Freedom
During the last few years of my financial life, I attacked my personal debt with the ferocious aggressiveness of a tornado. We took a new strategy called the house hack and applied extra income towards paying off our Miami rental home. This all led to a big question at the beginning of 2017. What’s next?
Financial freedom has opened up the doors to become more flexible. This means we have more freedom to save money, make purchases, and enjoy what matters most. This cultivated in selling our Chicago home and moving across the country to Miami Florida to be closer to the family.
This year will be more about staying close to home and experiencing what Miami, Florida has to offer. As a result of our love to travel our plans also include visiting the likes of Chicago, Colorado, Washington D.C., and even Italy. These plans would not be possible without making travel a focus in our lives.
We are about living our best life now. Today health and fitness is a key part of our lifestyle. I have seen what old age and poor health can do to mobility later in life, even today. It’s why for certain that I head to my local Crossfit gym on a daily basis, walk my dog a couple of times a day, and eat healthy.
Start with Paying Off Debt, Move to Saving Money and Investing, Create Financial Freedom, Transition Effortlessly to Financial Independence
This is how my financial story all started. My personal debt, which I tracked using Personal Capital, was over $100,000 and I crossed a huge hurdle in paying that off in late 2015. Then in 2016, we made a personal decision to attack our rental mortgage in addition to saving and investing. At the end of 2016, our rental mortgage was paid off. In 2017, we transitioned to increasing our savings rate in our retirement and brokerage accounts.
A larger savings rate with low expenses led us to pick up and move to be closer to my wife’s family. Most importantly we created our version of financial freedom. Now we are taking each day until financial independence creating the life that fits who we are and what we plan to pursue.
Essentially we are taking the next 3 years of our financial lives and turning them into our effortless transition to financial independence.