Recently I was thinking (or questioning my actions) while sitting out the back during the last day of a nice hurricane swell.
It was the end of day four and I just made it through taking three waves on the head with my paddle back out and started to ask myself “Is this worth the price”? This is the best four days of surfing I’ve ever had. I’m much later in life learning this hobby; figuring out how to and taking off on 3-5’ waves on smaller boards is hard. Frankly, everything just hurt. My arms, shoulders, neck, head, and ears. Sea lice was making an appearance and adding some stinging to the mix. I was run over by someone making an unexpected turn and took a ding in my board. I eventually start asking myself again “Is this worth the price?” The 3-10 seconds of glory for all this pain?
The answer is a resounding yes!
In all fairness, I did go to the beach shortly afterwards and call it a day. If the ocean is big enough, there is a point of exhaustion where it’s just not safe to be out there. Between whitewash, rocks, and a firm board that can spear an exhausted surfer on a wipeout, there is a point where it’s time to come in for safety.
What does all this surfing talk have to do with financial independence?
With Financial Independence, you have to ask yourself a similar question: Are you willing to pay the price?
Why can’t most people achieve financial independence? They either don’t know about it or have made a conscious decision not to pay the price. What price is paid for Financial Independence?
The math behind financial independence is simple. The discipline to earn more than you spend and invest the difference for a decade is hard. There is temptation to spend money all around us. Advertising exists for the purpose to part you from your money. Employers will manage their labor costs to the minimum amount possible. Friends, family, and coworkers will jump on the spending treadmill of lifestyle inflation and beg you to join them.
The begging may not be in the form of “join us for dinner”, but it’ll be in the houses they own, the cars they drive, the fancy vacations they talk about. Why aren’t you experiencing the same things in life? Why does your car look the way it does? Have you seen the newest iPhone?
What about eating meals out? Have you heard about this new restaurant? Even though in debt, why not have peasants prepare and serve you your food like 16th century royalty?
What about cars? Let me talk about my new Tesla and give you factoids about why a $100,000 car is actually a good financial decision (it’s not).
If you make the mistake of telling one of these people that financial independence will allow you to buy back your time and *gasp* stop working, you’ll likely be greeted with the comment of whatever will you do all day? Or even “what are you going to do, go to the beach every day” (the answer is we can try).
Financial Independence requires different choices. The choices start with income: Do you work at a job where you can earn 2-3x the average salary in the US? If so, great! Work hard to keep increasing that salary, spend like you make an average salary, then invest the difference in a low cost mutual fund and go enjoy life. If not, what career options do you have that can increase your income?
If you can’t get your primary income up? Look at other pathways for wealth. Real estate is the classic example: Convert active work into wealth that can be realized under long term capital gains. It doesn’t matter what you choose in real estate, it could be rentals, it could be wholesaling, it could be fixing and flipping houses, but pick something. It requires sacrifice and thinking differently. Whatever you do, don’t make that mistake of bringing up rentals to the spendy friends and family though. If they are anything like mine, you’ll be greeted with some friend or family’s horror story about that one tenant who did $20,000 worth of damage and how it’s just so risky.
What I’ve learned over the years is that a spendy friend or family member can’t comprehend any other way. It’s completely normal to work for 35-45 years and be told what to do all day. I know that seems normal, but it doesn’t have to be. You can try to help, but it’s more likely the ones who are curious about financial independence will reach out to you. The question you have to softly approach with them is this: Are they willing to pay the price?
Credit to Alan Donegan for his post on this subject in 2019.
Having paid the price, and now being in the position of reaping the rewards, I can assure those who struggle with the concept of FI that yes, it is worth the price. Nothing of value is free. FI is of tremendous value, and worth every penny of the price.
“Do you work at a job where you can earn 2-3x the average salary in the US? If so, great! Work hard to keep increasing that salary, spend like you make an average salary, then invest the difference in a low cost mutual fund and go enjoy life.”
That was my entire financial plan. I spent less than the average worker in my company but made two to three times what they earned. I lived a rich life my entire career and live an ever richer one now in retirement. I do think the price I paid was fairly small because I was extremely happy living on just a portion of what I made. That would have been harder if I was only able to make a median type income. But then again, I made more because I chose my career wisely.
Great post, thanks for sharing. I’m thinking a good majority of folks aren’t in a position to be able to pay the price. They can’t save for a decade, because of the financial obligations they have today that have them turned upside down. You’re right about being bombarded from all the opportunities to buy things, I wish it wasn’t so, it’s very destructive. Enjoy your surfing and be careful!!