Financial freedom grows along a spectrum and financial independence is one point in the journey. I like to focus on growing financial freedom. Because it’s something we can all do. At each step in the journey.
You pay off some debt, your financial freedom grows.
You start investing, your financial freedom grows.
You grow the gap between your expenses and your income, and your financial freedom grows.
Each step is a win. Each month can be a win.
Financial independence is one point in the timeline. That specific point that your passive income and investments can cover your expenses.
It also means you could have FI one day and not the next. If your passive income drops sharply, or your expenses go up, you might not be FI any longer.
Even after you hit that benchmark of financial independence, your financial freedom can continue to grow.
Maybe your financial freedom grows to the point where you could care for a parent. It could grow to the point that you are able to double your giving or 10x your giving. It could keep growing so your lifestyle could radically expand. It might keep growing to the point you have 10x more than you need any given month.
This is the question you should ask at each point along the way:
How can I invest in changes that will make our life and the lives of others better?
As soon as you pay off debt, ask this.
As soon as your saving 50% of your income, ask this.
As soon as you have a years expenses saved, ask this.
As soon as your passive income covers half your bills, ask this.
When your two years out from FI, ask this.
When you hit FI, ask this.
When your FIx2, ask this.
When your FIx5, ask this.
Ask at each step. Because life doesn’t start at when you hit the point of financial independence. And FI doesn’t magically change things. You don’t magically change.
You change things with intention and action. Every step of the way, you can make your life and the life of others better.
I needed to hear this word of encouragement today! Running after four little kids and feeling stressed, burnt out, poor, and sick of the tiny house and the view of farmyard junk out the window . . . well, on a day like today, it makes all the difference to reflect on the little wins along the journey, not just that we’re not “there” yet. Thanks so much.
This is why I love reading your posts, Jillian. I actually (currently) like working and am not necessarily interested in super early retirement. I AM interested in financial freedom because who knows what the future holds? I love the idea of using your assets/resources to try to improve the world, community or to just have the ability to help someone who needs a little boost. Happy Holidays to you and your family! Keep up the good work 🙂
Excellent post. To me, FI feels out of reach. I am not currently on a trajectory to early retirement. On good days, when I read about people that are, maybe it motivates me to make little tweaks so that I’m on a slightly different financial trajectory. On other days, that tendency to compare sneaks in and I can feel bad about where I’m at financially. Even though I really have much more financial freedom than many people and perhaps more importantly I have a job that gives me a whole bunch of lifestyle freedom.
Setting out the goal to save $10k this year, I reached it. So the question is, what is my next savings goal and in what form? (crypto, stocks, precious metals) – I don’t mind working, actually, I work better knowing it doesn’t have the “binding” feeling (aka, if I quit today, I will be ok) – I love my job and know it makes a difference. Love reading this post, it always gives my complacent nature a quick boost.
As to investing, I would stick with really basic investments. Index funds or real estate. Congrats on that 10k! Keep up the good work.
Haha! I love it, Jillian. You know, we are told the rebel is always questioning authority. Maybe the true rebel is always questioning him or herself. “As soon as you pay off debt, ask this…”
Ha! Yeah, that true. Always questioning. =)