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So you just found out about financial freedom. Welcome to the journey. You’re ready to start saving your income and look at the possibilities of early retirement or even a traditional retirement. But why do you want to save millions of dollars over the next several decades?
This, my friend, is called your Why of FI. Why do you want to be financially independent? What will you do with your future financial freedom? How do you want to conquer the world, so to speak?
Have you seen the film Office Space? It’s a cult classic beloved by the financial independence community. One of the themes of the movie is what characters would do with financial freedom.
So tell me, what would you do with a million dollars? Would you travel the world? Would you lie on the beach and drink margaritas? Would you write a life-changing book for millions of people to read? Would you devote a portion of your income to causes you believe in? To help others on their FI journey? Maybe live off-grid or create a homestead?
“I don’t know” is an acceptable answer! Even though I haven’t reached financial freedom, I can help. Because I have a few “secrets” I’d like to share.
- All those things I mentioned earlier, writing books, drinking margaritas, and traveling the world, can all been done. I have some awesome friends and acquaintances in the financial independence community who have done all those things and more. You may have even heard of some of them, or know them yourself.
- You don’t have to quit your job! If you love what you do, are starting your own business, love investing in real estate, or just enjoy your life now, you can keep doing what you love! Not everyone who achieves financial freedom quits their job and hobbies.
- There are multiple paths to financial independence. There are as many reasons to obtain financial freedom as there are people. Your reason can be unique. It can also be the same as those of your neighbors and friends you make along your money journey.
- There are lots of people doing some amazing things post financial independence. I happen to know a few of them. I hope to introduce you to some.
Attitude Toward Work After Attaining Financial Independence
What is your attitude toward working now? Are you working just for money and an income? Do you love your job or hate it? Is it something you would do for free? Do you live to work or work to live? Do these questions have any wrong answers?
What Are Some Healthy Attitudes Toward Work After Attaining Financial Independence?
The financial freedom movement could have been born out of some of these questions. An unhealthy attitude toward work can cause stress, burnout, and feeling overworked and unhappy. All of these feelings led to the movement.
So what would a healthy attitude toward work look like? You have millions of dollars and do what you want every day. What does work look like?
Well, if you’re traveling the world and lying on the beach, work looks like supporting the local economy. Helping those who are still working and serving you. Here’s a tip, give generously. (I love a good pun.)
If tipping isn’t customary in the culture, try buying something extra or for someone else. Help those still working out a bit. Others may still be working for money and living for that income.
If you’re still working a job you love, ask how you can support those who are still working for an income. Can you volunteer your time? Make some extra donations? Support financial independence and other content creators?
My local Bogleheads group loved helping those still on their financial freedom journey. For those who don’t know, Bogleheads are fans of Jack Bogle, the founder of Vanguard.They love index funds and analyzing investment portfolios.
How Could Having Financial Well-Being Help You Be More Productive in Your Work?
You may be asking, did he mention being more productive? Yes, I did. How could you be more productive without worrying about income? Having financial security takes a load of stress off.
Not worrying about money, a lot of financially free creators write books and produce other content to help others. They can be productive and reach out to more people because they aren’t stressed about money. In turn, they sometimes end up making more in passive income than when they were working. Unintended consequences can be positive too.
What Are the Benefits of Being Financially Independent, and How Does It Impact Your Work?
One benefit we just discussed is making more passive income. Another is helping others. Yes, But you can also have a better time. More financial independence, more financial freedom, more fun! As my friend Diana says, FI is better with friends.
The biggest benefit, in my opinion, is that you can follow your passion — whether it’s continuing your current work or finding another type of work, or not working at all.
Financial freedom benefits all. Specifically, women’s financial freedom is important for many reasons. Women:
- Battle the gender pay gap
- Might experience pay discrimination
- Until the 1960s couldn’t have their own bank account
- Sometimes have to choose between career and family
- Reach financial independence later than men on average
- Face unique financial challenges
Thanks to financial freedom, Angela and Regina were able to create their passion. Out of their passion came Women’sPersonalFinance.org. It’s a space where women can not only discuss these unique challenges but also help and guide others along the way. Thanks to financial freedom, Angela and Regina can pay women contributors.
Reflecting on Life After Financial Independence
If you have followed the financial independence community for a while, you may know of Brandon. Brandon is better known as the Mad Fientist. In late 2021, Brandon posted his fifth and final update on what financial independence looked like for him.
In this and previous updates, Brandon reflects on his path to financial freedom, finding his baseline spending, and creating his first music album. What I admire most about Brandon’s music album was he didn’t care if he didn’t make money on it. He did spend a large amount of money on a quality producer. Brandon wanted to make the best album he could with his resources, even if it meant losing a lot of money. The money side of it didn’t matter. For him, it was about creating quality music and following his passion.
What Will It Feel Like to Be Financially Independent?
I think this may be the Fioneer’s favorite question. Jess designed an entire lifestyle for herself around this question. Thus, the idea of SlowFI was created. SlowFi is how you create financial freedom without being financially independent.
But wait. I’ve been using these terms throughout this article without explaining the difference.
Financial freedom is a mindset, a lifestyle choice. Financial independence is a financial milestone that allows you to achieve financial freedom.
How Can You Adopt the Financial Freedom Mindset?
Do what you want. Hear me out before you give those skeptical looks. Pick a time in your day. Morning, lunch, evening, whatever time you’re not working. Do what you want. If you can’t do what you want, like travel, write down what you want to do at that time. Then write down how you can. Do you need more money? A higher income? A more flexible job? What’s stopping you from being financially free? How can you change it?
What Do Financially Successful People Do Once They Have Achieved Financial Freedom?
My favorite answer to every personal finance question: It depends. It depends on the person, it depends on what they enjoy, and it depends on what their spouse does. Some successful people in the financial independence community:
- Run a business
- Help their community
- Travel full-time
- Continue working
- Write books
- Produce social media content
- Attend personal finance conferences/meetups
- A little bit of everything
Although most well-known bloggers stop blogging consistently, some provide updates. I mentioned the Mad Fientist earlier. Carl from 1500days.com also has a podcast, continues to invest in real estate, attend conferences, and more. His wife, Mindy, continues working her dream job co-hosting the Bigger Pockets Money Podcast.
Spending After Reaching Financial Freedom
Just like post financial independence activities, spending varies as well. Some bloggers share their spending habits. The Mad Fientist shared in his updates that he and his wife had a year of spending however they wanted. After tracking, they found a baseline where they spent enough to make them happy. Spending after reaching financial freedom works best if you have more than enough money but are willing to be flexible with your spending habits.
What Can You Do to Maintain Your Financial Freedom?
As I mentioned earlier, flexibility is key. Another is having more than enough money for financial freedom. Justin from Rootofgood.com often shares how much money his family spends monthly and how much his investments grow. Spoiler alert, they spend only about 25-50% of what their investments make. Even in months when their investments lose money, their spending habits will not destroy their financial freedom.
How Will Your Attitude Toward Spending Money Change After Becoming Financially Free?
The common knowledge states that money magnifies more of who you are. If you’re a high spender, then you may spend more after becoming financially free. If you continue to live frugally, it will be harder for you to spend money than to save it.
Back to the Mad Fientist example, their happiness didn’t increase with luxurious spending. It increased only with a bit more spending and less worrying about optimizing every dollar.
How Do You Budget Once You Have Become Financially Free?
If you’re a fan of Paula Pant and not budgeting, you don’t. Pay your bills, spend the rest, and track your spending. If you like budgets and spreadsheets, continue budgeting. When you become financially free and have enough money, budgeting becomes less stressful. You have an emergency fund or ways to pay an emergency and have reserves. Your principal investments can keep growing, and most issues won’t deter your financial freedom.
Maintaining Assets With Financial Freedom
Along with not worrying about a strict budget and emergencies that could tear you apart, you may have passive income. Most in the financial independence community continue to make passive income — sometimes unintentionally.
What Are the Benefits of Using Passive Income to Supplement Your Financial Freedom?
The biggest benefit is having more than enough money. If your passive income covers your expenses and lifestyle, you may not have to touch your investments, unless your investments are your only source of passive income.
The main benefit is freedom. We want freedom of our time. We want to choose our day. We want financial security and not have to worry about doing what we don’t want to do for money. We want meaningful work. We want our purpose to be our driving factor.
How Many Different Income-Generating Assets Should You Own After Achieving Financial Freedom?
There’s a common saying that the average millionaire has about seven different income streams. Some might count every retirement account separately, and some may count them all as one. What matters is the amount of income the asset generates.
Many in the financial independence community love investing in real estate. Real estate investors could have hundreds of different assets. It depends on your lifestyle and spending. The minimum you should have is probably three or four. Some are passive or semi-passive. You should have one or two that covers your expenses and one or two more that covers any lifestyle expenses and extras.
What Assets Are Best for Achieving Financial Freedom?
There are several assets you can leverage to achieve financial independence. Here are some ideas to help build your three to seven (or more) to become a millionaire:
- Dividend stocks
- Exchange-traded funds (ETFs)
- Index funds and mutual funds
- Savings accounts
- Certificates of deposit (CDs)
- Real estate properties
- Media assets
- Small businesses
- Stock photos
- Solar panels
The Bottom Line
You don’t need to fear if you’re not sure what you want to do with your newfound financial freedom. Once you have earned enough passive income to be financially independent, the world is your oyster.
The best place to start is to find your attitude toward work. Do you want to work until you’re in your grave? Is your purpose to keep working until you’re physically unable? If so, that’s OK! If you want to stop working and lounge around the world, that’s OK too!
Just don’t forget to understand your budget and spending habits when you reach financial freedom and to protect yourself so that you can maintain your income and assets. Because all that hard work to be financially independent is something you don’t want to lose. Make sure to have an action plan to keep your freedom!