Buy Your Freedom First

How would your life change if you woke up tomorrow and were financially independent? It’s the lottery question all over again. Would you do anything differently? What changes would you make in your life? Stop working? Work more? Fish at the beach all day? Coach your kids’ soccer team? Bike across the country? Write a book? Build a house? Travel to Europe without any cares? What would you do?

Most readers will look at their own list and say.. If only. If only I had more time. If only I had less stress. If only I had more shiny things in my driveway. If only I was out of debt. If only I had a better boss. If only.MH900390686

Prioritizing financial independence doesn’t mean you stop your entire life and quit all your goals. Becoming financially independent actually allows you to pursue your dreams even faster! It’s a matter of deciding that freedom is more important than all the other junk that gets in its way.

Who Needs Freedom?
The question you may ask yourself- or at least the question I get asked all the time is: Why buy freedom first? Why not just wait until you are 75 to start living the life you would like. Why not subsist on a chronically margin-less life that never seems to allow you to have quite enough money or time to be happy. Are we supposed to work tons of long hours so we can buy tons of things to impress people we don’t even like? “I don’t need freedom.” If you are dependent on your income to maintain your lifestyle, chances are good you are held captive at least forty hours a week, 52 times a year. Is that really freedom? Sure, we have choices, but we are still locked into a system that limits our availability of choice. And freedom means something different to everyone. The most productive people I know, including those who are already retired, enjoy being productive even when their income is not dependent on it. Being free doesn’t necessarily mean doing nothing, it simply means not being bound to working a job you wish you didn’t for the next forty years.

Freedom may be the position where you can tell your boss “No” when they ask you to work overtime. Freedom may be tucking your kid in every night because you don’t have to work late again. Freedom may mean time to spend two hours exercising everyday and cooking with your friends or spouse most nights. Freedom may be taking a trip to Argentina to learn Spanish or hiking Mount Fuji in Japan. Freedom could be having a beer during lunch and not having to worry about it. Freedom is about choice.

Buying Freedom One Step at a Time
I remember the first time I ever thought about becoming financially independent. I remember being introduced to these “retirement calculators” that said save 10% of your income, invest and magically you can retire when you are 87.5- if you are lucky. The numbers that spewed forth came across as you only need 12 million dollars to retire comfortably by 2067. Great. Well, I’ll start packing away my pennies every day in order to never retire. But then I started looking into it. Buying freedom doesn’t really cost that much, especially if you break it up into small chunks. You don’t have to save millions over night, just a few extra dollars every month. The assumptions were packed with inefficiency. So I started reading everything I could from people like Mr. Money Mustache, Jacob, and Leo. These guys flipped my paradigm and made me reevaluate how this whole process worked.

The simple numbers of buying a day of freedom. If we take MMM’s idea that you can live an efficient, luxurious life on $25,000 a year with no debt and a paid for house, the numbers really start to shrink. For my life, that number should actually be much lower due to the low cost of living in my hometown. At 25k annually, each day a family would spend about $65. And at a 10% return, $650 invested buys you one day of freedom for the rest of your life. If you hate the optimistic math, feel free to use @4% – then $1500 invested buys you one day of freedom. People complain all the time about how they only get one or two weeks paid vacation a year. But $650 will buy you one day of freedom for the rest of your life! In fact, $4,500 invested will buy you one week paid vacation for the rest of your efficiently lived life. Think about that. If you are 30 and live to 90, you are in essence paying $4,500 for 420 paid days of vacation over your life*. How does that expensive car compare now? If you want to get crazy with assumptions, $11 will buy you one day of freedom when you are thirty- how much do you spend on lunch a week? If you are thinking this far ahead you will be so wealthy, *inflation will even be a non-issue.

More Time, Less Money Needed
Every $650 block of investments you purchase buys you another day of freedom for the rest of your life. If you are young, the amount you have to save is quite low. You could spend $600+ dollars a month on a fancy lease or use the same amount to buy a day of freedom for your entire life! What about that super expensive purse or dress? Lots of wealthy people fail to understand this concept, or do not fully understand its implications. People often inflate their life and live incredibly inefficiently, while simultaneously complaining at how busy and tired they are. Take advantage of the fact that America is the best place to grow a money mustache.

Is It Really Worth It?
When you make ‘buying your freedom’ your top priority, it changes your perspective. Not only that, when you focus and attack financial freedom from both ends, the process doesn’t have to take many years. Millions of dollars may seem like an impossible future amount, but buying one day of freedom at a time can help you become financially independent quickly. Focus on winning with small investments often. Every time you contribute to your 401k or invest in a roth- think- I just bought another day of freedom. Windfalls can even buy you a week or more of freedom for the rest of your life.

I want that new car, but I’d rather be free.
I want to take that vacation, but I’d rather be free.
I want a bigger house, but I’d rather be free.

There are a lot of people who will say: I’m too busy to change my life. I don’t want to actually do anything, I’d rather be in bondage until I’m 85. I’m happier being forced to work 80 hours a week for the next 40 years. That is my life. But I hereby give you permission to change to the way you think. Personally, I want to be free because I want to be able to spend as much time as possible with my family and baby girl. Change your perceptions and buy your financial freedom first.

8 thoughts on “Buy Your Freedom First

  1. Some great comparisons and questions in there! I had never thought about it from the buying vacation line of thinking. I would personally be a bit more conservative on my numbers but it was illuminating to think about things from that perspective.

    I would use say 30k with a 4% withdraw, then i need $2884 for every day of vacation (using 5 days a week i need to buy). If i go with 7 days a week then it would only be $2060.

    I have been reading a great book by Tim Keller called “Every Good Endeavor” and trying to reconcile some of my thoughts behind financial independence as a goal and the lack of “fulfillment” that goal itself brings. As you said though it can’t really be a goal unto itself, but rather a means to a greater end.

    • Thanks for the book suggestions, I’ve enjoyed many of Keller’s other books so I’ll be sure to check out Every Good Endeavor.

  2. It took me a bit to understand the concept you’re talking about, but every block of investment buys one of those 365 days each year. Put away 182 blocks, and you’ve purchased half of every year. Put away all 365, and you’ve purchased freedom for every day of every year.

    I’m probably more conservative and will assume it takes me $1500 or so to purchase a day, but the concept is the same regardless.

    • I started to break it down into chucks because the huge number at the end of the retirement rainbow seems so far away. Breaking up makes me feel like every little sacrifice is actually counting toward something. I probably could have explained it a bit more clearly but I’m glad you were able to understand what I was trying to say.

    • I enjoyed this article, but wasn’t quite understanding the concept. Thanks for this clarification. How eye-opening! What a great way to think about those chunks/blocks of investments you’re making!

      • It is a bit tricky and the title it entertainingly elusive. I’m glad you were able to enjoy it!

  3. Great post, poignant. I’d much rather spend my money on my freedom than pm a $600 lease, or a overpriced apartment. Exactly why I started to pour more money into my retirement accounts and taxable brokerage…want less, need less.

    • I’m in the same boat. I’m working towards buying my freedom now but I still have a weak spot for expensive travel. However, in just a few years when we’ve fully saved we’ll have the time and opportunity to travel wherever we would like. I think most people underestimate the power of retirement accounts and consistent savings.