Financial Independence (FI), also called Financial Freedom (FF), is when you have enough combined wealth and cash flow to support your lifestyle and financial needs without having to work or rely on others for financial support.
While that was quite a mouthful, it pretty much sums it up.
If that's WHAT FI is... WHY FI?
You might pursue FI for a variety of reasons, including the freedom to make choices about how to spend your time and the peace of mind that comes with not having to worry about financial insecurity. There are DOZENS … but here are my own ten tantalizing WHYs for FI:
Quit your J-O-B: FI allows you to retire earlier than you might have otherwise, giving you the opportunity to pursue other interests or simply relax and enjoy your later (and younger) years. When I left my last corporate job, I was thrilled beyond belief to be able to take a sabbatical to unwind without the pressure to jump right into the next one.
Pursue a passion career: With FI, you gain the freedom to choose a career that aligns with your passions and interests, rather than simply choosing a job for financial reasons. If you don’t need to chase the almighty paycheck, a world of opportunity unfolds. This could include starting your own business, with the safety net FI offers. For me - I'm committed to evangelizing financial freedom so more can enjoy it.
Get that Ph.D in Underwater Basketweaving: FI secures the resources to pursue additional education or training, which can lead to new careers, career advancement and higher income (if you want it) - or just an incredibly rewarding hobby or pastime. Personally, I'd love to go to culinary school, though I doubt I'll work in hospitality.
Weather the storm: FI can provide a cushion to handle unexpected expenses, such as medical bills or car repairs. As a side note, make sure you prioritize having an emergency fund while on the path to FI - not just as part of its destination. Late in 2022 we got hit with ~$5,500 in unexpected car expenses across three vehicles. While it annoyed me immensely, it did not affect our daily lives.
See the world: FI can give you and your family the opportunity to travel and explore new places, both within your own country and abroad. In addition to funding the adventures, without a J-O-B, you don’t need to worry about taking time off work. Your schedule is yours.
Improved relationships: FI can reduce the financial strain that can cause conflict within a family or between partners. A quick Google search indicates that fights, stress, and conflict over money is the number 2 reason marriages fail.
Live healthier and longer: FI can provide the time and money to invest in your own health and well-being, from fitness classes to regular massages to organic eating. On the more extreme end, better access to specialists and out-of-pocket medical disgnostics (not otherwise covered by insurance) could save and extend your life. After dealing with breast cancer in 2022, I'm all about extra diagnostics.
Leave a Legacy: Set-up the next generation for financial success. Lock in the college funds so your children are unburdened at the start of their careers with student loan debt, while teaching them how to achieve their own financial freedom. Ensure they are able to handle any future inheritances they may receive and be able to manage it.
Give to others: FI can provide the resources to help others, whether through charitable donations, freedom over your schedule to accommodate volunteering your time, or simply being able to support loved ones financially.
Greater freedom and control over your life: Finally, FI allows you to make choices about how you spend your time and resources, and opening up new doors and possibilities that may not have been available otherwise. You can spend this one precious life doing what you want, hopefully with the people you want to do it with. You do NOT need to stay in a job you dislike, doing work that doesn’t inspire you. When you control your money, it loses its control over you.
Ultimately, FI can provide a sense of control and stability in your life and can help you and yours achieve your long-term goals and dreams. What's YOUR Why for FI? Have I missed any big ones?
Stephanie Brooke Lennon is the author of Family Bank Blueprint, GoldQuest, and What Would Water Do? Simple Strategies for Navigating Life's Obstacles. Her titles are available in Paperback and Kindle on Amazon.com. Follow Stephanie Brooke on Facebook, Instagram, TikTok, YouTube, Twitter, Amazon, and at BrookeLennon.com.