Financial Independence: My Top 12 Reasons Why

What most of the things I’ve wanted to do professionally, at various times in my life, have had in common is that they didn’t come with high salaries. I used to joke that my dream careers all paid mostly in warm, fuzzy feelings – the kind you get when you do something that positively impacts people’s lives.

At that time, I believed I had two options
1) learn to live minimally, well below my idealist career income
2) be miserable, but make plenty of money

Had I known there was a third option
3) financial independence
I would’ve made very different choices…

Financial Independence (FI) refers to the ability to support one’s current/desired lifestyle indefinitely without earning income.

My Realization

I can pinpoint the day I decided I wanted to be financially independent. My husband and I were on a month-long excursion out west. We were staying on top of our vehicle, in a rooftop tent.

Our intention was to see as many of the National Parks as we could. We visited the Petrified Forest in Arizona, Joshua Tree and Sequoia in California, Zion in Utah, and the Great Sand Dunes in Colorado – just to name a few. It was amazing!

Side Note:
Although pictures truly don’t do these sites justice,
you can check out my dog Rhea’s Insta for some of the highlights!

One day, while immersed in, inspired by, and in awe of the natural beauty, we decided we’d need to retire early if we ever hoped to even come close to seeing the places on our “Travel To” list while still alive and healthy.

Many people seek to retire with barely enough money to maintain their current lifestyle. Others simply survive on less than they’re currently making, for the remainder of their lives.

We wanted to graduate into retirement, to get to a place where our wealth would continue to grow – to support our needs, wants, and bucket list items without draining what we plan to leave behind for our heirs and favorite charities.

How Does One Achieve Financial Independence?

There are two paths to financial independence:

Create passive income streams to replace your cash flow needs.
Save enough to live within a fraction of your portfolio (3-4%).

*I highly recommend #2

But, financial independence was a lofty goal, we were going to have to get serious about saving. To have the truckload of motivation and discipline necessary to preference our future selves over the many, many shiny things we come across each and every day, we’d need to have a clear understanding of the value of focusing on our financial freedom.

So, without further ado, here it is… my ever-growing “Why FI” list:

1. To Avoid Becoming a Burden on Loved Ones

What concerns me most about “spend down” plans is that if they’re miscalculated, your loved ones could end up having to support you. The idea of taking from those I hope to help at the end of my life is horrifying. Especially given that being generous through my estate is one of my primary long-term financial goals.

2. To Avoid Financial Dependence

In worst case scenarios, financial dependence leaves people vulnerable, which is why it’s considered a risk factor for various forms of relationship abuse.

While watching a video recently, I learned that Arnold Schwarzenegger was financially independent before he started acting. Men’s Journal shared this quote from his interview with CNBC:

That was my intention, because I saw over the years, the people that worked out in the gym and that I met in the acting classes, they were all very vulnerable because they didn’t have any money, and they had to take anything that was offered to them because that was their living.

To avoid ever being in that position, he invested in real estate. Like Arnold, I don’t want to feel pressured to do things I prefer not to, due to financial need.

3. The “Have a Nice Life” Fund

Once you’ve achieved a certain level of financial independence, you can walk away from an unhealthy work environment or toxic relationship.

Aside from leaving, you’re in a better position to ask for time off, a sabbatical, or a promotion. You can avoid situations that cause inner turmoil and delegate tasks that have become drudgery.

Knowing you have a plan, an emergency fund, cushion, sinking funds, and rapidly growing net worth puts you in a great position to ask, negotiate, or (if appropriate) insist.

Being able to go your own way has benefits, whether or not you ever choose to.

4. Greater Flexibility

Are you tired of missing out on life’s opportunities?

Do you wish you could drop what you’re doing to go to that fabulous (insert event here) you just heard about? Me too! Fun fact – I write children’s books. Occasionally I get a last minute offer to travel somewhere wonderful for an author event.

Choice is the true heart of Financial Independence. It’s not about the money. It’s about the choice of where you direct your most precious resources: your time, your attention and your life.
Vicki Robin
Your Money or Your Life:
9 Steps to Transform Your Relationship with Money and Achieve Financial Independence

5. TO Chase Your Passions

Financial independence allows you to do part-time work, accept jobs that pay peanuts, take on pro bono projects, volunteer, or spend more time on hobbies.

This is a big one for me! Financial stability is the reason I was able to have my own business, to become an entrepreneur. It’s given me the safety net I needed, professionally, to take chances and follow my dreams.

6. Spend more time with Loved Ones

As hard as I try to keep it clear, my calendar fills up and, consequently, I don’t get to spend as much time with my (adult) children as I would like. I’d love to travel to see distant family members more frequently. Heck, I wish I could spend more time hanging out with friends who live right down the road…

7. Continue to Learn Throughout Life

Once you have enough saved, you can work part-time while going to school or stop working completely to further your education. This may help you advance, or allow you to change careers.

Of course, when you’re completely financially independent, you can start knocking off that list of things you would learn if you had the time and money. I’d love to take some cooking classes, play the violin (guitar, harp), speak Spanish (Italian, Japanese), sit in a tomb reading hieroglyphics, sing in a way that’s more pleasant to the ear, and be cleared to jump out of a plane without someone strapped to my back – just to name a few.

8. Health & Wellness

My husband and I want to be as healthy as we can, for as long as possible. A key component of that goal is eating home cooked, nutritious food.

Additionally, I’d like to get 8 hours of uninterrupted sleep every night and wake up without an alarm each morning. If you’re debating the importance of the second part of that, I encourage you to read Why We Sleep: Unlocking the Power of Sleep and Dreams by Matthew Walker.

We work out almost everyday. We even go to the gym on days when we’re doing something active later (like paddle boarding, cycling, or hiking).

Staying healthy takes time and money. This is fine with us, since we see health as a crucial, non-negotiable expense. For us, there is an inseparable link between food, fitness, and finance. We’ll have to have all three to design our ideal future.

Financial independence just isn’t as appealing if we won’t be healthy enough for long enough to enjoy it. And, as they say, if you don’t pay the grocer then you will pay the doctor.

9. Mental Health & Happiness

Money is a leading cause of stress, anxiety, and marital discord:

In an interview, Audrey Hamilton said “Stress can negatively affect health and even contribute to chronic health problems such as diabetes and heart disease.”
Duke published an article indicating that 53% of respondents in a study “lie awake at night with worry” over money.
According to the Jimenez Law Firm, financial issues are a contributing factor in 20-40% of all divorces.

10. Be Ready for ANything Short of A Zombie APOCALYPSE

If the recent past has taught me anything, it’s that things you never expected or saw coming, which are far beyond your control, can happen.

“There are about eight billion people on this planet.
So if an event has a one-in-a-million chance of occurring every day, it should happen to eight thousand people a day, or 2.9 million times a year, and maybe a quarter of a billion times during your lifetime […] the odds that something bad will happen next year – or any year – are… not bad.”
Morgan Housel
Same as Ever: A Guide to What Never Changes

Building wealth gives people the ability to weather any storm. I want to be ready for anything short of total economic collapse. Don’t worry, I can sharpen my apocalyptic skill set with all the extra time I’ll have!

11. Solve The 120 Issue

I used to do an activity, in one of my workshops, where participants would look at how much time they have left to build up enough money to support their expected non-earning years. It wasn’t uncommon for the duration to be about the same, or for people to have fewer working than non-working years ahead.

When I asked how they felt about their current strategies, given the time horizon, most responded, “I need to start saving more!” One person said, “I need to consider a shorter lifespan.” I’m pretty sure he was joking.

One day, not too long ago, I read a post on social media that asked, “Would you have enough money to make it to 120?” I want to be able to say, definitively, “Yes!”

The truth is, we could live much longer than we’re expecting or prepared to. I’m baffled by the medical advancements that have occurred during my lifetime, and have no doubt that there are more breakthroughs ahead.

On the other hand, no matter how long we live:

12. Life is too short!

I know this sounds like the opposite of what I just said, but I stand by it.

We never know how many days we have left. Truth be told, whether you live for another week, or another 100 years, it probably won’t be long enough.

Time is our most precious resource. You can’t stop it, slow it down, or turn it back. If you spend it wisely, as with investments, the returns will compound.

Being rich is having money. Being wealthy is having time.
Margaret Bonanno

I’ve seen too many people struggling at the end of the accumulation phase of FI. They’re hesitant to say, “I have enough.” Some worry that they don’t have the money to fend off inflation, or to reach all of their financial goals.

Financial fears leave them unwilling to take the leap into retirement. Quite a few become stuck in the, “if I work one more year, I could live better” cycle.

I always wonder if they’ve fully accounted for the time and quality of life factors.

What if they save for one more year and their health doesn’t last?
Is the additional money worth leaving one of the invaluable years we have left in the work column?

When I meet someone wrestling with this decision, I usually say, “Congratulations!”

Why? Because it’s a privilege to be in a place where you can have that debate with yourself. It’s an indicator that you followed through on your commitment to save and invest.

When people are wondering whether or not they can retire, more often than not, they already have more than they need. What’s holding them back is fear of the unknown, fear of change, or just the desire for a little external validation.