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We should be Experiencing Financial Freedom before the Wealth Security at the End. Yet Wealth Security is still a worth while Milestone

B from Forever Financial Freedom did a review of his goal of retiring at 35 years old. And it turned out he is not there yet.

His goal is to do it in 10 years, when he was closer to 25-26 years old and if he took stock today, it is somewhere close to midpoint.

Some of the things that was impeding him was the rate of return but also the contribution amount came down over time. His contribution amount is defined as a combination of money from his disposable income and dividend income.

When your Financial Independence Plan hit some Obstacles

Firstly, let us just be clear his plan wasn’t derailed.

It is just that the momentum wasn’t fast enough.

I think its because the actual reality versus what is theoretical can be rather different.

We based on other people’s examples, what we learn from various sources and know that it is possible. And then we work out on our plan for financial independence that is faster than other people.

To deconstruct, we build knowledge of how to do it.

20160306 System to be Successful in making things work

Then we come up with a plan and execute.

You then realize what B is doing is vital in that by reflecting:

  1. he finds out whether his goal is pragmatic still
  2. what are the opportunities to continue to reach the goal
  3. whether new knowledge and realities tell him its not possible

He could do some deeper research to reach the goal.

Your theoretical plan may not work out, but you have to firstly know whether your plan is fundamentally sound, or pragmatic enough. If it is unsound, you probably need to scale it down, conceptualize more with mentors.

It is a good thing his plan is rather sound, and halfway to it, you realize if he stopped today:

  1. his life will be better than it was at 25-26
  2. his financial security is far better than the median amount of people
  3. the wealth build can take him on various directions in life. it is a very useful asset

To me, if its slower, by 2 years, it is NOT end of the world.

Notice that what usually frustrates us is in the head. It is  our perception of the situation. (I don’t think B is frustrated by this btw)

Being Financially Free before the Wealth Security

The emerging Singapore deep fundamental investor SG Thumb Tack Investor made a good comment regarding B’s plan:

Always good to keep track of your returns, and reflect to see where you’re going.

But I’m not so sure about this thing called financial independence.

It’s a moving target. Most people, except for the extreme cases, can be financially independent anytime. Because that depends on your target. When you do have 1 mil, you’d STILL not think of yourself as financially independent. It seems like it now, but you won’t.

That’s a good thing though, because it’s the thought that you aren’t, that ensures you don’t settle. Settling means your life is essentially over.

After-all, what happens when you are “financially independent”? Ride off into the sunset and sip drinks by the beach?

Attractive as that sounds now, life would be awfully boring after a week.

Maybe its not such a bad thing to FEEL like you’re NOT financially independent.

Just my 2 cents worth, and maybe some personal experience mixed in.

The point that makes me think of the most settling means your life is essentially over. For many of us inexperience ones, it becomes an ultimate target.

If you don’t reach it, your new life cannot start.

Took me a while to realize if I think like that, it is stupid.

You really are saying this current life isn’t worth living. And you just switch over to another life. Just like that. Easily in one day.

That is utterly not very possible for many of us.

If we cannot find and improve the way that we live our life BEFORE being financial independence, we probably lack the competency to design and live a fulfilling life after we reach it.

Knowing what is Enough

If we do not aim at financial independence as a goal, should we not chase a hard target at all?

I think the target pulls us towards it, but its good to have various milestones along the way and understand that each milestones can be very fulfilling and functional in itself.

In that way it creates motivation and gives you vigor to continue to pursue it (read how important motivation, determination and grit determines your success in doing things)

My German born friend Andy explained that having enough is not a tangible amount but it is a philosophical concept:

In the western world  and in the top countries in Asia like Singapore material life is pretty much as good as it will get.  There is no point in chasing for more.  From here on we are just bringing our own wasps to the picnic.  It is time to be grateful and say “enough”, mindfully enough.

And a great Brenne Brown Quote:

“Sufficiency isn’t two steps up from poverty or one step short of abundance.  It isn’t a measure of barely enough or more than enough.  Sufficiency isn’t an amount at all.  It is an experience, a context we generate, a declaration, a knowing that there is enough, and that we are enough.”

I reread that a few times and I find that it could mean a few different things.

Ultimately, I found that we create that frustration in our head that we do not have enough to be FI.

There is 2 enough in my world

  1. an enough standard of living
  2. an enough to attain an adequate wealth security, with a few assumptions

The second one may frustrates the hell out of you. And if you are, you might not be financially free in the head.

The Wealth Security in Financial Independence is still worth while

In my sharing with other bloggers, I mentioned in my introduction that retirement have lost much of its luster, and I still stand by that.

Much of this post have identify the problem: Working towards a target and not optimizing current life to be closer to our desired life.

However, the wealth security that comes with prioritizing building wealth is still attractive.

Daniel Radcliffe today reminds us of that again. For those who do not know who he is, he is the lead protagonist in the Harry Potter movie series.

He made good money since he was 11 years old. Well by good I meant almost 92 mil pounds.

Investopedia have a good piece on him. (Hattip to Chris at Grow your Tree of Prosperity)

Why the story appeared in a financial medium is because Daniel reflected he hasn’t spent much of it.

Radcliffe told the Belfast Telegraph in September, “I don’t really do anything with my money.” He added, “I’m very grateful for it, because having money means you don’t have to worry about it, which is a very lovely freedom to have.”

You might think that this is nothing much, but in an era where many people come into sudden wealth and then proceed to de-accumulate it in a very shitty manner, this looks more remarkable.

However, you can see what the wealth security brings:

Having money gives him “immense freedom career-wise,” too: “For all the people who’ve followed my career, I want to give them something to be interested in” – like that horse play – “rather than them just watch me make loads of money on crap films for the rest of my life.”

And it is then I remember seeing him in all these weird theme movies in weird roles.

Stages of financial indepdence

Overtime, I felt that if you look at the Stage 4 Financial Security is much more functional and easier to achieve, gives you the “enough” satisfaction and less frustration than Stage 5 Financial Independence. (read the 7 stages of wealth)

Personally, I am too busy this period to do any of these reviews or thoughts, so do let me know what you think.

Are you motivated to take action to step up the stages of wealth today?

What is your biggest obstacle?

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Wednesday 12th of October 2016

Hi Kyith,

Just thinking out loud - technically motivation can be a 'pull' or 'push'. While FI is not really a pull to climb up the stages of wealth/fi, I guess the fear of not being able to accomplish anything is a push to at least try to go up the stages of wealth.


Wednesday 12th of October 2016

hi Jackson, interesting thoughts. give people achievable milestones and we may have a higher success rate for them to move up. I for one felt the chasm between stage #3 and #4 to be rather wide. people tend to give up there.

Frugal Daddy

Monday 10th of October 2016

Hi Kyith

You can live exactly how you have envisioned your ideal lifestyle after fi, but many variables still depend on the time. By time, I refer more than quantity. Referring to the time that you wish to execute certain activities. Example, enjoy the same food during weekdays lunch wirh discount n no crowd vs eating it by paying 100% more give you different satisfaction. I live my best life now. But it can be better when money is no longer a restriction.... to my freedom


Wednesday 12th of October 2016

ah, thanks for articulating that way. I think that is considered a luxury which is worth chasing for.


Sunday 9th of October 2016

Hi Kyith, Great food for thought that you are sharing there.

Love this one: "If we cannot find and improve the way that we live our life BEFORE being financial independence, we probably lack the competency to design and live a fulfilling life after we reach it."

I think it all boils down to this: Financial Freedom is not determined by the digits in your bank account but by what you think.


Wednesday 12th of October 2016

hi andy,

problem is not many have such an open and unique character to not be frustrated by not achieving the number.

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