Financial independence (F.I.) is when you have accumulated so much wealth or resources that you are no longer dependent on your job for money. While some people may feel like financial independence is an unrealistic pipe dream, I’d argue that its possible for many of us and definitely something we should all strive for. Here’s why we should all care about and choose F.I.:
1. It can decrease [financial] stress in your life. Although money can’t “buy happiness” a certain baseline level of resources can certainly decrease stress. Many Americans live paycheck-to-paycheck and barely have enough money to cover all of their monthly expenses. Others of us may be a bit more financially stable but still wonder how we will repay all of our student loan debt, afford rising health care expenses, or fully fund our retirement. These worries can cause stress and decrease the quality of our lives. Saving money from our main jobs, investing in appreciating assets, and establishing multiple streams of income can help ease this worry. It allows us to become less dependent on each paycheck and establish the financial independence that decreases these financial stressors.
2. It gives you more control over your life. Another perk of being financially independent is the ability to have more freedom in your life. When money is not the main objective, you can be more selective with the jobs you take and the work you do. You no longer have to feel burdened by the need to work a decent-paying job that you don’t like. You now have the freedom to select work that fulfills you, regardless of how much it pays. You can also have more control over your daily schedule and more autonomy with your work commitments. When you are able to work a job that you actually enjoy, one that fulfills you and allows you to contribute to society in a meaningful way, you also create more happiness that can have a lasting effect. Establishing financial independence can help make this a reality.
3. It lets you have more meaningful experiences with the people you love. One of the benefits of having your finances in order with a fully funded retirement account and little dependency on your next paycheck, is being able to enjoy your wealth. Although buying possessions and having more “stuff” can bring us temporary pleasure, lasting happiness often comes from spending quality time and having meaningful experiences with the people we love. Think about how happy you could be if you could travel to anywhere in the world with the people closest to you. Or, if you could do the thing you like most around the people you love most. Having the ability to spend more time with your children, go to work each day doing what you enjoy, visit your family and friends frequently, relax often, or travel the world can result in more sustainable levels of happiness and increase the overall joy we have in our lives.
4. It gives you the chance to have a bigger impact in the world. Although you don’t need money to make a difference, having money allows you to make a bigger impact and do so in a way that doesn’t jeopardize your own well-being. When you no longer have to make the choice between helping your family members and paying your own bills, its much easier to help others. When you no longer have to choose between financing your children’s education and contributing to charity, it much easier to give. When your financial matters are taken care of and you are less dependent on your paycheck, it becomes a lot easier to contribute to others and oftentimes you can give to even more causes, organizations, and people than before. Having the ability to improve lives and outcomes can drastically increase your own life satisfaction and create an inner peace and happiness that lasts longer than you can imagine.