The journey for Financial Independence is a marathon. It takes a lot of time before you reach the finish line. It can be quite demotivating not to see the end. While reading blogs and comments on my site, I actually came to realise that there are maybe multiple stages in financial independence.
Some eye openers I had the last few months
DivGuy made a comment on the travel fund post
I see travelling part of FI (if you can travel, you are somewhat free and independent)
. therefore, by travelling, you are “touching” FI for a few moments. Besides, travelling is the biggest riches I find in life.
When looking at our lives like this, we can indeed see what FI could be like. Maybe not yet for the full 365 days per year,but at least already for 30 some days per year. The days that we travel, the weekends aways that we do, the kids free weekends. All of that is just great time that we should enjoy already now.
There could also be an in between FI as suggested sex health money death
Last week I spoke to a friend still in employment who was somewhat surprised to find himself working alongside an old boss who’d taken a voluntary demotion. My friend wasn’t quite sure how to handle it, but I was surprised that this was even a workplace option. It’s one that I now sometimes think I should have explored with my own employer, but I have to say my own prejudices and insecurities might have prevented it.
The key message here for me is that you can reach semi FI earlier in life by taking a step back at work or by switching to other jobs with more freedom. Is this semi FI? Coming close for me. You have less stress that way, are likely to work less on a weekly basis and have less urgency to check emails in weekends and while on holiday.
Eat the financial elephant has a good view as well.
We therefore believe that after covering our basics, it will be far easier and more fun to be creative with earning small incomes or being creative with spending in retirement while living with much more freedom compared to continuing lives that revolve around jobs just to save more money.
The above state is probably 90 pct FI. Do you need more?
How can that be Financially Independent? You would still need to work for the man? Or you still need to work to have ends meet.
At the surface, it does indeed does not make sense. Once you scratch, you will see that semi FI could well be a very good value proposition. How?
Why would that work?
What is FIRE for me?
For me, FI means that I have the freedom to do what I value most. For now this is a combination of
- my family and friends,
- travel
- contributing to successful projects, realising things I can be proud off.
What if by working less (half time) or working in a different sector/position, I could have more time for the family and travel while still realising projects that I value. I do see that as a win-win.
Delayed gratification where I would work hard now to profit after 2029 looks a risky business to me. What if I do not make 2029? What if by then, the kids are too old to want parents that go on a trip with them. Or that they are not used to travel and see the journey as part of the vacation?
Would it be ok to do a step back from the career and savings rate now and delay the FI date under the condition that you get more joy and freedom already now.
What if you jump before reaching the official number? You accept a certain flexibility in spending and are willing to exchange some of your time for money. In return, you feel 100 pct free already.This is what I have in mind now. How about being with the family and travelling while they are having school holidays? I could work the rest of their school time.
As a conclusion, I would say that having a plan in place and being able to enjoy the here and now with family and friends is already the fist step towards Financial Independence. And possibly the most important one.Being able to enjoy these moments means you will know how to enjoy them them later.
These thoughts will have to sink in a little. I am curious how this will impact our road to FI. Where and how could I make this real?
How do you see the journey?
amber tree leaves 
Ciao ATL,
I have not given this topic a serious thought yet, but I guess that for me FI is really about having time for myself NOT traveling (yes you read correctly). Because of my life and work let’s say that I have traveled a lot, so I do not feel the urge to see places, although I love to go with my partner around the world for holidays(they call girlfriends like that when you pass 35 yo… :D).
I haven’t really thought about a target yet too, probably because I still like to work, although I am not prepared to be abused by job owner/bosses like it happened in the past. I guess that this for of thinking is already a “half” FI in a way… At the end of this year I will draw a target for my FI, this was the plan when I started “give it at least 1 full year”.
What is certain is that the target is to have more free time for myself and for my family/friends. To me, now, this is the real freedom I am looking for.
Ciao ciao
Stal
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Totally agree with you.
Travel is obviously fun, but I don’t see it as my first “taste of FI” for few reasons:
– I’m traveling a lot these days, both for work and for personal life (organizing few important events in Italy while living in Switzerland). I’m also planning a 2 weeks trip to Mexico in November with my GF (yes, I still call her my GF even though I’m close to 40 :P) and a couple of friends but I must admit I’m not enthusiastic at all. I won’t be enjoying Switzerland for at least 2 consecutive weekends till mid January. And this is happening since early August. No, sorry, just stop traveling please!
– I hate to travel with a return ticket in hands. Yes, I love to go on open ended vacations. I did it in the past and it’s amazing. Well, not truly open ended… let’s say I switch job and take 2 months between jobs so I go explore the world. 2 month upper bound is awesome and most of the time after 2-3 weeks I feel the urge to go back home and enjoy freedom at home, with my books, games, PCs, friends… While if I go for a 2 week vacation I feel forced and I can’t enjoy the same way.
– I hate to travel TO a specific destination to be a TOURIST. Taking a plane to the other part of the world and staying there, being a tourist, watching things that are there just for tourists. Like I used to mock asian tourists in Rome when they were lining up for hours to visit the Colosseum. Come on, that’s not Rome! I hate to feel like the Japanese lined up guy with an umbrella while spending tons of money to visit “La Sagrada Familia”.
– I do love staycations, exploring my neighborhood, biking, hiking, do daily trips. That’s several times a far better alternative!
Actually, this comment can become a post on its own… 🙂
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A good view on holidays … We have a similar approach. I do not like to queue either.
6 years ago I decided to stop traveling for work as our first kid was on the way
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ATL – another thought provoking post. I’ve been working 31 years, and will achieve 100% FI at Age 55 (2 years from now). I’ve always prioritized big holiday breaks during my working career, and have indeed viewed these as “mini FI” escapes. Now that I’m near the “100%”, I have no regrets. I decided on the “work until you can be 100% FI” approach, but I’ve taken time to enjoy mini-breaks along the way. There are many ways to “skin this cat”, the focus needs to be on being intentional with your decision and living the life that’s right for you!
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An approch I like: make big holidays part of the plan. We are going in that direction now. Even when it means working a few more years. And even then, I do consider taking the 80pct FI road, or even 60 pct FI road.
Agreed with the conclusion: the decision needs to be intentional. That is what makes you free already
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Love this approach Amber Tree Leaves! This makes the concept of (semi-)FI much more attainable.
And it’s true, too. There are many stages of independence, with being totally free from needing to work while still supporting the life of your dreams probably as a summit.
For me it would mean that my basic needs are covered regardless of my ‘big’ job. I wouldn’t mind needing to work a bit, as long as it doesn’t interfere with my travel plans. That way I wouldn’t be too dependent on one employer, a small amount of money can be earned elsewhere.
I’ll save this post to remind me later 🙂
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Thx for your view. I like the idea: have basic needs covered by the 4pct rule or any other source of income and work for the extras. I can see that working for us. Once the mortgage is gone, we have steep decline in our monthly costs.
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Some jobs have very good part time opportunities. My wife is a nurse by training, though staying at home with the kid right now. She has lots of opportunities for some gigs on the side. Once we are retired she will definitely do some of that again.
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Both my wife and I could in the future envision freelance work that is not full time. It could even be on project basis, allowing to some breaks in between. Sounds sweet to me.
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Fully FIRE is hard to achieve. Major savings rate, ultra frugal and also the Dutch tax regulation isn’t very helpful. A real marathon as you mentioned. The semi FiRE approach is a better path for me. Getting mortgage free in a few years and gaining a small/extra income by investments or entrepreneurship feels as a more comfortable journey to me.
Getting rid of the 6 o’clock alarm clock and achieving a much more balanced work versus free time life. I don’t want to work my buts off to retire 10 years earlier, but prefer a better balance in a few years.
The awareness of the FIRE journey, gives you a lead on the rest of the participants in the rat race.
P.S. Please count on me for 15/10.
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Sounds like we are aligned…
I feel more and more the need to shift towards travel experiences.
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Hey Chris,
having tasted semi-Fire (i.e. longer periods of either paid time off or voluntary unemployment, with long defined as in 2+ months) a couple of times now. We do actually believe working our buts off now to become fully financially independent in the future could be worth it. However, we would not mind pushing the deadline of FIRE further down the road if that meant a couple more semi-fire moments (actually planning one in 2018).
Glad to see your interested in the get together in October!
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I totally agree that there are different levels! Mr. Mt offered his job to go part time 2 years ago (they said no), but that was a big step for us. I had already left a job that I hated. If we can live comfortably on 1 part time income, that is awesome. Now we are taking a full year off of work. We did a 6 week road trip, a bunch of fun projects, ect. It’s been awesome to see exactly what our numbers look like without earned income flowing in. The numbers have been very encouraging, but I doubt we would never return to work. Too many things change (especially with 5 kids!) But if one of us works part time every so often, that is an ideal work-life balance for us.
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Your definition of FI is very similar to mine – friends, family, travel, and important projects you have pride in. We are doing this – and when the youngest goes off to college, we’ll switch the projects to ones that are much more flexible. Great post – thought provoking!
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This is a very a touchy subject. I keep telling myself if I work hard now and enjoy life later but that would be sort of wasting my youth. Plus, I may not be alive a few years down the line or will be unable to enjoy the freedom that comes with it. Excellent points amber tree! 🙂
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I definitely feel that there are stages to FI as well.
While I want the option to stop working in 7 years that doesn’t necessarily mean I will stop working. As I get closer to that 7 year mark , the more along the FI spectrum I will become.
I’m looking at my current maternity leave as a taste of being FI. For the next couple of months, I am able to be home with my kids and plan my day the way I want.
It’s so important to enjoy the journey as you make your way toward your goals.
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Hey ATL, is that Mont St Michel as your picture?
What you describe is what we’re aiming for, we’d like to be semi-FI as soon as we can..perhaps where the blog can support us indefinitely and we can do whatever we want whenever we want. We’re a long way from that, but it’s a nice dream 🙂
Tristan
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Mont saint michel indeed! A great place for holiday.
Good luck with your journey. We all have our own destination and way to get there.
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I love it there, I wish I could go again soon. One of my most favourite places in the world. If I had to live in Northern France, I would pick there!
Tristan
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I think I am semi FI :). I can afford to take more holidays than legal norm, I went 2 holidays last years and I still keep my road to FI.
And I think I can afford to have a 4 hours job and to reach the FI at 55 years, without not too much effort (with effort, at 50 years old 😀 ).
I will calculate to put on a clear plan. Yep, I don’t know where I am now, but I am in the good direction 🙂
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Hi abt,
Judging by the expenses from my trip back home, finally reaching FI will be very expensive if it’s anything close to my travelling!
One of the themes in the Your Money or Your Life book is that you should live your values; rather than (say) a higher paid job that you don’t believe in. Although I do think the concept “early retirement” should be banned; it’s a new stage in life; not the beginning of the end.
Best wishes,
-DL
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I believe there are many stages of FI. It depends on life’s goals and how you implement them. I would be a lot farther along in my investing journey if I knew what I know now and would have a lot more dividends coming in.
I am semi retired I just need to find a part time job. Then hopefully still have the flexibility to do a lot of the things I want.
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I consider Mr. F2P and me FI because we can choose to work…or not. We calculate our freedom as follows:
Net worth / yearly expenses = years of FI
Right now, that means we’ve accumulated over 25 years of freedom, not counting the compounding our investments offer, our current average yearly income or the negative impact of inflation on our expenses (it’s a VERY conservative calculation, really given we’re still saving 55% of our yearly income). Given this calculation, and knowing it’s ridiculous to think we won’t make any investment or earned income over the next 25+ years, we genuinely feel we’re FI. It’s this understanding that makes us pursue what we “want to” do as opposed to feeling we “have to” do anything.
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I totally understand where you are coming from! I disagree with bloggers who promote extreme frugality – I agree that saving is important, but so is living! So keep a control on the finances, but eat out and travel and enjoy life, because you never know how much time will be granted to you.
My husband and I have taken to planning a special vacation every year. This year we went to Sri Lanka and next year we will go to the US. It impacts our bank accounts but we have absolutely no regrets – it’s an investment in our quality of life. We have a great time planning the vacation, an even better time looking forward to it and then the bestest time ever when we get there 🙂
So save money and live life, look ahead but enjoy the here and now 🙂
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I think in terms of FI in two ways. First is for me. I really want to have to not worry about the occasional hiccup in life and also to be able to pay the daily expenses. On the flip side I was privileged enough to have school paid for and come out with no debt and I want to be able to do that for my children as it’s what truly can set someone up for success. Thanks for the great article!
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That i what makes personal finance great: it is personal. There are a lot of definitions out there and we can learn from each other.
Right now, I would say I am 25pct FI. only mortgage debt, life happens fund in place and we can make intentional decisions on what/where how we work. We still have to work close to full time
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I think financial independence for me is going to be when my basics are all covered and feel like I am living the quality of life I want. Personally I don’t want to retire, I just want the flexibility to explore what I can be great at and earn money in other ways then a traditional 9-5.
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