Chapter 1: The Decision to Never Retire

"Are you serious?" That was the response from my girlfriend during an audio chat when I declared that I would never retire. We had envisioned a future where we would travel the globe, leave our corporate jobs by 31, and embrace the life of digital nomads—essentially achieving financial freedom.

As I shared on social media, “The closer I get to financial independence, the less I desire to leave my corporate job,” she quickly messaged me back with concern: “Hey, don’t ruin our plans; you can’t live to work and work to live.”

Her message prompted me to dive into my writing and outline three significant phases of our financial journey, emphasizing that our primary goal should be financial independence rather than early retirement.

Understanding the Phases of Financial Life

In simple terms, there are three main phases in our financial journey:

1. Asset Accumulation and Family Building: This initial phase starts post-education and lasts several years. It’s a transformative period where individuals often transition from being single to becoming parents or homeowners. Changes occur rapidly during this time.
2. Enjoyment Phase: This stage is less challenging financially, as both expenses and income tend to rise. It focuses on developing assets, with the most considerable expense typically related to children's education. This phase continues until one reaches retirement.
3. Retirement and Wealth Transfer: As you approach the end of your active career, retirement becomes a consideration. However, those who achieve financial freedom early may already have left their jobs.

At the time of writing, retirement age is uncertain, and unexpected events can arise. If passive income isn’t established, income may decline drastically, but so will expenses.

The challenge lies in balancing the desire to pass on wealth to future generations while maintaining a safety net for unforeseen costs.

Clarifying Financial Freedom

Many people mistakenly equate financial independence with the ability to stop working or retire by 40. However, true financial freedom encompasses much more than that.

It begins with assessing your current financial standing. Knowing how long you can sustain your lifestyle without income is crucial. This metric defines your financial security and allows for informed decisions, such as launching a business or changing careers.

Financial Freedom Is a Journey

Genuine financial freedom isn’t about reaching a particular milestone; it’s a continuous journey measured in months and years.

My personal definition revolves around how long you could maintain your lifestyle if you ceased working today. Thus, financial freedom is a path filled with incremental achievements. Claims of overnight success in achieving financial freedom often stem from misconceptions.

To gauge your financial freedom, use the following formula:

Financial Freedom = Total Funds Available / Monthly Expenses

For instance, if you have $10,000 and your monthly expenses are $1,000, your financial freedom equates to 10 months.

Knowing how to calculate your financial freedom is essential. A robust financial cushion not only provides peace of mind but also allows you to dedicate more time to family and personal interests.

The Value of Financial Freedom

Having financial freedom is more advantageous than merely possessing wealth, as it grants you the freedom to choose and decide. Here are some key benefits of achieving financial independence:

1. Pursue Your Passions: With financial security, you can focus on projects you truly enjoy without the fear of financial repercussions.
2. Increased Professional Success: When financial concerns are alleviated, creativity and productivity flourish. You can focus on delivering your best work without the weight of potential job loss.
3. Geographic Freedom: Financial independence allows you to relocate for work or lifestyle changes without fear. You gain clarity on your true housing needs.
4. Flexible Vacations: You can take a break whenever you need, enjoying the freedom to disconnect from work.
5. Elimination of Money Worries: With a solid financial foundation, you won’t constantly check your bank balance, as your financial cushion provides stability.
6. Enhanced Enjoyment of Life: The absence of monetary worries allows you to focus on what truly matters, leading to a more fulfilling life.

Conclusion

Ultimately, financial freedom should provide peace of mind concerning your finances. As I explained to my girlfriend, the goal should not be early retirement but rather achieving financial independence.

P.S.: Stay informed by subscribing to my newsletter on Substack for more insights. For free resources on personal finance, calculators, and more, visit the MOAM reader resource page.

Note: This article is intended for informational purposes only and should not be considered as financial or legal advice. Always consult a financial professional before making significant financial decisions.

Chapter 2: Videos on Financial Independence

In the video titled "I Grew My Networth To $665,000 in Just 8 Years!" the speaker shares their journey and strategies to significantly increase their net worth within a relatively short period, emphasizing practical steps towards achieving financial success.

The video "Financial Independence: Retiring Early and Living Your Dreams" discusses the essential principles of achieving financial independence and how it allows individuals to live fulfilling lives aligned with their passions rather than being tied to traditional work structures.