This article was written by Jennifer Mah, ChooseFI Community Manager, ChooseFI San Diego Group Admin and Financial Coach, Your Money, Your Life Financial Coaching
Jen Mah will be speaking at Opportunity Summit 2020 and discussing how it’s possible for everyone to reach financial independence—no financial products, super high paying jobs or moves out of San Diego County required. She’ll be exploring ways to invest, what financial independence means to you at any age and how teaching young people earlier on in life about money creates opportunity and sets them up for success.
The (old) American dream
Is the American Dream portrayed in movies, TV, books, and other pop culture mediums still the ultimate goal?
Surrounded by images of houses, white picket fences, new cars and trendy clothes, it’s easy to believe that these are the markers of success and happiness—the signs that we’ve made it to the middle class or an even higher socio-economic status. But how do most of us achieve it?
Well, if you’re like me, it meant 40+ hour work weeks, stress and some “normal” debt like a mortgage, car loan and credit card balance. It meant keeping up with the Joneses. It meant that with every promotion or raise, I could buy a little more of the American Dream.
It also meant that I would work until I was 67 or 70 and retire—if I were lucky—or more likely, work until I died. After all, the retirement calculators indicated that I needed millions to have a successful retirement. That seemed like an unobtainable goal.
My old version of the American Dream came with financial stress and a side of despair.
Enter Financial Independence
My new American Dream is financial independence (FI) and you don’t have to reach FI to start realizing the benefits.
What is financial independence? My definition: having enough money to cover my living expenses so that I can leverage my time without consideration of monetary compensation.
Have I reached it? No.
Am I much happier on the path to this American Dream than the last one? Definitely.
Benefits of FI
While I haven’t reached financial independence yet, I have experienced benefits from this pursuit already.
In 2018, when my department was outsourced and my position eliminated, I was more concerned with the wellbeing of my direct report than my own. I had financial reserves that could sustain me while I searched for new meaningful work. I wasn’t sure my former employee had an emergency fund. I was stress free. I could advocate for my employee.
During the federal furlough in December 2018 through January 2019, I watched some friends worry about paying their mortgage or rent and other bills. They were stressed and concerned if the shutdown would last months. Quite a few of them put their living expenses on credit cards. Eventually, it turned out okay—they returned to work and the government paid the back pay, but it wasn’t without stress.
In 2019, I resigned from a job that was not a good fit and decided to pivot and explore entrepreneurship. This would not have been possible if I hadn’t acquired financial literacy and decided to pursue FI.
Through my knowledge of personal finance and my FI journey, I developed financial resilience, the ability to identify opportunities and options, and the confidence and ability to seize them.
FI and you
Let me walk you through a few of these questions as a thought exercise, then consider how it’d feel to remove all the stress and uneasiness these situations drum up. That’s what my path to FI has offered me.
- What would you do if your car died or needed $1,500 of repairs?
- What if your job was eliminated or your employer couldn’t pay you?
- What if your work place and management team were toxic? Would you feel trapped?
- What if your marriage or domestic partnership ended?
- Do you feel trapped by your lifestyle? By monthly payments?
You were born to do more than work and pay bills.
Path to FI
The tenets of FI are pretty simple: Earn more. Spend less. Invest. Enjoy the journey.
FI is simple, but it’s not easy. It requires self-examination, breaking the taboo of money talk, being willing to experiment and think a little differently, defer immediate gratification and not be swayed by what your friends and family think.
To quote my friend and anonymous blogger, Military Dollar:
Financial Independence is literally for everyone.
No matter how much you love your job
No matter what you earn
No matter what you want out of life
It’s not the same for everyone, and it’s not easy for everyone.
I’d like to add that if you stick with it, it gets easier. Best of all, you eventually have hope, agency and options.
FI and young adults
What if all young people had access to financial literacy and financial independence education? How might it improve their lives?
From personal experience, I imagine it would give them hope and empower them to seize opportunities. They could weather economic changes (AI, anyone?).
“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese proverb
Let’s plant those seeds of FI knowledge now. I want all of us to have options and opportunities. FI is for everyone—including our community’s young adults.
Isn’t that better than a consumer-driven, Instagram-able life?