Imagine you are a 30-year old with a degree in French literature and a well-paying job writing code for a new tech startup. No, really! Retirement, as we traditionally think of it, is 35 years away. Saving is for suckers! You’re buying the loft, the 70-inch with surround sound and an Audi Quattro.
Now, fast forward 30 years. We’ve recently been working with a couple who is nearing retirement age and want to know if they have saved enough to do so in a few years. So, we examine if their investment assets will generate enough income throughout their lives to maintain their current standard of living. Our assessment, using their estimates of expenses and our projections of their investments, says they will either have to work longer or scale back their standard of living in retirement.
Think the couple nearing retirement would love to go back in time and have a little talk with their 30-year old selves?
Now, they will be just fine with a little effort and some guidance. But, how awesome would it be if our review determined they can stop working whenever they want? Can you imagine how freeing that would be? Folks, you won the lottery, only it was you who created the payday by creating a plan, saving, and investing for many years that resulted in your financial freedom!
Early in life we’re taught that we should go to college, get a good job, get married, buy a house, adopt a Labrador Retriever, have 2 kids – a girl and a boy – then buy a bigger house, send those pesky kids to college and then, at age 65, it’s time to get the gold watch and move to Florida. There, crossed the finish line! Now, we can finally live!
I challenge you to think of this another way. If money wasn’t an issue, what would you do? Because, that’s what financial freedom allows.
Would you quit your job and do something that really helps you spring from bed each morning? Would you travel the world, or at least take time off each year to travel? Would you start the business you always dreamed of starting? Would you step back to a part-time job and volunteer for an organization you really care about?
To me, money – wealth or accumulated savings – has always meant security and peace of mind. Money to me is not as much about buying more possessions; money is about freedom and options. For instance, having enough money so I can choose what I want to do professionally without worrying so much about what it pays. Is it fun? Does it challenge me? Am I adding value to my employer and helping our clients? I’d like to escape Kentucky for a couple weeks during February and hang out someplace warm, can I? That’s just me, everyone is different.
Spend some time thinking, really thinking, about your personal definition of financial freedom. I think you’ll find saving and investing for your financial freedom dream is a lot easier than simply saving for that undefined retirement way off in the distance.