The Why of FI

Podcast Mar 05, 2020

One of the first things you hear about when you start learning about budgeting is a movement of intense savers called FIRE. Some of these people will save 90% of their income with the goal of retiring in 10 years. That kind of lifestyle is definitely not for everyone, and I think you would have to enjoy the journey to go that extreme.

FIRE means Financial Independence, Retire Early. In this day and age, there seem to be two camps of people. In one camp, we have people who believe in saving for retirement, and in the other camp, we have people who think retiring is out of reach and are fine working for the rest of their life.

Whether or not you believe in retirement, I believe reaching for Financial Independence is a good goal to have. The future is indeterminate, meaning we have no way of knowing what life will be life in 10+ years from now. Maybe some of us don’t even know what our lives will be like in 1 year.

Another question that helps us frame the intrigue of Financial Independence is, “What would you do if all of your living expenses were covered?”. This question helps us think about what we are passionate about. Many times our passions can lead to businesses that still earn money — other times it can lead us to support causes that we care about, appreciating a simpler lifestyle, or traveling the world.

Here are some reasons why you might start saving to be financially independent:

  1. Quit working a job you are not enjoying
  2. Quit working due to your health/age
  3. Peace of mind
  4. Plan for future generations
  5. Prepare for the worst
  6. Take care of your parents
  7. Focus on your health
  8. Create art
  9. Travel
  10. Spend more time with loved ones
  11. Spend more time on things that matter to you
  12. Flexibility of schedule
  13. Bake or cook more
  14. Move to a destination
  15. Rescue animals
  16. Research fields of interest
  17. Learn a new subject or skill
  18. Live a different lifestyle
  19. Be more active
  20. Do ministry

Many of these reasons to pursue Financial Independence are things that you should not wait until you are financially independent to begin. But with the additional time and freedom that FI provides, you can deepen your passions and ability to find those.

How to find your why

Here are 4 extremely deep questions, in this article from Forbes, that can help frame your purpose in life. Many people might have n

  1. What makes you come alive?

2. What are your innate strengths?

3. Where do you add the greatest value?

4. How will you measure your life?

If you’d like to hear Derek and I share our answers to these questions, we discussed them on our Podcast #4: http://podcast.budgets.money/872383/2927329-the-why-of-fi

Also, I haven’t read his books yet, but Simon Sinek has a lot of good content of purpose and finding your why. I have them on my audible wish list!

Start With Why | Simon Sinek
In 2009, Simon Sinek started a movement to help people become more inspired at work, and in turn inspire their colleagues and customers. Since then, millions have been touched by the power of his…
Find Your Why | Simon Sinek
With Start With Why, Simon started a movement to inspire people to do the things that inspire them. Millions of people now understand the concept of the Golden Circle. Find Your Why is designed to…

If you are just now beginning your new financial journey, here are the first steps that are universally agreed upon and essential to starting strong.

1. Save $1000 dollars for an emergency.

Like a real emergency. Not for the time you need some money to get drinks with friends, but for the time your car breaks down and you have an unexpected expense that needs to be addressed quickly.

2. Get out of debt.

Credit card debt, student loans, whatever your debt is, tackle them headfirst. There are a few strategies (typically called SnowBall or Avalanche), but it doesn’t really matter your strategy as long as you are committed to your plan.

Do steps 1 and 2 as quickly as possible. Some of the more extreme FIRE members would suggest that you live on the bare minimum during this time. Eat at home for every meal, cut out all of the extraneous expenses in your life so that you can get back to positive as quickly as possible. Having $1000 in savings helps mentally and practically. Just knowing you have that safety net in case something happens will help you push forward with your next steps financially. Getting out of debt is one of the best financial moves you can make, because not only does debt take away from your monthly cash flow but the interest adds up and destroys any financial momentum.

3. Build a lifestyle that lives within your means

Too many people have lifestyles that do not let them save. According to this CNBC article, nearly 1 in 3 American workers run out of cash before payday across all income levels. It doesn’t matter how much you earn, your lifestyle tends to creep higher what allows for saving. Knowing your Why of FI will help you build a lifestyle of balance so that you can start reaching for your goals.

Next Steps

Here are a few other great resources to get you started on your financial journey:

Home
Everyday Courage Season 2 is here! If you, a family member, or a friend want to be good with money, check out Season 2 of Everyday Courage. You’ll learn the basics that typically overwhelm people, such as investing, budgeting, index funds, and how to increase your savings rate. Listen Now Crack the …
Successfully Simple Sisters - Simple Frugality and Finances
We help women become better versions of themselves. Learn how to thrive in your career, your home, and your faith with resources, money-saving tips, bullet journal ideas, family guides, and more!

https://www.biggerpockets.com/moneyshow

Mr. Money Mustache
Early Retirement through Badassity

Also, if you’re looking for a tool to help you budget. Check out our app at https://budgets.money.

Jake Ruesink

Jake is a developer with a degree from Texas A&M in Business, Comm, and Creative Studies. His dream is to lead a company that builds community and provides a needed service for the glory of Jesus.

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