The Financial Independence (FI) movement can appear to be very US centric, having the largest community and most prominent bloggers and podcasters. The terminology used, retirement vehicles highlighted and strategies suggested are, not surprisingly, typically those available in America.
As an expat living in the US, but likely to be moving on next year, I’ve been conscious and interested in the broader international approach to Financial Independence.
What works in one country may not necessarily work in another one. Where you live can have a big impact on the approach you take and strategies you employ to save effectively, minimize tax, invest and build assets.
So what are the universal themes applicable wherever you live? What are some of the key differences to think about and consider when developing your plan of attack to reach Financial Independence?
Work was tough last week – long hours, lots of pressure and an unsatisfactory discussion with my boss about the future of my role. It reaffirmed for me one of the key reasons that I’m pursuing financial indepence (FILLS) – to be free from the golden handcuffs of work (or at least this job) and have choices around how I spend my time. To live a life of purpose, meaning and joy without the burden and daily grind of paid work. To have the mental space to be present with my family at night, instead of responding to emails. The chance to pursue my dreams and ambitions rather than those of my corporate masters.
Regardless of whether you love, hate or are ambivalent about work, removing your reliance on a paycheck is both liberating and prudent.
Over the last 12 months I’ve been obsessed with the concept of financial independence (FI). Essentially FI allows you to design a life you want without taking money into consideration. For me, embedded in the goal of FI are concepts of freedom, self-reliance, optimism and the sense of endless future possibilities. At its essence, the path to FI is relatively simple – spend less, save more, and optimize the difference. I’ve realized though, it isn’t all about money.
I’m a regular listener of the Choose FI podcast and a question they ask their guests each week is “What is your biggest financial mistake?”. This got me reflecting on my own life and, guess what – I’ve made quite a few!
I didn’t think we were “bad with money’, because we have always had a pretty good grip on the small stuff like managing day to day budgeting, avoiding credit card debt and saving regularly.
However we have made some pretty stupid decisions regarding the bigger material expenses. Needless to say these have been more impactful and damaging to our finances than, say, buying lunch at work each day.
I’ve read and listened to an enormous amount of material on personal finance and the FIRE movement over the past 12 months. As a result, I now have new role models, frames of reference, case studies and solid advice highlighting a better, more sustainable way forward.
Of cours,e it is easy in hindsight to say I would have done things differently. Instead of beating myself up about all the things we did “wrong”, I’m instead celebrating that I’m now more informed. Knowing what I know now, I wouldn’t make some of the same decisions. Hopefully sharing my big errors helps you avoid similar mistakes.
Do you ever have the feel like you’re being pulled in multiple directions, overworked and stressed, never have enough time or are constantly worrying about money? Me too.
Somewhat paradoxically “less” may be the secret to getting back control over your life. Focusing on the essentials, being more selective about what we do, minimizing the stuff we strive to obtain and consume, spending time with the people that matter. Living a life with less allows us to focus on what really matters. Cutting out the crap, the unnecessary and the toxic, is key to making this philosophy work.
We have only just started on our journey towards financial independence (see my previous post for a quick overview of FIRE) so we haven’t yet built good and lasting habits or found a sustainable level when it comes to balancing saving and spending.
Reflecting on last month it feels like we often took one step forward and two steps back. It’s been a struggle at times. It’s also been exciting as we saw the impact of our decisions.
Overall though I think we made great progress in April and are off to a great start.
Moved to a smaller home, which will hopefully cost less to heat, cool and maintain
Changed banks and received a $500 signup bonus in the process
Cancelled our cable subscription and home phone line
Reviewed our auto insurance, changed insurers and saved ~50% in the process
As a result of lowering our expenses we’ve now set a new baseline for living costs and will be able to save more each month going forward. The pleasing thing is that we’ve stopped drifting through life and now are much more intentional about our finances.