I once read a great post on the site “Wait but Why” that illustrates how finite our lives really are by displaying our lives in years/months/weeks. Here is the post for your reference: https://waitbutwhy.com/2014/05/life-weeks.html.
This helped shape my view on how to go about approaching financial independence.
First let’s talk about the two extremes:
- Work very hard and save aggressively to hit financial independence as soon as possible
- I’ve read about some people in the financial independence community that were so focused on hitting a specific networth / financial independence number quickly, they worked and saved to the point where they deprived themselves of any day-to-day enjoyment – which led to depression in some cases.
- Spend aggressively since You Only Live Once, “YOLO”
- It may be fun in the moment but this could mean a lifetime of working to fund the spending.
I decided that a balanced approach fit my life and values best and that I wanted to spend my time on things that were most important to me. For this, I think about my life in four main categories – Health, Wealth, Love, and Happiness. This is what the breakdown looks like:
If my life were a table, these would be the four legs. If one leg breaks, the table falls over. To make sure that my table / life doesn’t fall over, I set goals based on these categories and track my progress to ensure that I am maintaining balance in my life. If I were just to focus on the accumulation of wealth at the detriment of my health, love, and happiness, what would be the point? Life needs to be more than working for the weekends. You need to consciously set aside time for the big things in your life that are important to you. I hear so many people say that they are “too busy” for this or that. The truth is, if something is important, you can make time for it. Let’s run some quick numbers on this:
- Let’s say you work 40 hours a week
- It takes 1 hour a day to commute to and from work
- It takes 1 hour a day to get ready for work
- You sleep 8 hours a night
Sounds pretty jammed right? Probably not much time for yourself?
WRONG – There are 168 hours in a week (24 hours x 7 days)
(-) 56 hours sleeping
(-) 40 hours working
(-) 5 hours commuting
(-) 5 hours getting ready
= 62 hours (that’s enough time to work 1.5 more full time jobs! It works out to be 9 hours a day on average)
Of course there are other things that have to be done throughout the week (e.g. grocery shopping, cooking, cleaning, etc.), but still there is a lot of time left over at the end. I would encourage everyone to think about what is most important to them and prioritize the most important activities. Put them in your calendar if it helps. If you’re like me, this includes things like spending time with friends and family, cycling, walking, playing the piano, and working on a passion project.
One time saving tip is to look for synergies. A “synergy” is an interaction or cooperation giving rise to a whole that is greater than the sum of its parts. What this means in practice is finding ways to increase your time efficiency by combining activities. For me, an example of this would be going for a bike ride with a friend. This covers health (exercise), love (time with friends), and happiness (doing something I love, cycling). If we talk about work/investing/entrepreneurship along the way we can even cover off my fourth category (wealth)!
So for those of you who are pursuing financial independence, try your best to balance working and saving aggressively with spending time and money on things that are important to you – this will allow you to enjoy the journey much more. I personally prefer to have a slightly longer journey to FI if it involves a much more enjoyable ride.