Achieving Financial Independence is a Long, Grueling Hike.
Financial Independence Can Give You the Freedom You Desire.
Are you stuck in a rut along with the rest of corporate America? Does your routine involve going to work, working hard, coming home exhausted, going to bed, and waking up the next morning to do it all again? Do you wish you had the financial independence to get out of the rat race, mouse wheel, or whatever rodent exercise equipment you want to call it? Because you know that’s the only way you can quit. You need to be able to support yourself without the steady income that a job brings.
There’s a movement that’s been gaining steam among older millennials and even younger ones as well. It’s called F.I.R.E. or Financial Independence / Retire Early. Basically the goal is to reach financial independence, which means you have enough money to live without a regular income from a job. Then you can retire early . . . if you want. I’m on board with the financial independence part, but I’m not sold yet on the retire early part.
But what would financial independence mean to you? Have you ever thought about it? Most of us have dreams we would love to fulfill. Perhaps you would like to help and give to those in need. Most of those dreams can be fulfilled once you reach financial independence.
But the journey to financial independence is like climbing a mountain. It doesn’t happen fast. It’s a slow, long hike. And if you’ve ever done any hiking, I think you’ll agree. There are few pursuits that offer the rewards of mountain top views.
As you might have guessed, one of my hobbies is hiking – usually up a mountain. I’ve learned some lessons while hiking that can apply to our journey towards financial independence and possibly retiring early.
Lesson #1: Before You Start, You need a plan.
When you decide to hike a mountain, the first thing you do is plan. You get a map, and pour over the different routes. Many times debates ensue. That route looks harder. This route is longer. In the end – you choose one. Usually you chose a route that corresponds to your fitness level, fits your allotted amount of time, or takes into account weather considerations.
In preparation we pack a bag also. Some of us start out with different weight packs. For instance, I’ve seen people hiking with close to 60lb packs. I usually hike with a 15-25lb pack (depending on weather and trip length). Those with large packs struggle at times on the trail because of the weight. I’ve seen gear left behind in an effort to lighten the load.
Financially speaking, you need a plan as well. Without it, you will be destined to wander around never getting anywhere. Pick a plan and stick with it.
Most financial advisors will agree: debt can be debilitating to reaching your goal of financial independence. Some of us start out with large amounts of debt (student loans, other debt). Some of us have little debt. Whatever debt you have, research a plan to eliminate it. Just like a large, heavy pack – it will only slow you down. Debt makes you a slave to the lender. You will never be financially independent until you have eliminated all debt.
Your plan should involve minimizing your spending to maximize your saving. The more you can save, the faster you’ll be able to achieve FIRE.
Probably the most linked to resource on this topic was written by Mr Money Mustache. Check it out here.
Lesson #2: “Hike your own hike.”
This is a mantra that is often repeated out on trail. Basically it means, hike at your own pace. Don’t force yourself to hike faster than you are comfortable with. You will only tire yourself out before you reach your destination. Granted, hiking with others can provide camaraderie and encouragement. But remember, you are the only one that will take responsibility for getting you to the top.
Usually there are several routes up one mountain. When hiking, you pick a trail and stick to it all the way to the top. You can’t switch trails halfway up. And just because someone else hiked a different trail to the top, it doesn’t invalidate their accomplishment. Hike your own hike.
On the journey to financial independence, we also need to “hike our own hike.” We are all on a different path, or perhaps on different points on the same path. Don’t compare yourself with others (otherwise known as keeping up with the Joneses). Hike your own hike.
Remember, there are also several paths to financial independence. My wife and I have chosen to not use credit cards. We have a sizeable emergency fund. We are paying off our mortgage instead of investing heavily. This path is one that others have taken with success. But I realize it’s not the only one. Others have used credit responsibly. A few have windfalls: inheritances, won the lottery (why you won’t win the lottery), or bonuses. Hike your own hike.
It doesn’t necessarily matter if it takes you 10 years or 30 years or even longer to reach financial independence. Realistically, if your income is higher than average, you’ll be able to reach FIRE much faster – if you keep your spending in check.
And if your income is average and possibly below? You can still reach financial independence. You just need to establish some margin in your life, and stick with it. Hike your own hike.
Lesson #3: The journey can be tough; stick with it for the reward at the end.
Once you get out on the trail, it’s not all sunshine and smooth sailing. It usually starts out that way. But soon the easy, flat trail turns to steep, rocky, mountain-goats-only path. It’s hard. And you have to decide if you think it’s worth the trouble.
There’ll be a time somewhere in the middle of the hike where you’ll consider quitting. After-all, you don’t have to do this. Everyone else is sitting at home watching TV or relaxing at home. But the reward at the end is worth it. The views that most will never see. And the feeling of accomplishment.
Stick with it to see that breathtaking vista like the one above at the top of Pike’s Peak.
Once you’ve laid out your plan, you start doing it. Eliminating your debt, saving for retirement, and making smart investment decisions. But it’s not always easy. Just like hiking, it can be a drudgery. While everyone else is seemingly living it up, you’re putting money away for later.
Is the reward of financial independence worth it? Or would you rather be stuck in cycle of work, eat, sleep, for the rest of your life? How bad do you want it?
Embrace the suck. You’ll be stronger and better off because of it. And at the end, you’ll be free!!
I would encourage you: start your journey if you haven’t already. Set some goals and work towards accomplishing them. Start with an emergency fund, and move on to paying down your debt.
Eliminate your wasteful spending, and start saving more!
The rewards of a well-planned and executed hike are views that few ever see and the satisfaction that comes from accomplishing a goal.
The rewards of achieving financial independence are varied. Though I would venture to say that few will see them as well.
For my family, we will be able to give more, perhaps travel, work on our hobbies, or help others in need. These are rewards well worth pursuing. So we’re in pursuit of at least half of the FIRE goal. I enjoy my work too much to retire early. (At least right now. ;-))
Where are you on your financial hike? Do you have a plan for FIRE?
Let me know in the comments, and thanks for reading and sharing.