Who am I, and what is Financial independence?   2 comments

Hello everyone. You can call me Fiby (from the URL). I’m a PhD student in my early twenties, and I want to reach financial independence by the time I’m forty years old. I realize that’s quite a few years away, and I won’t be disappointed if I don’t reach that goal. But I know that I need to make smart decisions now for that to even be a possibility.

Financial independence is being able to never worry about money. Put one way, it’s having the ability to retire if you so desire. Now I don’t think early retirement is for me – in some sense, it opposes the reasons to get a PhD. But from what I hear, there are a significant number of people who love the work they do at their job, but still hate their job because of their boss and/or coworkers. Having the freedom to just walk away from a stressful situation like that is incredibly valuable. Also, I’d love to travel the world. Being retired and traveling year round sounds like a great life.

But is it even possible? I mean, aren’t we supposed to get good grades in school, get a good job, and work until we’re ~60? Well until I found Mr. Money Mustache’s  great blog, I wouldn’t have thought it was possible either.  MMM (Mr. Money Mustache) and his wife retired when they were 30. He goes into more detail in his blog, but long story short, he and his wife graduated college without debt, saved a ton of money (at least 50% of their net income). and invested wisely. During this time, they decided to retire early, and then have a kid (how amazing is that?). The key to all of this isn’t actually their income during their working years. Yes, obviously, how much they earned in their working years is important in saving for retirement. But what’s really important is their spending rate. In 2013, he, his wife, and his eight(?) year old son only spent $25,182 (it is important to note that they own their home, so property tax, utilities, and maintenance cost them $4918, and they also donated $615 to charity). For reference, last year, I spent $24,155 (where $3417 of that is mandatory school fees, $207 was donated to charity, and $11759 is rent, which includes all utilities)

But wait. Doesn’t that mean they’re living like they’re poor?

Nope. They just make smart decisions about how they spend their money. They eat out sparingly (it’s generally not as healthy anyways), don’t watch cable TV, own fuel efficient cars, bike instead of drive as much as possible, etc. And they still have a nice travel budget. He says he lives a fulfilling life, and from the way he describes it, I agree.

And stepping back from his blog, I’d rather spend money on experiences, not things. Things don’t usually make us happy in the long term (unless they enable great experiences – such as buying a nice bike if you enjoy cycling). There is the quickly fading initial excitement of a new purchase. But experiences? Those memories are forever. Experiences such as travel. Having a good time with friends. Making new ones.

So I’ve adopted many of MMM’s views on frugality. But getting the balance between saving and spending is tricky sometimes. Because at the end of the day, saving is just deferred spending. For all I know, I could die tomorrow. If I haven’t enjoyed my life because I set my heart on reaching FI (financial independence) by 40, then I’m not doing it right. I’m not interested in cutting expenses to the point of becoming miserable.

So that’s what this blog will be about: my path to FI, and how you can do it too. I’ve learned a lot in the past year about taxes, investing, credit cards, and travel hacking, and I thought I’d write all these ideas down. I think a lot of the material I will post here will end up being a rehash of things I’ve read on other blogs, but honestly, this blog is also for my sake – I need a place to direct my enthusiasm for all these topics that many people (especially those who are my age) don’t care to talk or learn about. Hopefully you will find this blog useful too.

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Posted January 5, 2015 by Fiby in Uncategorized

2 responses to “Who am I, and what is Financial independence?

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  1. Pingback: Why did I decide to invest? | Financial independence by 40

  2. Pingback: Investment Principles, Part 1 | Financial independence by 40

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