Posted by Tim Stobbs on August 30, 2012
If you have read the book, Free at 45, you might recall the first question I ask the reader in the book is: why do you want to retire? At the time I made the distinction between running away from something (work, stress, etc) or running towards something (new business, helping others, more family time). You need something to aim towards otherwise early retirement may be the wrong choice for you. I’ve come to realize that answer to ‘why’ is actually even more important than I give it credit for.
The answer to why is really your moral compass on your journey to financial independence and the more you understand where you want to end up the more your life can start looking that way right now. You might find that statement somewhat obvious, but it is important to know your ‘why’, since along the path you will have many options and opportunities in your life which you need to judge: am I doing this to get closer to my why answer or is this a financial based decision?
Sometimes that answer is really the same, a new job with more money can also gives you more time with your family. Then there are those difficult split decisions where its more money, but requires more time away from my family. Are you willing to do that to get closer to financial independence if it takes you further away from your why answer?
In life I think we would all prefer the answer to be ‘keep to the why’ and forgot about the money. Yet what if you only had to do it for a few years, would that change the answer? Would two year of sacrifice be worth another year of freedom? If so, how about three to one ratio? Or what if the work was very interesting to you on a personal level? There isn’t a right answer to these questions, but rather your answers to them.
In the end we all have to find our own moral compass that lets us pick and choose how we sell our time now and in the future. Just keep in mind, the relative value of these times are not equal. An hour at age 30 is not the same as an hour at age 70 and some days an extra hour would be worth $10,000 to you (that perfect Sunday afternoon) and others only $1 (filing at home). Choose your times by your why answer and you will rarely regret them, but if you always choose the money you may find yourself going down a dark path that you regret.
It is possible to lose your way on this path to freedom, sometimes we get so obsessed with cutting expense we cut too much. We forget you need to spend some money on the joy of today as well. This is well known, just don’t forget about the other side of earning the money too. You can’t have it all, but you can keep it in balance, just ask yourself: tell me why again.