Earlier this week I met with a client at their office. Two of my co-workers accompanied me in an effort to grow the relationship between our firms.
After the meeting, my two co-workers and I visited the Starbucks next door. While enjoying overpriced iced coffees (thanks corporate expense account) we debriefed the meeting and shot the breeze. We all agreed the meeting went well and then the conversation transitioned to careers.
My boss, who is a 58 year old male, joined our firm just over a year ago; he started two months before me. Prior to joining our company, he worked for two other companies; both careers lasted 10 years. His new ’10-year plan’ includes staying at our company for a decade and retiring at the ripe age of 68.
The other co-worker is a lady who joined our company a month ago. She is in her late 40s and sees herself working another 20 years. She dragged on for about 5 minutes outlining all of her wonderful accomplishments in her career; she thinks very highly of herself.
Out of the blue, she turned to me and said, “You probably have 40 years left in your career.” The statement completely caught me off guard and… well… honestly scared the living hell out of me. I am 27 and will be 67 in 40 years. No thanks.
I cannot imagine working another 40 years when I am 4 years (or less) away from financial independence. In my mind, the worst case scenario is working another 10 years which means her prediction would be off by 30 years.
Her comments really got me thinking… Why do we choose Financial Independence (FI)? And, how much time does FI save us?
Let’s start with the former… but please stick around for the latter, you are going to like what I have to share (hint: it’s really cool).
Why do we choose FI?
Recently, I posted a poll on twitter asking the twitterverse why we choose FI (see below for results)? The responses were entertaining and enjoyable to read.
Why are you pursing Financial Independence?
Comments welcomed – want as much feedback & data as possible#FI
— GuyonFIRE (@Guyon_FIRE) August 21, 2017
Two poll options received an overwhelming majority of the vote. The options ‘spend more time with family & friends’ and ‘pursue other interests’ combined for 84%.
The common theme with both these options… We value our time and desire flexibility and freedom to do what we enjoy.
I am pretty sure no one on their death bed ever said, “gee, I wish I spent more time working.” – IF they did, I feel sorry for them.
Zero Day Finance provided great feedback:
Definitely more time with family. At the end of the day, it’s all we’ve got
— Zero Day Finance (@zerodayfinance) August 21, 2017
Your Average Dough – enjoys time her family & friends but its more than that. She wants her free time too. Bonus, there is nothing average about her; she runs a great blog.
I said fam & friends but it’s a combo of that and other interests. I want the free time to do what I’d like when I’d like!
— Your Average Dough (@youravgdough) August 22, 2017
Steve from steveonomics – his big bucket list is his motivator. I share this view as well. Many of my bucket list items are on hold as my 9-5 gets in the way.
I’ve got a big bucket list and work seems to get in the way.
— Steve (@Steveonomics) August 22, 2017
We do not choose financial independence because we are lazy or entitled. Some of us do in fact hate our jobs; I am one of them. Plenty of us work jobs we enjoy… just not as much as the freedom on FI.
Choosing financial independence its much more than not wanting to work. Financial independence removes monetary needs from decision makings and allows us to focus on happiness.
Debts to Riches – provided great insight.
I think a common initial misconception is that #FIRE = laziness. In reality most FIRE aspirers just want freedom to pursue other projects.
— Debts to Riches (@debtstoriches) August 21, 2017
If I were to ask – “If you could do anything for the next 8 hours that brings you joy and happiness, what would you do?” – I am almost certain work would not make the list of activities.
Better yet – if you had one last day to live and you could do anything you wanted with unlimited resources at your disposal, what would you do? Something tells me those TPS reports would not make the list.
Value Investor understands the value of short term pain for long term gain. He is willing to put the time in upfront to buy back decades of his life.
In the end we can’t have more time. Working hard now so I can enjoy the time later. pic.twitter.com/U6OyZCFU8A
— Value Investor (@Rogue_Investing) August 22, 2017
Digressing back to time…
Buying Back Time
So… How much time does FI save us? Obviously it’s not just working 20, 30, or 40 years since we all are afforded the *luxury* of nights, weekends and holidays.
According to multiple government reports, the average American work year consists of 2,087 hours. If my co-worker’s assumptions are correct, I have 83,480 hours of work in my future (2,087 x 40 = 83,480)
There are 8,760 hours in a year (24 hours * 365 days = 8,760). Still assuming her assumptions are correct, my career will consume 9 and half full years of my life (83,480 / 8,760 = 9.5 years).
Being trapped on the hamster wheel and wasting away 9 and half years of my life in a cubicle is not an option.
I can think of 100 ways to better spend my time. Volunteering, traveling and time with loved ones are the first three that come to my mind; maybe not in that order.
Time vs. Money
In life there are two limiting factors to most everything, time and money. Money is my second most valuable resource. In modern society money serves as the medium of exchange.
Before there was money, people were stuck bartering for goods. Below is a quick story to demonstrate why having a medium of exchange is beneficial.
Imagine, I am a farmer that grows corn. Now imagine that I have two neighbors, Bob and Tom.
Bob and Tom raise hogs and make shoes, respectively.
Trading with Bob is great. I provide him with three baskets of corn so that he can feed his hogs. In return he provides me with 5lbs of bacon. Who doesn’t love bacon?
One day while walking back from Bob’s house, I noticed the sole of my shoe gave out. Damn – now I need a new pair of shoes.
So, I walked over to Tom’s house hoping to trade some fresh corn for a new pair of shoes.
Tom said, “I do not want your stinkin’ corn. I like bacon and pork chops!”
Well, this sucks…. So I had to go all the way back to Bob’s house to trade corn for bacon. Then go back to Tom’s house to trade bacon for shoes.
BUT, by the time I got back to Tom’s house he no longer wanted bacon.
Tom said, “Bob was over here early to buy his family shoes. I have no need for bacon. Now I want peaches.”
You gotta be kidding me. The only person who grows peaches is three towns over….
See how annoying bartering is? Having a medium of exchange simplifies life. Money saves everyone time and energy.
Finally, there is no shortage of money or limitations to how much money an individual can have. I can make millions, loose it all and make it back again. Heck, there are stories out there of people doing this several times.
Time, however, is the most precious and FINITE resource we have. There is absolutely NO WAY TO GET MORE TIME. If you have a way to make more time (you don’t) please email me; I will make it worth your time.
Introducing the FI Time Saving Calculator
Without further ado, I would like to introduce the FI Time Saving Calculator (also see below).
Let’s assume the average American plans to retire at 67. Some retire earlier than this while others are less fortunate and may need to work past the age of 67. Some are actually crazy enough to WANT to work past age 67 (read more below).
For every decade of retiring early, FI buys you back 20,870 hours. This would be 870 days, or 124 weeks or 2.4 years.
Every year of retiring early provides 12.4 weeks of time that will not be spent in an office or working for the man. This is 1/4 of a year or about 3 FULL MONTHS.
I hope this calculator provides a new way to look at FI and helps you find your why.
This exercise really changed my perspective on FI. My career has never provided enjoyment, purpose or fulfillment. Rather, I am happiest when I am helping others, enjoying nature, spending time with loved ones and exploring the world.
I look forward to reaching FI and buying back my time so that I can pursue what really matters to me in life.
What are your reasons for choosing FI? How much time will FI save you?Did you realize how much time you will buy back through financial independence? Do you know your why and how you will spend your time? Please discuss by leaving a comment.