Achieving Financial Independence (FI) is actually a big deal. Once you reach FI, you no longer have to trade your time for money and can do whatever you like, at least in theory. However, many of the people that focus on achieving financial independence do so by adopting a mindset of reaching FI as soon as possible. But what is the right way to achieve FI and is it really worth it?
This is my 11th year in my job as a software developer and I love my job. I wake up every day and I am super excited to go to work because I get to work on interesting problems. There is no shortage of exciting work for a software developer, especially, if you work in Silicon Valley. There is no place I’d rather be.
My love for programming started when I first learned how to program in C. I simply loved the idea that I could make a computer behave the way I wanted it to. I was simply thrilled with the idea of programming. It was as if I had found my superpower. I turned my interest into my profession, I became a software developer.
I come from very humble beginnings, and growing up, money was always tight. My dad pretty much worked for a single employer all his life. He is one of the toughest guys I have known. He had gone through a lot of struggles to provide the best he could for our family. Even though my dad was deprived of a chance to complete his education, he made sure the cycle didn’t continue with his kids.
My dad had a very rough childhood and had seen some really bad days. He was thrown out of the house at a very young age and had to do all sorts of jobs to keep himself afloat. I guess his tough exterior was partly because he had to take a lot of sh*t so early in life. He often shared about the struggles of his early life, so it could be a lesson for me. During that time, I wasn’t aware of how hard it must have been for him to start from nothing and ensure we don’t end up in the same state. In a lot of ways, he is a true hero.
When you miss the love and affection of your parents during childhood, it can be very tough as a father to suddenly be that ideal parent, you wished you had. A man is often torn between guilt and anger when he is supposed to fulfill his duty and be forgiving to his own parents for not doing their job. I am proud that despite all the adversities my dad had to face, he didn’t let them come in his way of fulfilling his duties as a father.
Changing your family tree
Looking back at my childhood, I have nothing but gratitude towards my parents and how they were so committed to my success. They would go to any length to ensure I come out ahead in my life. They wanted nothing but the best for me. I am truly blessed to have such parents.
Life is 10% what happens to you and 90% how you react to it. ~ Charles R. Swindoll
Given that my father received very little support from his parents in his life, he had to put extra efforts to make sure he didn’t fall behind. He had lofty dreams for his own life and for his family. He left the city he was born and moved to a totally different city and began his career as a stenographer. He had very little formal education but his sheer willingness to learn resulted in him acquiring a lot of skills along the way. My father was never afraid of hard work.
The humongous task of changing your family tree isn’t easy. Consider yourself fortunate if you get to see your family tree change forever. I can only imagine the determination of a dad who wanted to change his family tree. I know how hard it is because his brothers and sisters, who stayed home with his parents, still struggle to this day. It goes on to show what a wonderful job my dad did, with whatever opportunities life had to offer him.
If life throws a lemon at you, make sure you make lemonade out of it.
I am very grateful to my parents for providing me with everything so that I could get a real shot at life. With the grace of God, I feel so happy and proud when I look back to where we were as a family 30 years back and where we stand today. We have come a long way! A really long way!!
It’s very hard for me to give up on something. I attribute this quality of mine, to my dad. He never picked on me and in spite of my shortcomings, he simply overlooked them and focused on my strengths.
It’s such a big deal for me because it has filled me with so much confidence that I have never let others define what I am capable of doing. It has made me resilient to adversity and I have learned how to handle them very well.
What I Didn’t Understand About FI
Given my education and the kind of jobs I landed right after college, I never really faced an issue with my income. I always made a decent sum of money. But I was simply never good with managing it. I always looked at it with a sense of detachment and considered building wealth as a selfish pursuit.
For a long time, I was under the impression that I could outearn my stupidity!
I have carried a lot of myths about personal finance. But ever since I started reading about personal finance in 2018, I have become aware of the my blind spots. This was true with FI too. I carried the following myths about FI.
1. Budgeting is for people who earn less. I don’t need one
I believed budgeting or saving money was too constraining. Why sweat budgeting your money when you can earn more. So spend every dollar your earn. I’ll just earn more, if we ever run short of money.
2. You just need a high income and you are all set
In the past 11 years of my profession, I have put an enormous amount of time honing my skills. It’s my bread and butter. So it’s OK to not bother learning about money and how it works. As long as I am good at what I do and earn decent money, who cares.
3. Ignoring the power of investing
I never bothered to learn about investing. So outside of my workplace retirement savings, I rarely ventured out and invested my money. The only exception was a rental property I bought about 3 years ago. It would be fair to say, I was never financially savvy.
Why do I want to achieve Financial Independence?
With all the knowledge I have about FI now, I see a reason why I should pursue it. I love my job, I have a wonderful income and a loving family, but I think FI makes perfect sense to me. Here’s why it matters.
1. I can take more risks
Today I consider a lot of things in a job before I take it up because I am not FI yet. I am in the wealth accumulation phase of my life and my decisions are optimized for that. So it heavily influences which opportunities I pursue and which ones I drop because of the inherent ‘risks’ involved in them. Pursing FI will eventually let me take more risks in life.
2. I want to own my time
We are trading our time for a paycheck every month. The whole idea of a traditional 40 hour work week is to provide your time to a company which extracts the value out it and ‘compensates’ you with a paycheck. By pursuing FI, I get to decide how I spend my time in a day. Once when I become FI, I can still do what I love to do, but on my own terms.
3. Ability to walk away
I am fully aware of that my passion for programming could change in a decade and I might start to love something else. That’s just life! It could be a totally different thing which has nothing to do with programming. If and when that happens, I want to be able to walk away with ‘no consequences‘. That’s a big deal for me.
4. It forces me to think why God really put me on this planet
We all have limited time on this planet but we often don’t look at our time as a limited resource. By choosing to pursue FI, you are forced to think what next. If you wake up one morning and if you had all the money you needed so that you could quit your job, would you still work the same job? Since I am not there yet, pursuing FI allows me
I have no doubt in my mind that becoming FI is one of the best things that can happen to you. If during this process, you do manage to figure out your “why”, it would be a blessing. You can then go full throttle on your calling and fulfill your life’s mission.