Two Paths to Financial Independence – How Fast We’re Going

Similar to the popular mantra “personal finance is personal”, there is no one “right way” to achieve Financial Independence. In fact, there are an almost infinite number of ways to achieve FI (well, technically probably not infinite, but there are a lot).

The many different paths to FI include both the HOW (i.e. real estate, entrepreneurship, index fund investing, etc) as well as the speed of the journey.

Note: In this post we’ll focus on how fast we’ve been traveling towards FI while in the previous post we discussed the specific methods & techniques we’ve each chosen to employ.

The Squire

My path to Financial Independence has been seemingly slow thus far… at least compared with others in the FI movement. Fortunately for me though, life is pretty good, and I’m hopeful that it will stay that way at least until the point in time that I reach Financial Independence.

There are quite a number of factors that have caused the lack of speed for this goal of mine. Most of these are at least partially under my control, but some are not.

I must say that the lack of speed getting to FI has not been entirely detrimental to my financial future. On the contrary, due to several decisions and priorities and perhaps some luck, I’ve managed to remain mostly happy and positive, despite probably needing another decade or so before I’ll reach FI. Although not a complete list by any means, here are some of my observations that have me in this slow but mostly happy path to FI:

Got started late with investing. I worked close to a decade after college spending almost all of my take home pay. I hadn’t quite understood the potential I was missing out on by waiting. I finally started making more investing changes after we were married, we had our first kid, and bought a house, in our mid thirties.
Didn’t cut back much on fun things that cost money. On the happiness side, I/we did enjoy spending money on music, concerts, traveling, and food. Even when we did start investing more, I wouldn’t say we cut down much on spending on things that made us happy. Our path to FI would be much shorter if we invested the money we spent on non-essentials.
I’m slow at making financial decisions. When I’m not educated on a topic, I have a hard time making decisions. It took me years before I even took the time to learn about investing. Eventually I felt knowledgeable enough to make confident money moves.
My job suits me right now. I am happy with my job right now. I feel that I’m contributing, what I say matters, and my colleagues consider my point of view, but also feel free to express theirs. I’m able to spend a majority of time working from home, but I do go into the office, which is typically less than a 20 minute commute.
Not currently considering a higher paid position. If another position above mine in pay and responsibility came up, I don’t think I would apply. My job duties are challenging but fun, and I’m not looking for different responsibilities or more stress.
Work is over at 5pm. My job is over at the end of my work day. It is very rare that I have to stay late on a weekday or work on the weekend.
Level of stress is relatively low. There are some aspects of my job that have some stress, but I think for me a little bit of stress is probably a good thing. However, it isn’t very often that I think of work outside work hours.
My manager offers guidance and protects me from overload. I always seem to have plenty to do, but without feeling overwhelmed. This keeps me motivated most of the time. We’ll see how things change if my manager ends up retiring.
Coworkers are fun to work with. My colleagues are always willing to share knowledge and ask questions. I do try to catch up briefly on non-work related topics, but not out of obligation. Mostly we talk shop, and everybody has different skills and perspectives that I get a lot out of.
Mindset is geared toward learning and growing. I’m enjoying the constant learning. Accomplishments help me feel that I’m contributing. I try to stay positive, and it helps that I feel respected by others.
Pay is lower than many others on the FI journey. One of the reasons it’s taken a while to invest as much as I have, and it might take another decade still, is because I don’t have a super high paying job, and I live in a relatively high cost of living area. I’ve always cared more about the job than the pay, and that’s given me a longer path to FI, but a pretty happy path nonetheless.
Still get time with my family. Having worked at my job for more than 10 years now, my vacation accrual is slowly increasing. Although I haven’t yet taken the whole summer break off with my kids and wife, I typically take several weeks off throughout the year for vacations with my family.
I’ve started to grow my confidence. As both my understanding of and actual money invested has grown, I feel more confident in doing what makes me happy. If any of the factors mentioned previously start to turn away from being a pleasant experience, I feel better about fighting for my happiness, even if it means less hours, lower pay, or even if it means having to look for a different source of income.

Now, if you think that I am quite lucky to have so many things going for me, you may be right. It may be that I’m somehow predisposed to being a little bit happier than others I know, or maybe my happiness scale is different than others, but it is a fine balance to be dependent on others for employment, have to answer to a boss, enjoy the work you do, and have a positive outlook on the upcoming day, whether it’s a work day or the weekend.

Any slight shift in the work I do, a new co-worker or member of management, or change in any number of things in my personal life, could change my financial future drastically. I may very well regret the various decisions I made to take a slow path to Financial Independence.

It is true that no matter how I’m doing now, my life may be better in every way when I do leave my job. But knowing that my path will be unique from everybody else’s, it’s also possible that a part of me is going to want to hold on to my job longer than I need to because I don’t know how I’ll deal with leaving. What if it turns out I’m not as happy?

As I get closer to FI over the next decade or so, I have some self-reflecting to do, some long term goals to set, and some long vacations to take to get me ready for retirement, if and when I’m ready.

Scout

I rushed to FI. This was primarily due to my personality; I’ve always been someone who put my head down, worked hard, never let up, and went “all-in” until I reached any goal that I set out in front of me. Of course this type of sprint is not for everyone and it did lead to some regrets along the way, as well as many personal and conscious trade-offs. However, this is the path that worked for me and I wouldn’t change a thing.

Front-loading the Sacrifice

Throughout my life I’ve always put hard work & unpleasant tasks up front so that I could get those out of the way first, delaying gratification, and ultimately leaving more of the fun/leisurely tasks for the end. Most of this has stemmed from my natural tendencies, but part is also due to intentionally planning ahead.

Examples of front-loading in my life:

Finished homework as soon as I got home from school, so that I didn’t have it on my mind throughout the evening or over the weekend.
In both high school & college I took all my hard/required classes upfront within the first 3+ years, so that my last quarter would be easier and I could coast to graduation. (My last quarter in high school I took photography and was a TA. My last quarter in college I took the minimal # of full-time credits and only 1 engineering class).
Preferred to eat lunch later in the work day, so that my afternoons were “shorter”. (In an 8-hour work day I liked to work 5 or 6 hours before lunch, so that I only had 2 or 3 hours remaining in the day).
Eat vegetables first at dinner, so the rest of my meal can be spent enjoying more pleasant tasting food. I’ve done this ever since I was a kid and still continue this routine to this day.

I found out later in life that this practice was called “front-loading the sacrifice”, where significant time, energy, and effort are invested early in a process in order to build a strong foundation with the objective of reaping greater benefits and/or to experience easier conditions in the future. Some advantages of this strategy are reduced future sacrifices, increased freedom & choice, and the positive effects of compounding (particularly when it comes to investment returns).

Note: There are many great resources that further discuss the concept of front-loading the sacrifice, but a couple of my favorites are a podcast episode from ChooseFI called “Declutter, De-Noise, & De-stress: Clarity and Goal Setting Part 1” and a blog post from Earn & Invest called “Front-Load The Sacrifice”.

Joining the Sprint to FI

My natural tendency to front-load permeated all areas of my life, so it obviously carried over into the realm of personal finance & investing as well. For most of us, at least anecdotally, when we first learn of Financial Independence, we have an inclination to start pursuing it full-speed. It feels like a secret life-hack has been revealed and I think most of us are impatient (as with most things in life) and want to jump to the end & get to the finish line as soon as possible. I was no different.

In fact, “old school” Financial Independence culture seemed to focus on this fast, heads-down approach with many popular FI bloggers such as the Mad Fientist and 1500 Days To Freedom leading the way. Everyone seemed to hate their jobs or hate working in general and the goal was to get out of the rat race as soon as possible in order to enjoy a life of freedom. Spoiler-alert: many of these early bloggers DID make it to the finish line rather quickly.

So when I first discovered FI back in 2018, I looked around at the existing culture & community at the time, and it seemed like my path was set. I quickly laced-up my metaphorical running shoes and began a sprint towards FI, doing everything in my power to get to the finish line as swiftly as possible.

Time is Constantly Ticking

The main drawback for rushing to FI is the reality that FI usually takes MANY years to achieve. While I applaud the strong level of commitment it takes to dash to this goal, there is also an acknowledgement that time continues to march forward in parallel. It can be very easy to focus on the future at the expense of missing out on the present and foregoing opportunities to live life today such as spending time with friends & family (especially our kids), traveling, etc.

Time is a non-renewable commodity and there is no way to create more, so we always need to ask ourselves whether the sprint to FI is worth missing out on life experiences in the present moment.

Second Thoughts & Alternate Paths

Although the Mad Fientist and Mr. 1500 Days both rushed to achieve their FI goals, each one subsequently reflected on their journey and stated that they would’ve done things differently. The Mad Fientist described part of his journey as “Dark Times” while on the fast-track to FI because he found himself miserable due to all the sacrifices he made along the way. His ultimate lesson was “Don’t put off happiness until FI”. Mr. 1500 Days described his journey as a “Death March to Financial Independence” also citing how miserable he was and how he “forgot to enjoy life”.

Fortunately this “old school” FI mentality is starting to give way to many new variations of Financial Independence such as Coast FI (having enough saved in the present to provide for a comfortable retirement at a traditional age, i.e. front-loading savings & investing and letting compounding work its magic) or Slow FI (a philosophy that focuses on using financial freedom to intentionally design a better life NOW instead of waiting to hit a FI-number/early retirement sometime in the distant future).

My Own Mistakes

My path to FI wasn’t always a cakewalk and I fully acknowledge that I missed out on a lot of things over the years. One of my regrets is being deficient at cultivating strong relationships with friends – I lost a good number of friends because I was either too busy working all the time or I didn’t want to get together and spend money on “frivolous” activities like going out to dinner or to sporting events. Another regret was that I had a work-life balance that leaned primarily towards the work-side of the spectrum, resulting in so many missed things – missed travel experiences, missed opportunities to spend time with friends & family, missed chances to say “yes” to random/fun things. At times my life also felt rather mundane & like a relative blur.

Because of these past mistakes, I am now trying to live life more in the moment & trying to create memorable experiences, while also acknowledging that I can’t truly make up for lost time.

A New Trend in the FI Community

The cool thing that I’ve been noticing recently is that there has been much more discussion around the topics of both Coast FI & Slow FI. Not only have I been hearing these topics discussed more frequently on podcasts, but surprisingly (or perhaps not surprisingly) I’ve also been hearing these same conversations at various in-person FI events that I’ve attended, including the EconoMe conference, Camp Mustache, and even at my local ChooseFI meetups.

It seems that more & more FI community members are coming to the realization that not only are there multiple ways to achieve FI (i.e. real estate, entrepreneurship, index fund investing, etc), but that there are multiple speeds to achieve FI as well. For those who choose to take a slower path than I did (including The Squire), it seems that most are very happy because they’re choosing to partake in the benefits of a FI lifestyle today instead of waiting for some “magical day” in the distant future to start realizing these benefits.

Links/Resources

Reader Questions

How fast have you been traveling the path to Financial Independence? Are you satisfied with your current pace or would you consider either slowing down or speeding up?

Leave your answers or comments below – or email us directly at info@epicfinancialjourney.com