Financial Independence: The New and Improved Retirement

What are you investing for?

Why are you working so hard to save money, put it into special accounts like 401(k)s and IRAs, and figure out how to split it up between stocks, bonds and other investments youve never actually touched or even seen with your own eyes?

Whats your end game? What are you really trying to do here?

The party line is that youre saving for retirement. You know, that thing you get to do in your 60s after youve kept a stable job for 40+ years and finally have enough money to abruptly quit and enjoy your golden years.

But heres the truth: thats an old school way of thinking. The game is changing, and its opening up a whole new set of possibilities for people who are willing to think a little bit differently.

The big problem with the idea of retirement is that it forces you into a box. Not only does it assume that everyone should live their lives along the same linear path, but it assumes that you have to wait 30 or 40 years before you have the freedom to make your own choices about how tolive your life.

I dont know about you, but I dont want to wait. I want to start living my life on my own terms a whole lot sooner than that.

So when it comes to my personal financial plan, I no longer have a retirement goal. And when I work with clients, I try to take the focus off retirement as well.

Instead, Im turning the focus towards financial independence.

Heres what financial independence means to me: the point at which youre free to make decisions based on what makes you happy instead of what makes you money.

In other words, its the point at which youve savedenough moneythat youre no longer beholden to the next paycheck. Youre free to spend your days in the pursuit of happiness and fulfillment, whatever that means to you.

From a purely financial standpoint, the idea of financial independence is not all that dissimilar from the idea of retirement. They both require you to have enough saved up so that youno longer have to work for money.

But from a psychological standpoint, there are some key differences that open up a world of possibility.

While financial independence frees you from a dependence on income, it doesnt assume that you stop working. After all, work done in support of a mission you believe in is one of the most fulfilling ways you can spend your time.

I say that from personal experience. While Im not going to sit here and tell you that running this business is all rainbows and sunshine, I can very honestly say that I would still be doing it even if I won the lottery tomorrow and no longer needed the income. I love what Im doing and have no desire to stop.

Financial independence supports your quest to find fulfilling work you believe in, rather than forcing you to wait for the day you get to quit a job you hate.

Retirement is absolute. Youre either working or youre not. Simple as that.

Financial independence has degrees, and those degrees give you options.

The end goal of financial independence is to eventually have enough money that you never have to work again. Not that you will necessarily stop working (see above), but you have the option to stop if you so choose.

But financial independence can also simply mean having enough money to temporarily give up income in pursuit of something you care about.

Speaking from personal experience again, this is exactly what allowed me to start this business instead of finding a job. Our savings gave us the option to go an extended period of time without an income, which gave me the time to build my practice from scratch. We werent fully financially independent, meaning I would haveto start making money eventually, but we were independent enoughto allow that to take some time.

This is why I talk about financial security being the foundation of financial freedom. When you remove your reliance on the next payday, you have so many more options available to you.

That little nugget comes from this short interview with Steve Jobs, and to me it completely captures the entire mindset shift that happens when you fully embrace the idea of financial independence.

When you stop working towards retirement and start working towards financial independence, all of a sudden the entire world opens up to you. Its no longer about reaching the same end point that everyone else reaches. Now its about dreaming up whatever kind of life you want and starting to working towards it.

I would encourage you to Google financial independence retire early and just start clicking. Youll find all kinds of stories about people who have reached financial independence at all different ages and are doing all kinds of interesting things with their lives.

Theres Jim Collins, who has continually used his F-you money to chase varied interests, ensuring that his days arealways spent doing something he enjoys.

Theres Brandon Sutherland, who figured out how to take advantage of pretty much every loophole in our tax code to quit his job and travel the world with his wife.

And then theres the infamousMr. Money Mustache, who reached financial independence at 30 and now spends his days writing, building houses, and teaching advanced math at his sons school.

The point is this: you have OPTIONS. There are no rules. You get to decide what you want out of life.

The rest is simply a matter of using the financial opportunities available to you to make that life a reality.

Take a minute to think about that question right above. Or take a few minutes, or an hour or more if you would like.

Youranswer to that question is the key to your financial success.

You dont have to wait until youre old and gray to start living a life you enjoy. You can use your money to buy your freedom a whole lot sooner than that if you want.

All it takes is alittle change in mindset.

Let talk about it in the comments: whats the first change you would make if you no longer dependedon your next paycheck?

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Financial Independence: The New and Improved Retirement