Do you want to break out of the rat race and stop trading hours of your life for money?
Financial independence is the having the passive income to pay your living expenses for the rest of your life without having to be employed or dependent on others.
Reasons to be financially independent
There are many reasons you may want to be financially independent. It is more than just retiring early. I remember speaking to my wife about it years ago and she told me, “I don’t see a need to be financially independent, I am happy at my work. I do not want to retire yet.”
I laughed and told her the same. I am not ready to retire either. I enjoy what I do as well. Nonetheless, I believe financial independence is important for a variety of reasons. I have listed a few below.
Financial Independence is Important Because today we have no Job Security
In today’s world, job security is an illusion. The old days of working for one company until the day you retire and then receiving a fat guaranteed pension are long gone. Some place still have pensions. However, the value of those pensions are at risk due to low interest rates. Fact in point is all countries are raising the retirement age just to keep everything going.
Without financial independence, we are financially vulnerable. To give some sense of security, we work long hours, sacrifice weekends, sacrifice health and sacrifice important relationships without promise of security. No amount of sacrifice, no amount of upper education and no past success will guarantee you are not at risk next time a company needs to restructure.
How many people do you know who have not lost jobs due to restructuring? Do you feel in job security?
In today’s world, job security is an illusion. The old days of working for one company until the day you retire and then receiving a fat guaranteed pension are long gone. Some place still have pensions. However, the value of those pensions are at risk due to low interest rates. Fact in point is all countries are raising the retirement age just to keep everything going.
Without financial independence, we are financially vulnerable. To give some sense of security, we work long hours, sacrifice weekends, sacrifice health and sacrifice important relationships without promise of security. No amount of sacrifice, no amount of upper education and no past success will guarantee you are not at risk next time a company needs to restructure.
Financial Independence is Important to get out of the “Rat Race”
The Rat race is an endless, pointless and self-defeating challenge. Think of a hamster in a wheel. Constantly running, but getting nowhere. The phrase rate race is often used to illustrate how we are engaged in a competitive struggle to get ahead financially, without ever being able to actually do so.
Do you feel you work longer and harder, take bigger responsibilities and are still stuck in the same place? You are trading hours of your life for money, but not any closer to being free.
Financial Independence means you can choose to do what you want with your time without being trapped in a rat race for meaningless pursuit.
Financial Independence is Important Because It Means you are better able to Help Others
Being financially free means you can find ways to serve and be of benefit to others. Volunteer time, be a kinder, less stressed person, donate money and do charity work. There are many ways to help society and others. Financial independence provides both the time and financial means which allows you to help others and do so in a way you see fit.
In searching for meaning in life, helping others is a very rewarding way.
How would you help others, including your immediate friends and family, if you had more time and wealth?
Financial Independence is Important Because it Means more fulfilment and fun in life
Money will not buy you love or happiness. Money will buy you peace of mind, fun, and the ability to pursue fulfilling goals. Money is only a tool, and a very useful one. Financial independence provides you the ability to spend more time staying at home taking care of your younger children. It allows for longer and nicer family holidays. It means you can take a holiday when you want and not have to count your available leave or check with Human Resources if you can take unpaid leave.
Financial independence removes some of the economic constraints which restrict you in how you choose to pursue your passions.
Financial Independence is Important Because it enables you to do work you are passionate about
If you did not need to worry about money and had the ability to start over, would you do the same thing you are doing now? We all have the same 168 hours available in every week. Financial independence is important because it enables you to choose how to spend those hours. Once you are financially free, you will likely want to continue in some sort of meaningful endeavour. Call it work if you want.
Being financially free enables you to define how, where and what that work endeavour looks like. There is no greater joy than doing something you are passionate about, learning and growing each day and doing it with passion. Remove the shackles and give yourself the ability to decide what that is.
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