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| Breaking Free from Money Worries |
The journey towards financial freedom is not a walk-in-the-park. It requires an unwavering desire to achieve the goal, sustained persistence and dedication in the face of skepticism (both internally-generated and externally-influenced), and enduring mental and physical discomfort (some say hardship, depending on your personal threshold) for the many sacrifices (in the form of delayed gratifications) one has to make. Stretch the journey out over the very long term, it is not surprising that only the minority stays the course.
So what exactly determines a person’s chance of success in this quest for financial freedom? Though I am in no way financially-free (yet), having stayed the course for a few years now, and having experienced the swing from being optimistic to pessimistic, and now to being realistic, I thought I could share my own personal reflection on what made me stay the course, and what I think is the one most important factor affecting one’s chance of success in this quest.
Financial Freedom – A Goal Like No Other
Making the decision to work towards financial freedom is one thing – after all, it sounds cool and adult-like – but actually committing to that decision and having it as one of the main considerations for almost every choices you make is quite another matter altogether. Like most other long-term life goals that are worth pursing, the quest for financial freedom cannot be worked on only from 9am to 5pm, Monday to Friday. To have a reasonable chance of succeeding, you have to measure (almost) all aspects of your life against that objective, and make the necessary adjustments, both major and minor ones, to align your life to it. You have to “live” the goal, not just “work on it”.
And I am not exaggerating.
Unless you are born with a spoon made of precious metals, or are among the top earners in your country, the only fast enough way (read: within your working lifetime so that you can enjoy the “freedom” part of “financial freedom”) to have your passive income exceeds your expenses is to keep the latter to a minimum. Trimming your expenses necessarily means that there will be discomfort, lifestyle adjustments, sacrifices, and not to mention the numerous occasions when you have to go against your wish and put off buying that dress that you are sure to elicit “Gosh! Where did you get this dress from? You look dead gorgeous!” kind of responses from your friends. But, if you are dead serious about achieving FF, you must be dead serious about cutting expenses, and lo-and-behold, expenses can be cut in ALL areas of your life, including when you are sleeping (e.g. using the fan instead of air-conditioner).
Depending on how much and how fast you want to achieve financial freedom, the measures/changes you adopt can be calibrated accordingly. But in general, you can expect the journey to include drastic changes to your current, probably wasteful lifestyle.
The One Thing that Makes All the Difference
Given the level of involvement and commitment required of anyone who wish to achieve FF, it is inadequate to treat it just like any other goal. Unless you are extremely disciplined, and want FF so much that you are willing to put up with “pains and sufferings” for the long term (and possibly for the rest of your life because you are expected to continue keeping your expenses low even after achieving FF), you are likely to give up mid-way through the journey. Even if you do attain FF, does it make sense to stay the course when you are struggling to make sense or justify your commitment day after day? If you are not happy with your FF-lifestyle, then is it a goal worth pursuing in the first place?
That brings me to the one critical factor that determines your chances of attaining FF, and whether or not you should be pursuing it in the first place: Values & Beliefs (V&B).
Okay, I cheated. That’s two factors, not one. But I am no literature student, and I am not about to dissect and analyse the differences between the two. I see them as the same, and I think this understanding should suffice for the discussion here.
V&B as a Strong Predictor of Success in the Quest for FF
V&B is a strong predictor of success in the quest for FF because it determines the way you view and feel about the difficulties, challenges, hardship, and sacrifices you have to make. Some V&B supports you in the journey, while others work against your effort. Let me illustrate with my own personal experiences.
I am someone who cares about the environment, and values simplicity and minimalism over excesses and extravagance. If I need to get to the supermarket to buy some groceries, would I choose to drive (10 minutes) or cycle (15 minutes)? The choice is an easy one for me, even when I put aside the financial considerations. Because moving 1.5 tonnes of metal to the supermarket just because a 67kg me needs to get there to buy some 3kg worth of groceries is such an outrageous and wasteful way of using energy, and that cycling is infinitely better for the environment than driving, the choice to cycle comes naturally to me. My V&B guided me towards that choice, which, coincidentally, is also one that is financially-sensible. I face no internal struggle throughout the decision-making process, nor feel like I am “sacrificing” my comfort for my goal, because my V&B is congruent with my FF-goal.
In contrast, my parents-in-law values comfort and good food. They believe that living life with a certain (read: high) level of comfort is important, and culinary experiences provide them with much joy. To them, petrol cost and parking charges are small prices to pay for the comfort of sitting in an air-conditioned car. To be sure, they are not wasteful – they drive a modest Toyota even though they could probably afford a Mercedes Benz – but because their V&B accord “comfort” and “good food” a high level of importance, giving up their car for the bicycle and premium-grade Wagyu beef for chicken wings will naturally feel like a big sacrifice. Identify a few more “sacrifices”, and you can be certain that my parents-in-law will be ditching the FF-goal in no time.
TL;DR: If your values and beliefs naturally lead you to make financially-sound decisions, you are more likely to stay the course over the long haul.
V&B as a Litmus Test
Examining your V&B is also useful in predicting your level of happiness after you’ve attained the FF goal, and therefore whether you should pursue it in the first place. Unless your FF goal accounts for a substantial increase in expenses once you have attained it (not recommended as this would make the goal an even more difficult one, thereby further diminishing your chances of staying the course), chances are you will be required to maintain the same lifestyle as you were livingbefore achieving FF. Therefore, if the journey towards financial freedom is already unbearable for you from the beginning, my guess is that you will not find happiness in achieving the goal. Simply put, your V&B is not aligned, and thus the FF goal is not suitable for you. In such cases, be kind to yourself and work till the statutory retirement age, and save up enough to last you till your final days.
Afterthought
While the idea of financial freedom might sound appealing to most, it is certainly not suited for all. Everyone is made different, and we should assess our own temperaments, personal inclinations, and perhaps most importantly, your V&B to decide if achieving FF is a goal that makes sense for you.
*The above is a sharing of my experience and introspection. As you might have noticed, I made many assumptions – the more glaring one being that living a financially-free life necessarily means having to live frugally. I believe this holds true for the majority of the working class, though this might not stand for the strong earners.
