Financial Independence
On this episode of Financially Naked: Stories from The Financial Gym, hosts Tina and Ijal talk about Financial Independence. Together, they discuss the principles behind the FIRE movement and common misconceptions associated with FIRE. Financial independence looks different for everyone and this episode explores how everyone can work towards FI and how it can help you create a life filled with flexibility and purpose.
Podcast Notes
What is Financial Independence?
FIRE stands for Financial Independence, Retire Early. Reaching financial independence means supporting yourself and paying for living expenses through your savings and investments. It makes work optional.
For Ijal, the journey started in 2019 when she learned about investing. Tina was inspired by FIRE blogs like Mr. Money Mustache and wanted to escape her 60-70 hour workweek and eventually live a work-optional life.
Both Tina and Ijal were drawn to the FIRE movement while working jobs they didn’t love. For them now, their goals have shifted. As Financial Trainers, they encourage each client to work towards financial independence.
The goal isn’t always to retire early. It’s about having the freedom to choose how you live and spend your time. This can mean taking a pay cut, starting a business, or pursuing hobbies. It’s about having control over how you spend your time.
Common Misconceptions and the Power of Values
Financial Independence is not about being lazy or sitting around all day. It’s about having options and the freedom to spend your time how you want. It’s about having flexibility.
There is a stigma around the FIRE movement only being for high earners or hyper-frugal people. This isn’t true. Anyone can pursue financial independence.
Everyone’s path looks different, and financial independence is accomplished by consistently saving, investing, and being intentional with your money.
The concept of FI challenges our consumer-driven culture by asking: Does buying more actually make you happier? What truly brings you joy? Whether or not you actually want to retire early, having more options in life is something that everyone can benefit from.
The First Steps to Financial Independence
Your financial independence number is unique to your lifestyle and goals. As a baseline, the basic math is: annual expenses x 25. Once you have your number, you can plan how to get there.
Financial independence starts by increasing the gap between your income and expenses and then investing the difference. You can earn more, spend less, or do a combination of both! Get creative.
It’s not an either/or approach. There are many ways to accomplish Financial Independence. One step toward FI is to reflect on your past habits and spend less on things you don’t truly value.
The key is to start where you are. Everyone’s path looks different, so start with what is accessible now. Start learning and grow from there. If you need help, a Financial Trainer can help you do the math and create a clear plan.
If you want to work with a Certified Financial Trainer to help navigate your finances, schedule a free warm-up call today! If you have any ideas or questions for the show, send an email to trainerpodcast@fingyms.com.