I Will Build My Financial Empire, Enjoy My Money, and Not Retire (Ever)
If you love your work, you may not be able to retire
Are you serious?
That was my girlfriend’s reaction when I told her in an audio chat that I will not retire (ever).
My girlfriend and I had a plan to travel the world, retire at 31, quit our corporate jobs, be digital nomads, in short, be financially free.
And when I posted, “The closer I get to financial independence, the less I want to quit my corporate job,” because my corporate job and side hustle are helping me build a third income stream, she immediately messaged me saying:
“Eh, man, don’t mess up our plans; you can’t live to work plus work to live.”
When I finished reading her message, I immediately activated my writing side and sent her an email with the three big phases in our financial life and explained to her that retiring early should not be our biggest goal, but being financially free.
3 Reasons Why I Won’t Retire (Ever)
Simply put, we have three major phases in our financial life:
The first is that of building up our assets and building our family. It begins when our studies are completed and lasts for a good few years. This is, in my opinion, the phase that changes us the most. Often you go in single and come out parent, married (well, it depends), and owner. Lots of changes that, as you can see, are happening very quickly.
The second phase is the enjoyment phase. From a material point of view, it is easier than the previous one, because even if your expenses increase, your income also increases. This is overall the phase of development of our assets. The largest expense to be expected is related to your children’s studies. This phase lasts until retirement.
The third phase is retirement and transmission. At the end of your active life, it is time for a well-earned retirement. Except for those who achieved financial freedom early and have already quit their jobs!
In any case, the retirement age is a bit uncertain at the time of writing these lines. We are also not immune to a surprise at the end of the course… Your income will drop dramatically if you have no passive income. But so will your expenses.
The financial problem here is to balance passing on the inheritance to help the (grandchildren’s) children while maintaining a safety margin in case significant expenses are expected.
Financial Freedom Is Not The Same As Living Without Working Or Retiring At 40 Or Even Earlier
Many people confuse financial freedom with living without working or having enough money to retire at 40. Nothing is further from reality. Financial independence goes beyond this.
Like every path, there is always a starting point, and in this case, the first step to building your financial freedom is to know how much you have today. That way, you will be able to know more than the number of months you can maintain your standard of living without an income.
The answer will give you the measure of your financial freedom, which is your safety cushion to face unforeseen events or to be able to make relevant decisions in your life, such as starting a business or pursuing a professional change.
It’s Not All Or Nothing, Financial Freedom Is Measured In Months And Years
True financial freedom is measured in months and years, not milestones like living off the rent (for those who do).
My definition of Financial Freedom is the number of months and years that you could maintain your standard of living if you quit working today or ran out of salary income.
As you can see, financial freedom is a path, not a goal.
In fact, it is a long-term path full of small achievements. Those who assure you that you can achieve it overnight are talking about something else (besides that, they are not telling the truth about money).
And if you want to know how much you need to live rent-free, you can do the math.
The calculation is very simple: divide the money you have by your monthly expenses using the following formula.
Financial Freedom = Sum of money available / monthly expenses
In case it is not yet clear, here is a concrete example for you to better understand: If you have $10,000 if you quit your job and your monthly expenses are $1,000, your financial freedom is 10 months.
Financial Freedom = 10,000 / 1,000 = 10 months
Now you know how to calculate your financial freedom.
Having a lot of money is good, having a lot of financial freedom is even better.
When you have financial freedom, you can lead a peaceful life without being about money. You have the security of being able to face economic and life contingencies thanks to this cushion you are creating.
This allows you to dedicate your time to your family and to focus on what you enjoy, both professionally and personally.
Money is nothing more than a tool that without purpose or focus is useless.
If you are still not clear, ask yourself the following question: would you rather have more free time or more money?
The Advantages of Financial Freedom
Being financially free is better than having a lot of money because it implies having the freedom to choose, to do, to decide… These are some advantages of having financial freedom that I have already mentioned in another text, but to be polite, I will mention them here:
You Work On What You Like
We spend half the day at work, almost more time than at home if you add commuting and subtract sleeping hours, and its impact on our lives and perception of happiness is huge. Yet many still come reluctantly, forced by the need to collect a salary at the end of the month and afraid of being laid off. When you have financial freedom, things are very different.
Because you know you have a financial cushion, you can work only on what you enjoy, and you are not forced to say yes to every project or job that is presented to you.
In other words, you become more selective because your finances allow you to be, and you also become more aware of the jobs you really enjoy because you can stop and think about them. Work ceases to be an obligation and becomes a motivating element.
You Enjoy More Professional Success
When you have financial freedom, you are more yourself and less of your fears. You are more proactive at work because you are not thinking about what might happen if you make a mistake or please your boss, but about doing your best and giving your best. Even if you are your own boss, you will see how your ideas flow more and better.
You Live Where You Want
When you have financial freedom, the fear of change disappears. If the opportunity arises to travel to another country for work, you can do it because you have a safety net that supports your decisions. You have room for error and are free to try. Your current job does not determine where you should live.
Also, because you live more peacefully, you have a better view of your real housing needs. In other words, you are able to really know what brings you to live in one place or another.
You Can Take a Vacation When You Want
Financial freedom allows you to disconnect from work at any time and also do as you please. If you need a gap year, you can have it.
The confidence that your safety net gives you also transfers to the work and professional level.
You Never Have Money Problems
Since having financial freedom is much more than just having money, it is no longer a problem. You no longer have to look at your checking account because you know what your financial cushion is, but also the slab that not having control of your finances can mean.
You Enjoy Life More
At the end of the day, financial freedom takes money-related fears out at the root, and without that worry in your mind, you can focus on what you really enjoy and what matters to you.
The effect is that you enjoy life more because you are not thinking about money or what it will be like in economic terms. If your mind is free to dream, it is also free to be happy.
Final Thoughts
Financial freedom should serve to give you emotional peace of mind about money. As I told my girlfriend, retiring early should not be our biggest goal, being financially free should.