A common misconception among people is that financial independence requires a huge sum of money within a short period of time – the proverbial pot of gold. It evokes a lot of different emotions as the conversation revolves around money.
Why is money important?
In the 1986 movie Platoon, infantryman Taylor (played by Charlie Sheen) had an interesting conversation with his pals while conducting the ‘celebrated’ duty of cleaning the public washroom and burning the waste. For those of you who are not familiar, the movie was focused on a group of soldiers in the early 1970s during the Vietnam war. Many of the soldiers had to forcibly go there as a result of the dreaded ‘draft’ process, whose rules were deliberately crafted so that the majority of the poor people ended up on the front lines. Basically, King and Crawford, Taylor’s pals, were stunned to hear that he had given up college and actually volunteered for the war.
Taylor’s explained virtuously “Didn’t make much sense, I wasn’t learning anything. I figured why should just the poor kids go off to war and the rich kids always get away with it.”
King, who came from the bottom of American society and had been drafted in the war, responded dismissively “You gotta be rich in the first place to think like that”.
The debates on whether money is the most important thing or not have been going on endlessly. Countless arguments have been put in both in its favor and against. I have gotten involved in some as well and I am sure you have too. That is not the purpose of this post. There are many things that money can and cannot buy. However, the most valuable of all that money can buy is freedom. Freedom to make choices – just like Taylor did when he chose to do something he wanted to. Freedom to live life on your terms and achieve your full potential.
At this point, you can probably guess which direction I lean in!
But financial independence costs a lot, doesn’t it?
Ok. Well. Money can give me the freedom to do what I want. I get that. That means I need lots of it, don’t I? Unless I manage to win the lottery or happen to be the next Lebron James, I really can’t be free. That’s not happening anytime soon – so what’s the point of this discussion?
Those are some of the typical responses I hear. It is not uncommon. Well, let’s discuss that for a second.
Ever heard about German tennis player Boris Becker? Becker shot to fame when he won Wimbledon aged just 17 and went on to win a total of six Grand Slam titles, including a further two Wimbledon titles, two Australian Opens, and a US Open crown. Having earned $130M in prize money and endorsements, he retired in 1999 aged just 31 and moved into business. Financial independence on a fast lane? I guess you could say that.
In 2017, Mr. Becker declared bankruptcy. He was forced to accept terms of agreement that were humiliating to say the least. Even his Wimbledon trophies were sold so that his creditors could be repaid!
What about the lottery winners? Well, it turns out that they don’t fare too much better than Mr. Becker. According to Wolf Street, studies have shown that nearly one-third of lottery winners end up declaring bankruptcy and it doesn’t end there. It’s usually followed by depression, drug and alcohol abuse and estrangement from family and friends.
So what I need to do?
Now, I can imagine that at this stage you might be feeling you are up against the impossible.
Well, what if I told you about Firecracker and Wanderer. They are ordinary computer engineers who, after working regular 9-to-5 jobs, retired at age 31 and now travel all over the world. They managed to achieve financial freedom despite the fact that they lived in one of the most expensive cities in Canada. To top that off, they did not win a lottery, inherit a fortune from their parents or hit a home run in the stock market. You can read their story here.
Doesn’t seem that hard now, does it?
The key message I want to get across is that financial freedom does not require falling into a pot of gold. It requires two key behaviors – changing your mindset about money and becoming disciplined.
I’ll talk more about that in the later posts.
Yours truly,
Rizwan.