A very challenging goal to achieve in life is financial independence. This is defined as having enough investments and passive income sources to cover your expenses without relying on a job. This takes a disciplined approach with multiple decades of dedication and focus. Are there rare occasions when a windfall is received accelerating the time period? Absolutely. Is financial independence a worthwhile objective to focus on? Only you can answer that question. However, there are key reasons to consider joining the journey.
You may consider your job to be very secure. There are however situations that occur in the market that can quickly remove this security. Jobs can be disrupted by new technologies, business decline, loss of a key client or something completely out of left field like the pandemic. A loss of job income can be very difficult to manage if a safety net is not in place.
Medical Issues or Injuries
It’s common for an employee to plan to work to a certain age. It’s great when this works out and employment continues to the specified age. However, in some situations a medical issue or injury can derail this plan. This can be temporary or permanent in nature and place a significant strain on finances.
Change Your Mind
Early in the career, you may love your job and plan to work until a full retirement age. A change in company ownership or your boss could quickly turn around your outlook. It’s possible to go from loving your job to dreading it in a heartbeat. In these situations, you may want options to transition out of a difficult situation.
Peace of Mind
It can be very reassuring to have a financial cushion in place. If a safety net is not there, it can increase your stress level and reduce options. This is especially true if you experience a bad time period at work. Just knowing work is a two way street and you have the necessary financial resources in place provides peace of mind.
A time may arrive when a family member or friend goes through a difficult financial situation. If you have a strong financial footing, assistance can be provided to others during their time of need. You can make a difference in the life of that person.
Pursue Your Passion
Is there a hobby or pursuit you are passionate about? It may be difficult to pursue this path and make enough money to support your expenses. If you reach financial independence, passions can be pursued without worrying about meeting the monthly bills.
A stressful career can reduce the amount of time available to spend with family. This may cause you to miss soccer games, birthday parties or other events. You may find the level of energy available after an exhausting day at work is low. The amount of energy available for family after giving your job 100% could be low. Achieving financial independence can put you in a position to spend more quality time with family.
There is a tremendous amount of security provided when you know bills can be paid without having to go to work. As human beings,, we want to make sure our basic needs will be taken care of. Achieving financial independence provides a security blanket.
A full time job takes more time than the 40 hours or so we are working during the week. You have the daily commute to and from work and the amount of time it takes to get ready in the morning. You can very easily be dedicating 50+ hours per week to the work effort with all things considered. Once financial independence is achieved, you can choose to work less or not work at all. This gives you the freedom to allocate more time to the pursuits that are valued.
The majority of jobs involve some level of stress. There are deadlines, traffic jams, difficult people in the workplace and the dreaded annual performance review. This added stress can cause negative impacts on our health. Once financial independence is achieved, choices can be made that can improve your health. For example, you may choose to work a less stressful job or go part time. In some cases, you may choose to not work at all, spend an hour a day at the gym and eat healthy meals.
There are numerous benefits to staying on the path of achieving financial independence. Ten reasons were highlighted today but there are many more. The key takeaway is financial independence gives you options. Does it require a certain level of effort and sacrifice? It absolutely does but the return on this investment can be significant.