Financial Independence Is More Than Just a Number
When do you think you've made it to the land of financial freedom?
Financial independence was a goal of mine when I started MoneyNing.com in 2007. Back then, I thought of the goal as a number. "When I have a million dollars in the bank, I'd be all set..." (See also: 5 Steps Toward Financial Independence)
Then I started writing, thinking, and talking about money matters on a daily basis, and that number changed. Sometimes, all the glamorous advertisements and a few impulse purchases would prompt me to increase this number. Other times, I would be reminded that material happiness is just temporary relief and I would lower the number.
It slowly occurred to me that financial independence isn't merely hitting a number, but being in the right state of mind. Some people can't retire until they have $12 million in retirement funds, while others can live on $300,000. The difference has nothing to do with the ability to find coupons, but it has everything to do with their expectations.
The funny thing is that I probably know more happy people who don't have oodles of money than satisfied, wealthy people. This may sound counter-intuitive, but the more money people have, the more money they seem to need. Of course, the money is not for survival purposes; they want more because they compare. Wealthy people are exposed to more luxury, and they subsequently want more. They see ultra expensive stuff, and they want everything.
Every company is out there trying to get more sales. No matter how much money you have, you won't have enough to buy everything out there. If you keep chasing, you will always need to run. You cannot win.
What Is Financial Independence
It is very easy to look at our assets and see if we can meet a certain retirement number that a financial article would cite, but honestly, who cares what someone else's number is?
If you have $1 million in retirement funds right now, have your house paid off and have expenses of less than $1,000 a month, why does it matter that someone else thinks they need $3 million to retire?
On the other hand, if your expenses are $20,000 a month and you have $3 million, of course you can't retire yet. You need way more than what you have. And you know what? I bet the other guy with $1 million is happier than you, too.
It's All Based on You
Financial independence is not needing to base your living decisions on financial constraints. You can achieve freedom with more money or less spending. Which road you decide to take is entirely up to you.
Just realize that once you reach a certain level of income, keeping your spending in check is a much easier way to keep up.