What Is Financial Independence … for Me?

When we mention to somebody that we are on the road to financial independence, people tend to look confused about what that actually means (and then of course they laugh in our faces thinking we’ve gone completely crazy). In fact, it’s not really a good subject for small talk because it might give people the impression that you’re an arrogant, naive monkey. It takes some time to explain:

  • What is FI all about
  • Why it’s an obvious goal to have
  • How we’d like to reach it

We’re not the first and won’t be the last to choose this path, but all FIers seem to have a slightly different interpretation of what FI actually means. In this post I’d like to explain what FI (and early retirement, which for us is basically the same thing) means for me.

So here we go!

Financial security. When I first got a job in Germany in 2006 aged 23, my work permit application was turned down (I wasn’t a German citizen at the time and the situation was complicated). To make a long story short (I’ll write more about it in the future), I became a self-employed software programmer which meant I could work as much as I wanted for whoever I wanted.

In reality I mostly worked for one company but I had a handful of other customers as well, not just to avoid running into problems with the German tax authorities, but because…why not? I had customers from before and now that I had a “job” I didn’t have to stop working for them. Several income streams. How cool is that?

I even paid lower insurance premiums, pension contributions and stuff like that meaning I could take home far more money than I’d have been able to as an employee.  The excitement was big…until, very quickly I realised that not paying into a pension fund means (surprise!)… not having a pension when I retire. How annoying!

So very quickly my little brain started to search for solutions. What should I do? Private pensions? How do they work? Are they worth it? Should I invest in something? In what? I had absolutely no idea but the questions kept coming. Unfortunately I didn’t know about the concept of FI at that point, but the very moment I became self-employed was like a huge kick in the ass. Doors opened that I never knew existed.

At the same time I had to think about the future and about financial security when I’m old and can’t or don’t want to work any more. Also, what happens if for some reason I can’t work at all (accidents, illnesses etc.)? I quickly set myself the goals of being independent of an employer and having passive income. At that time though I didn’t even think it would be possible for me to be fully financially independent. In fact, that wasn’t even my goal for many, many years.

Living our lives, rather than somebody else’s. It’s inexplicable for me how millions of people have a 9 to 5 job for 40 or more years and don’t ask themselves something along the lines of:

  • “Does it have to be this way?”, or
  • “Can I maybe live my life in a way that I have more time for me and my family?”, or
  • “Do I love what I’m doing?”

If somebody truly thinks about these questions and really wants to change something, I simply can’t imagine that they can’t find the answer!

The problem with a normal job is that you’re basically a slave. Ok, they pay you, but you are a slave to somebody. Most of the hours you spend at work, you don’t live YOUR life but somebody else’s.

Of course I am talking here about a classic job that you just accepted for the money or for your “career”. If you’re doing something you really enjoy, it’s a completely different story! However, it was clear for us that the jobs we did…we won’t miss.

Early retirement doesn’t mean not working. I don’t think I can ever imagine living a life without working. The cool thing is, now I only do work I enjoy and avoid stuff that I just don’t like doing. And also, I don’t work for people I really don’t like. I’ve learned my lessons…

I run a couple of websites (communities)  that generate enough income to cover all our expenses. It’s not all passive, but for me that’s not so important. They are my babies. I created them. They live and prosper. I like to take care of them and watch them grow. And watching them generate lots of money is a fantastic feeling. I don’t have any plans to give them up or sell them even though we have other, more passive investments that cover all our expenses forever.

Working can mean many things but if you’re doing something you love…you just don’t call it “work” the way others would understand it. It’s a hobby, it’s a game, it’s relaxing, it’s excitement. As a programmer, if you go to an office and build software for somebody else, that’s work. But if you build your own community that lives 24/7, or if you work with passion for dozens of nights on a miniature train that starts running all by itself on your tracks….that’s not exactly work. Got the point? Good. Let’s move on.

Fun. Now that we’ve reached FI, our lives are far more exciting than before. Having the freedom to do whatever we want with our days (ok, we have to put that in the context of raising two little kids) give us the feeling that we’re playing some sort of brutally realistic strategy game where we can’t really lose. It’s something we’re only doing for fun and it cannot have a devastating effect on our real lives.

There are days where I call up potential customers and sell them advertising space on my website. On other days somebody just calls me up and wants to pay me loads of money to put a banner on my front page. Often people need me to help them with a short project. If I like it, have the time for it and I can help I’ll do it. If somebody wants me to travel to the ass of the world to hold a workshop I tend to say no. Sometimes, if I miss travelling or just need a break from the kids (energy sucking monsters!), I choose to do it. It’s FUN to be free to choose what you do and don’t want to do! A lot of fun!

Learning. I’ve always been a curious person. I’m not interested in everything, but I tend to ask questions. I want to know how things work, especially if they have an impact on my life or if they’re important to me. I wasn’t a fantastic student. I was average. I hated learning stuff that didn’t interest me, but the stuff I wanted to know, I studied day and night.

If I think about my first months and years of self employment, the first thing that comes to mind is the fact that I learned sooo much stuff about all the things that had a direct impact on my life: accounting, sales, how businesses work, how the economy works, law and basically how to make money and be your own boss. I quickly realised that having (only) a full-time job is just one step up the ladder from being homeless and jobless. These people are in a rat race.

Mrs W just quit her job a few months ago and became self employed as well. I see the same thing with her. It’s amazing. She’s started asking different questions, customers have started calling her, she’s started optimizing her work and being more efficient so her hourly rate goes up. Time has a completely different meaning to her as well. It’s an enlightenment process.

Once we got the idea that we should aim for FI we started digging around, reading blogs and streamlining everything we have and do to reach this goal. It has been a huge learning process that we both passionately love. We never want to stop learning. The good thing is that since reaching FI we have more time to learn the things we’re interested in, whether it’s about our health, our kids’ education, efficiency, saving energy … whatever we are curious about.

Time. Our time on Earth is so limited. Why should we spend it living someone else’s life or doing stuff we hate? It’s an obvious question, yet the vast majority of even educated people with 5-page resumés, masters degrees and PhDs just don’t ask it. I don’t get it. I honestly don’t.

Imagine having all those working hours at your disposal to do whatever you want. Every day. For the rest of your life. Just take a moment and let it soak in. How can this idea not motivate you to get up and find out HOW to do it, then DO it?

Independence. Asking permission to go on holiday? Asking permission to take care of your ill child? Asking permission to basically LIVE your life? These are concepts I just can’t accept. Can you?

Health. I am not even talking about those many, many cases in which going to work actually harms your health. Whether it’s the polluted air, the stress, or even the risk of driving to work every day. That’s one thing. The other thing is: how much could you do for your health if you had the time to do it?

When I went into the office almost every day (until the end of February 2015), I just didn’t have the time to go to the gym more than once a week. Not that I love the gym. I don’t. But I go because I believe it helps keep me healthy. Well, sometimes I think I just go there because I feel guilty about all the crap I eat. Since I’ve been working from home for myself I’ve started going three times a week and I love the feeling of being able to do that! And a big thanks to Mrs W for helping me with that!

We also have a lot more time to think about and plan our meals rather than eating rubbish because we don’t have time to cook.

Education of our kids. We’re surrounded by families who put a lot of pressure on their kids to get good grades so they can go to a good university. The other day I had a conversation with a friend and his 15-year-old son. They were talking about what the guy should study and how difficult it’ll be to get the grades he needs to be accepted by that uni. When I suggested that he should look into alternative paths as well such as self employment or becoming a skilled craftsman – paths were you don’t need a masters degree but where you can earn just as much money – the father looked angrily at me and said that I shouldn’t try to persuade his son to take a path to an insecure future.

That’s bullshit. I strongly believe that you can have a job you love and earn good money, even become financially independent without a university degree! That’s what I want teach my kids. Of course, if they’d like to go to university, they’re free to do that. I want to support them without putting pressure on them. 

Our kids will grow up in an FI family and will see and decide for themselves what lifestyle they want to have. The most important thing is that they will have insights into both worlds: ours, the FI life, and the standard career path of most of the people surrounding them.

Like-minded people. Most of the people we’re surrounded by just think so differently. Mostly it’s a waste of time hanging out with them and listening to their “let’s impress everyone with our fancy gadgets, furniture, cars, clothes and package holidays” stories.

The reason we’re writing about our journey is not to impress anybody, but rather to connect with people who have a similar mindset or are open to persuasion. We want to share, but also to learn from others (in the comments for example).

What would you add to this list? What is FI for you?