When we started invested almost 3 years ago, our first objective was to get rich(er). We started buying stocks of which we believed would reach up to great heights so we would be able to cash in. Of course, this wasn’t build to last. By researching more and more about investment strategies and how to deal with money, I stumbled on some PF blogs that were talking about a whole different way of thinking than we had at that time.
So, we shifted our focus to the long haul and started investing in dividend stocks. Aiming for a more meaningful and happy life by reaching financial independence, and the freedom to do whatever we choose. In other words, being opportunity-rich and time rich.
I can tell you, that it’s working. And over the years we’ve built up a small portfolio providing us with some passive income. We’re still far from reaching financial independence and it will take over ten years before we get there. The thing is, my objective that motivated me on this journey was the promise that one day I would be able to stop working my day job and could ‘finally’ pursue what I really wanted and when I wanted it. But I’m not that willing to wait until then, in order to pursue the things I like to do now.
The long wait to …?
Having a lot of money isn’t the end goal, it’s finding happiness. And having money sure makes it easier. But I also started to look at money being nothing more than a big safety net. If we want to pursue something other than our job, and we would have a big nest egg, it doesn’t matter if we fail. Because we already have income streams that will cover it if we fail. Many keep on working on their not so great jobs and wait until they reach the point until life hits a turning point called FI. It’s a long wait where we are accumulating money slowly in order to feel not only financially free but free to finally pursue our dreams as well.
So, I have been thinking about this quite a lot. And if we want to become FI, then quit our jobs, and do it the steady but slower way, a.k.a. save, invest and generate passive income. It would take us at least 15 years before we get there.
15 years of waiting for something you’re hoping to reach. A long wait where you have to give it your all to get there. Including the not so great job. Would you be willing to work your ass off for 15 years, in order to live the life you really want…? Don’t think so.
Working to reach FIRE is creating a life you want. But you also have to stick with a life you don’t want in the beginning. For some of us, that is.
I’ve seen a lot of people around here that are motivated to reach FIRE because they don’t like their current job, and sometimes even hate it to bits. It’s easy to say to just find something else, not all can do that. But if you had that opportunity, would you take it?
By focusing so much on the investment side of growing wealth and a passive income. I’ve forgotten the most important thing to increase your income.
Still being in the early phase of investing, while our portfolio is just starting out to grow, getting there little by little. Our highest returns from investing will be happening in the long run. When our dividends would have been reinvested over time and growing to new heights, as is always the case with compounding interest.
In this phase maximizing your income is the best thing to do. Or as Zach from Four Pillar Freedom says it very nicely, become an income machine instead of an investment guru.
His article was just published when I was writing this article, and his message is so important for many: If you’re still young, growing your income is the most important, because you can build up a decent lump of cash before investment returns can even begin to matter.
For me, the best possible way to increase my income is to focus on growing my career.
Early retirement and building a career, not a good match?
Since I started this blog last year and got to know more about the whole early retirement thing. The goal of reaching FI slowly became more important than putting in the effort on moving myself forward in my career. And I kept thinking. Was it really possible to quit my job one day? Do I even want to quit my job? Is it still necessary to have a career in the first place? Just sit out the ride and wait for it to happen? Would I be willing to let my career go to waste? Well, the answer is no.
Working on building a career and pursuing something like early retirement can be a huge contradiction. My current job is a job which I love, but also gives me a lot of stress, and tired moments at some points. In those times I could really use a break. I also noticed that the ‘bad’ weeks happened because, at that moment, I didn’t put in as much effort as needed. That feeling to need to put in at least some effort was gone. But when I did put in the effort to my work, I felt much more rewarded and had better results. And I want it to keep it that way.
If you’re still young, having a fun or decent job and are already thinking about early retirement. Don’t fix your focus too much on quitting. Because if you feel that way already, you will never be able to get the most out of your time now.
Can we do both?
We won’t stop with investing. But early retirement won’t be the goal anymore. Financial freedom will be. We don’t know yet what we will do when we reach the FI moment. We also don’t know when we will get there. And why bother to make a detailed plan with how much we have to invest each year in order to reach FI at year X? We see what happens when we get there. Having the goal in the first place is enough. It will form most of our decisions and actions involving money. And it will give us enough flexibility to change our strategies and actions to what’s most important now.
In the meantime, building a career or at least growing my professional life is equally (if not more) as important as investing. We will both work on our careers so we can maximize our income as much as possible, and create something we enjoy at the same time. Step by step. We like to work, and we like to invest. Why can’t we do both?