A bay in Washington State

The Mindset of Financial Independence

Yesterday I sat with a group of about 24 people who are working towards Financial Independence. We went around the table and asked everyone why they are working towards financial independence. The overriding theme was freedom.

Some wanted the freedom to have a job that was meaningful to them even if it didn’t pay much. Others wanted to be able to volunteer. Some mentioned security against IT jobs that quickly change that people age out of. Others enjoyed the security of knowing that if they lost their jobs they would be just fine. Others, like us, wanted to travel more. It all boiled down to freedom of choice, freedom from stress.

It was great to get together with others who wanted to talk about money, a taboo subject in American culture. One thing that happens often in our ChooseFI online forum is celebrating together. Almost every week someone will post, “I just paid off all my consumer debt! I’m so excited, but this is the only group I can share it with!” Everyone jumps in with congratulations and virtual wine bottles popping. The sad part is they are right. If they share this on their personal profile many of them would be met with “it must be nice to be rich,” or some other derogatory comment dripping with jealousy.

What if you don’t like numbers?

Does this freedom sound tantalizing to you? What if you can’t stomach reading financial posts filled with numbers? Does having to watch the stock market, or sit down and look at a daily budget daily make you fee nauseous? What if you hate numbers, can you still be financially free?

Of course you can!


Three Key Mindsets behind Financial Independence

You don’t have to love the numbers, because financial independence is far more about a frame of mind than it is crunching numbers. Someone can crunch numbers all day long and still not reach financial independence while others having never crunched numbers have made it there.

1. The Mindset of Contentment

Contentment is a state of happiness and satisfaction. It is not complacency. Complacency does not gather satisfaction from life, instead, it is an attitude of settling with the way things are. There is a subtle yet very distinct difference. Complacency makes us sit beside the road and watch life go by. Contentment is a satisfaction within our journey.

Some argue that we should always be discontentment if we want to achieve great things. They are right that discontentment is a great driver of change. At some point(s) in our lives, it might be necessary to change direction.

But do you really want to live a life of discontentment? Personally, I’d much rather achieve a goal a year later and be happy in the years leading up to it. Constant discontentment can also cause us to abandon the journey at some point. Contentment allows us to focus in on just the things that need to change and glean joy along the way. It can keep us going for years on end.

I’ve seen companies that, in their narrow focus to drive toward greater achievements, have treated their employees poorly and cultivated discontentment among them. I’ve also watched those same companies lose their most innovative employees making it even harder for them company to achieve their goals.

La Jolla California
Pure contentment sitting on the shore line of La Jolla, California

What is contentment?

Contentment is seated in gratefulness. It is focused on the good things in our life, not the things we don’t have yet. It is joy now not just happiness later connected to some distant achievement. It’s being able to enjoy a used car. It’s being able to love the stuff you have without needing more to be happy.

It is also not looking down on others who do have a new car. That might be their mini vacation that they get to take every day to work. Contentment looks at what you have, not what others have.

It should not overlook the things that need to change. There still needs to be an honesty about life not being perfect. Contentment is enjoying the journey of learning and growing and even achieving great things.

Contentment is knowing that we can achieve our purpose in the journey not just at the ultimate goal.

The path to financial independence is littered with achievements along the way. As we went around the room yesterday each person talked about their journey. Most in the room were still on the path to financial independence.

One man sitting next to me talked about how he recently was three months without work. He said he really enjoyed those three months. Stress was minimal because he had enough savings to cover his expenses. He knew eventually that he would need to go back to work since he wasn’t fully financially independent yet, but he was far enough in the journey that it was already reducing stress in his life.

What if I’m discontent now?

Discontentment doesn’t mean you are failing. Sometimes discontentment is an indicator that you need to make a change. Sometimes we all need a big push.

I struggled with discontentment for nine years during my first marriage. It was a struggle and I constantly beat myself up because I did not have peace. I thought that I could find contentment in any situation, and I was simply wrong. It was this growing discontentment, the breakdown of everything I clung tightly to, that led me to drastically change my life. I literally walked out on everything I knew, including “friends.” It was exactly what I needed to do at that point in my life.

Having broken free of that old life, I found contentment immediately. Even sneaking into an empty office at work to sleep at night was enough for me to be content. I made a drastic change and the journey from there was not easy but I found peace in it.

So don’t beat yourself up, but do take a long hard look around and ask yourself. Do I need to learn contentment or do I need to make a change? Only you can answer that question.

A tent set up in green grass next to a creek
Camping, content by the creek in Vermont

Why contentment is so important

Contentment changes the frenetic striving for more into an exciting journey of purpose. “More” is like tomorrow. It may never come and when it does it is never enough. The path to financial independence is a journey. We may have an ultimate destination in mind, but it really is all about the journey.

How sad would it be to reach the goal of financial independence and arrive without your friends or family because you left them behind in the pursuit? How lonely to cross a finish line and find that no one is rooting for you at the end.

When Trinity and I went to Iguazu Falls we absolutely loved the beauty of the falls, but I admit it was a little disappointing. The walk up to the falls was unremarkable, the journey was ordinary. On the other hand, hiking for days to reach Torres del Paine was a much more rewarding experience. The journey there was amazing.

Contentment allows us to focus on our purpose and not be discouraged along the way. Every step towards Torres del Paine was made to get us closer to our ultimate goal, but we stopped many times along the way to drink in the beauty. Every step was beautiful.

2. The Mindset of Giving

It may seem contrary, counterproductive even, to think of giving as part of the path to achieving financial independence. But I believe it is key to our mindset about money.

Contentment is rooted in gratefulness and gratefulness can be learned by giving. It helps us see the world around us and realize how much we truly have.

Money is only a tool. What is it that people truly want when striving towards saving a million dollars? It’s freedom, security, maybe even respect, love, or happiness. It’s not actually the money itself, it’s what that money can do that people strive towards.

Giving is how each of us can be a part of making our culture better which in turn impacts us directly.

Building a home in Port-au-Prince Haiti after the catastrophic earthquake in 2010
Building a home in Port-au-Prince, Haiti after the catastrophic earthquake in 2010

What happens when we are not generous?

Our visit to Bolivia was eye-opening for us. Although we met a lot of very nice people, the overall culture was one of taking not giving. It was a looking out for self above all else. This is a country with so much to offer yet many tourists are hesitant to go, for good reason.

Many of the tour and bus drivers drive drunk. Many that we did business with cared only about getting money from the tourist. After the money was exchanged they cared little about customers actually getting anything for the money (Torotoro was the one place in Bolivia that was different, they truly understood preservation of natural beauty and treating others well). Because of this, they hurt their own business, they hurt their own country. People treated well come back. We don’t ever plan to go back to Bolivia.

I have to admit that I feel more generous to those who are generous to me. The waitress that cares about our experience and enjoyment is the one who gets the biggest tip. Yes, I know we should be generous to all around us, but this is human nature.

If you are looking for inspiration on giving on of my favorite bloggers Ms. Fiology just wrote an article about 9 ways to give.

3. The Mindset of Having a Purpose

Last but probably the most import of these three is purpose. Purpose is the reason for doing what we do. It defines our intention and our objective for life. Purpose transcends goals, a job, and daily activity, and it impacts how we make every decision.

Purpose is not a goal in itself, it is the reason behind goals. Everyone defines purpose differently. For me, it is more about who I am, not what I do. It is about character and being of value to others.

Uly and Xandra at Horseshoe bend Arizona with quote "The mystery of human existence lies not in just staying alive, but in finding something to live for" -Fyodor Dostoyevsky, The Brothers Karamazov
Uly and Xandra at Horseshoe Bend, Arizona

How do you find purpose?

Many often tie purpose into our personal strengths and finding what we have to offer the world. At our meetup yesterday someone asked, how do we find our purpose.

One of the attendees, Sylvia Moe Inks, offered us a great suggestion:

“Poll your friends and ask them what you are good at. What type of things would they come to you for help with?” She did this a few years ago and as a result, started a successful agency for business owners. She even became the published author of Small Business Finance for the Busy Entrepreneur.

I’ve asked others before, “What do you want on your gravestone? What do you want to be remembered by?” That often sheds light on your purpose.

Purpose is deeper than Goals

In my last job, we used to joke about how one of the consulting agencies we worked with would do exactly as we asked. If we had given them specs to build a car and forgot to ask for a door they would have built the car without a door. They could check every box off on the goal list, but they forgot the purpose of the car.

Checklists are a great tool in helping us achieve a goal, but it is important not to lose sight of the actual purpose for the goals.

Breaking down a purpose into goals is like a company who wants to produce excellent customer service. They could set goals of reducing the time that customers are put on hold, or lowering the number of unresolved incidents, but unless their agents buy into the purpose they could still end up with poor customer service. They may focus more on closing the ticket regardless of whether the issue was resolved or not.

If our purpose in saving money is freedom from stress and risk then adding too much stress in an unsustainable savings rate doesn’t really make sense.

It’s a Lifestyle

Some people can achieve financial independence by living a frugal lifestyle driven by a list of rules and a meticulous tracking on spreadsheets. But how much better would it be to arrive at financial independence after a journey of contentment and a spirit of giving motivated by a life of purpose – a purpose that can be achieved even if financial independence is never realized?

Don’t get me wrong. I love my spreadsheets and frugality, they can be part of a journey of purpose. I’m just saying they don’t have to be and they should not be the driver.

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16 thoughts on “The Mindset of Financial Independence”

  1. I love this for so many reasons!

    It is a bummer that the celebration of achieving FI cannot be appreciated by all.

    I particularly love this line, “ But how much better would it be to arrive at financial independence after a journey of contentment and a spirit of giving motivated by a life of purpose – a purpose that can be achieved even if financial independence is never realized?” Um, yes x 1000

    Thanks for the shout out! #GreatMinds

    Reply
    • Thank you Deanna! Yes, I wish we could all celebrate together.

      The journey thankfully doesn’t end at FI, it just gets better with every step. I’m glad to be in this journey with you.

      Reply
  2. Love, love, love this blog. You are absolutely right on every point. I personally am on this journey towards FI. For me, the first thing is an emergency fund so that I don’t have to worry about “what might or might not” happen. No debt except for a car pymt, which is good. But love the part about contentment. That is different for each individual. Just wish that the “world” would talk more about this and money. Maybe there wouldn’t be so many suicides. If people could be taught what to do with money, then maybe, just maybe, they would be content. Giving is so important. Doesn’t matter who or what you give to but give. Even if it is just to pay for the coffee for the person behind you at your favorite coffee shop or drive through. What a thrill it brings to my heart to do that. And you may just make that person’s day as well. By giving, I think that it draws our minds away from wanting to “spend” and to seek to put away more money to be able to give more. And take “baby steps” in your journey to FI. Celebrate each and every little goal/baby step that you accomplish. It will help you stay focused. But you hit it on the nail about purpose. No matter what you do in life, whether to reach FI or something else, you must have a purpose or else you WILL fail. Keep the blogs coming and thank you for sharing about money/FI which the world doesn’t want to accept on social media.

    Reply
    • Hi Jackie, I’m so happy to hear that you are on the path to FI, that emergency fund is so important and really does relieve a lot of stress. Thank you for taking the time to write out your thoughts. Next time I’m in your area I’m going to try and be the car behind you at the coffee shop and hope for free coffee. 🙂

      Reply
  3. I’m far enough along in the journey that my time is becoming worth more than money.
    I’m thinking about scaling down work and going part-time next year. (Maybe the year after…)

    Reply
    • That is awesome to hear, congratulations on the progress of your journey. Time is the greatest luxury. I’m finding that out more and more everyday.

      Reply
  4. Thanks for writing this. I frequently beat myself up if I do not meet my goals even though I know that I’m doing very well maybe because of my discontentment to what I have achieved. I always have this nagging feeling that it’s not enough and I just realised how unproductive and how unfair that action is to myself.

    Reply
    • It’s is such a fine line sometimes between pushing ourselves more and beating ourselves up, but you are exactly right beating yourself up is unfair and unproductive. I’ve certainly done it to myself as well all too often. I try to remember where I was and where I am now. Good luck on your journey!

      Reply
  5. So many truth nuggets in this post (and I can’t wait to read all of your posts)! I especially am struck by your question, “Do I need to learn contentment or do I need to make a change?” So much of life comes down to this. We can’t jump to a new job or relationship every time we become unhappy with some aspect of life, but sometimes more than just an attitude shift is needed. Being able to discern the right times to rest contentedly versus the right times to make changes is a key life skill. Thanks for the insights!

    Reply
    • Thank you for your encouraging comment. It is difficult at times to know if a change of attitude or circumstance is needed as you said and sometimes it’s a bit of both, it is very personal. Life can be so interesting and yet so beautiful.

      Reply
  6. I agree to all 100%, modestly and frugally but uninteresting, or perhaps with the struggle, but with the achievement of the goal. I choose the second option.

    Reply

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