If you are anything like me, at first discovery financial independence seems like a straight forward goal. Have enough money to live off for the rest of your days.
But a combination of lifestyle inflation and mental biases has meant a continual shifting of the goalposts for me.
lifestyle inflation and financial independence
Regarding lifestyle inflation, when I first discovered financial independence I was in the early stages of my relationship with my now wife. Once we got married the goalposts of how much we needed shifted out. It takes a lot more money to be financially independent as a couple than it does as a single person. Even more once you add kids. A year or so later we have our first child. Then another couple of years later our second child. All of a sudden our financial independence target has grown by about three times the amount as when I was single. That is a lot of years extra savings needed.
This is by no means a complaint. I am infinitely more happy than I was back then, with a family I am incredibly proud of. All I am saying is that life costs a lot more now due a change in our circumstances.
We have already had to purchase a bigger car as a result of kids. We will also need to have a bigger house in the next wee while too. These are huge additions to our expenses. On top of that there is the extra annual expenses for kids. For this age, the biggest is daycare, health insurance, and food. Although, we are now spending a lot on our 4 year olds activities – Swimming, gym and ballet. Let’s hope they aren’t interested in horse riding when they are older 😊
Then there are also the questions of if and how we want to provide for our kids in their older years, regarding education and possible help towards their first properties. Finally, thoughts also turn towards any inheritance we may want to leave.
Some of these expenses are of course entirely optional, and being in a position to even be able to think about helping kids with education and housing is a privileged position, but they are possible costs nonetheless that have an impact on our savings needed for retirement.
when to take the leap towards financial independence?
These constant changes now have me guessing when I should pull the plug on my main job. Many of you who read the blog are probably aware that I am working two jobs. One full time job as an Operations Manager which is ok, but not thoroughly enjoyable. I have a second job as a financial adviser which is currently part time, and this is the job I am incredibly passionate about and want to transition to. The latter could easily provide enough if I changed the business model to most others in the industry that pays via commissions and conflicts of interest, but I will not sell out.
I have been going through an internal struggle of when to leave the security of my main job. Independent financial advice can provide some volatile income. January, April and December tend to be very quiet months in the holidays. Whereas, it is nice knowing I have another job providing steady income. But the time commitment is not sustainable. I want more time doing the things I want to do and having two jobs is in direct opposition to my desires.
Financially speaking, I could probably leave my main job already and just focus on the financial advice. But it is hard to leave. Having a family changes things completely and I don’t have the same confidence I did when I was younger to take leaps of faith. We are responsible for more than ourselves now. I keep saying to myself I will do it in the next few months and then a few months come along and I am still here.
I would say the biggest thing holding me back is the cost of building a new larger house, along with the desire to provide for our kids.
Every month, new build costs are rising and I feel like it is the prudent thing to do. If the extra costs don’t eventuate then great, but if they do at least we are prepared. There is also the fact that it is so difficult getting a mortgage on a lower income, even if your assets are healthy. I could be working longer than I need, but I could also be covering any extra costs. We won’t know until any new build is complete.
I feel like I am doing the right thing for the family, as I would rather work hard now and if we end up with a bit more money than we needed then even though I may have lost some extra time with the family, it is better than leaving my job too early and not having enough money. As I said, I am not as tolerant towards risk now that I have a family.
Sorry if this blog post is a bit over the place but it really is a reflection of my current thoughts. Back and forward and all over the place. But I hope it is valuable to others who may be feeling the same.
I feel like I have a good grasp on what ‘enough’ is for our family. But it is a hard concept to follow through with in practice. Semi retiring in your early 40’s is going against the grain. Leaving a secure full time job to focus on a small business is going against the grain. When we are fighting what is normal, is why I may be finding the jump hard to make. I don’t have lots of real life examples to follow or take some confidence from. And if very few others are doing it, then things feel that much harder.
But, at the end of the day, I just need more confidence in the plan. Even though what I am doing is not normal, I know we have worked up to this through some good habits and planning. I am doing this to spend more time doing the things I love and less time on things I don’t love. I am not prepared to be stuck inside a cubicle for another 5 years, let alone to my 60’s. My kids are now almost 5 and 2, and I am not going to miss out on them growing up.
I can’t keep pushing the goalposts further. Younger me would be stoked with my current position and progress. My desire for a well rounded life is much stronger than my desire for more money and more work, and I know my desire to semi retire will win out. And soon.
There will come a time when I feel more comfortable to take the leap and I will know when that time is, and I will be happy with the decision because I have done the financial preparation. I just need my mental preparation to catch up!
If I still haven’t made the decision by 2024 I give you all permission to push me!
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The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here