How Much Is "Enough" to Feel Free?

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The F2P clan had the pleasure of hosting a number of few freedom seekers/freedom achievers* this summer.

Our small group of five met up over dinner, most of us never having met in person before. We had no agenda, no expectations, just a shared curiosity and similar interests when it comes to money. Discussion topics included work (type/how much), saving, spending, travel and other aspects of the FI lifestyle.

It was a great deal of fun and gave me some food for thought. 

Something to Chew On

One particular part of the discussion resulted in a “lightbulb moment”:

There seemed to be no single definition of financial independence (either lifestyle or what's deemed “enough”). Views around the table seemed to run the gamut from perpetual semi-retirement (supported by part-time work) to never needing to work again.

I think of FI as the option of never having to work again if we so choose, but others around the table viewed it more as the ability to be choosy about the type of work we do and having the financial fortitude to take a risk and try something new without worrying about money in the near term. This view was supported by the idea that the chances of generating absolutely no earned income for decades to come is unlikely for most of us. 

As additional support for the idea that there’s no hard and fast definition of FI, we found that the question of what is enough is nebulous at best. “Enough” is often based on a general rule (25 times your yearly expenses should be “enough”), which itself is based on certain assumptions (expense needs won't change, returns and inflation rates will not fluctuate beyond a certain range, the principal will be safe). No matter what, we can never be 100% certain that our estimates will hold for decades to come. That leads some to take the leap before reaching the “rule of 4%”, others to do so only once that sum is amassed, while others still feel they need to pad the nest egg further to reach a greater level of emotional comfort…unfortunately, sometimes in perpetuity. 

Based on this variability, I couldn’t help but be moved toward an understanding that FI is more a state of mind than a net-worth-to-yearly-expenses calculation.

It’s A State of Mind

Being financially independent on paper means nothing if we don’t feel we have enough; if we feel vulnerable, worried, anxious; if feel we’re “stuck” until some future time when our worry will miraculously subside.

Financial independence, it seems, boils down to a belief that we’ll be OK. It’s a belief that we can be resourceful, self-sufficient; that we have access to the resources we need to live the good life and have few, if any, people to answer to when we make life choices. It means we have the wherewithal to say “no” to what feels like obligation and the confidence to say “yes” to what feels like opportunity. That’s what freedom feels like.

Feeling financially independent is more than having reached a specific number. It needs to be part of the right mix for you.

This mix includes:

Though the categories seem to be common to us as FIers/FI seekers, what would fills them varies wildly. Case in point: I’m quite sure that none of us around the table would have been willing to trade places. We all want and value different things as part of “the good life”.

What's your definition of "enough"? What does/would it take for you to feel free?

*A group of people not shy about talking about money decisions that, one hopes, leads to a better, more fulfilling life.

Image credit/copyright: graur razvan ionut/freedigitalphotos.net