- There's a big problem with the financial independence,
retire early movement and we need to talk about it.
If you've followed this channel for long enough,
then you know how much I love
financial independence, retire early.
I think that it's great and I also think
that everyone should be pursuing it in one way or another.
Let's be honest, if I could wrap financial independence up
like a Chipotle burrito, then you're darn right I'd eat
that thing, but I also know that if I'm such a big advocate
for something and I've invested a lot of time
and energy into it, then there's a 99% chance
that I'm a little biased, possibly too biased.
Because I'm a sucker for pain and discomfort,
I decided to challenge my own beliefs to take a look
at what are the downsides of someone pursuing
financial independence or achieving financial independence
and early retirement?
The goal of this video isn't to trigger anyone so calm down,
but I think it's always healthy to really take a step back
and ask yourself, knowing the upsides and downsides,
does this really make sense for me?
No one wants to end up becoming that guy
or girl who's so stuck in their ways of thinking
that they automatically dismiss any other opposing views.
No names please, Dave Ramsey.
Excuse me, I had a little something something in my throat,
and let's be honest, those types of people
are gonna be the last ones that we invite
to our next Star Wars watch party.
Wait, you mean Star Wars watch parties aren't
as common as I think?
Okay, I guess I'm living in a bubble then.
Now, you might hear the things that I say
and think to yourself, Jarrad, you're an idiot.
I'm not worried about any of those things happening,
and that's okay.
I've been called much worse by strangers on the internet,
but if you aren't one of those people who call me bad words
on the internet, then please do me a huge favor
and Hulk smash that thumbs up button to help support myself
and the worst squirrel hunter in the world, my dog, Molly.
For those of you who don't know, financial independence
is when you have enough money set aside to live off of
to where you can choose whether
or not you want to continue working.
This would usually be called retired for most,
but of course the younger generations had to come along,
question an old way of thinking, and give it a hip,
cool name like financial independence.
Now, technically, someone like Elon Musk
is financially independent because he's got enough money
to do whatever he wants, but he still chooses
to work on very childish things like building rocket ships
and very futuristic cars.
Don't worry though because average people like us don't have
to have Elon Musk money to achieve FI.
He's just an over-overachiever who's decided
to change the world in his free time.
The things you need to do to become financially independent
really aren't difficult.
It's a mixture of saving more, increasing your income,
and growing it through investing.
I've been fortunate enough to meet a lot of people
who have been working towards this
through just about every method that you can think of.
Promotions through work, lowering living expenses,
real estate investing, stock market investing,
starting a side hustle, starting a side business,
and anything else that you can think of.
The ones who see the most success are usually doing
at least two of the things that I mentioned.
Now, I have a whole bunch of other financial independence
videos to help you out with these sorts of topics
that I'll link up in a playlist for you
to check out at the very end of this video.
There's a ton of sacrifice involved
with the pursuit of financial independence.
So many things have to be given up in the short-term
by anyone on their FI journey compared
to someone pursuing a normal retirement age.
I'm not gonna try to sugarcoat the whole thing.
It's a pretty darn difficult thing to do day in and day out.
If Timmy doesn't plan on retiring until the age of 65
and Jimmy plans on being able to leave work
by the age of 45, then Jimmy naturally has
to give up quite a few more things than Timmy does.
Now, this could be in the form of time and or money.
To speed up the process by 20 years, Jimmy is gonna have
to most likely spend more hours making money
so that he can invest and grow it.
He's gonna have to quote, unquote give up money
in the form of spending less money on things
that the average person does.
I know this sounds like a huge sacrifice and I'd agree
that it is at first, but if that goal of having the option
to choose whether or not you want to work is that important,
then it just becomes your new normal.
Giving up that super nice car or more expensive home
could free up a few $100 extra every single month
for you to throw towards investments.
If you and your significant other aren't prepared for this
and okay with these sorts of sacrifices,
then this whole process is going to be very painful
and I recommend not pursuing financial independence
because of it.
I was talking to a buddy the other day
about money and investing.
Now, this is something that we talk about every single time
that we're together because we both just enjoy it
and we're strange weirdos like that, but if the thought
of money and your finances gives you anxiety,
then you're going to absolutely hate financial independence
because it's something that's always on your mind
as you go through the process.
I personally believe that thinking about your finances
on a regular basis is healthy, but I'll have to admit
that financial independence people are probably thinking
about it way more than the average person.
I can see how this could evolve into pretty unhealthy habits
and a little too much questioning
of every single dollar leaving the bank account.
There's definitely a balance between knowing
when it's okay to spend a little bit of money
in certain areas and when it's not.
You'd be surprised, but I've had to talk quite a few people
off the ledge and give them permissions to spend some money
on fun things that improves their happiness
because they're doing the right thing
with the majority of their money.
Overmaximizing and obsessing where the next dollar is going,
eking out an extra 1% on your investments,
or jumping through insane amounts of hoops
to increase your savings rate by, we'll say 1%
can cause you to take it just a little bit too far.
I've hit an 83% savings rate and I am content with that.
So I've completely stopped trying to cut costs
anywhere else in my life to try to increase that.
At this point, it just doesn't make sense
and will most likely start reducing my happiness
if I even try to.
For me, the only way to increase my savings rate anymore
is by increasing my income and that is something
that I'm always working towards, but I've chosen
to pursue more money doing things that I enjoy
as opposed to doing things just for the money.
The concept of financial independence is such an outside
of the box way of thinking that it can be a huge turn off
to people who aren't a part of the community,
don't truly understand the reasoning behind it,
or are just straight-up jealous.
This can cause them to stop interacting with you,
start judging you more, or even sabotage you
in one way or another.
I've seen and heard about blowback others have received
from sharing that they're pursuing financial independence.
To people like us, this makes no sense at all.
I'm personally a pretty open-minded person
who loves seeing other people win and do better
because their success doesn't take away from my success,
but not everyone looks at things that same way.
If you're doing really well in your life, then they want
to tear you down because they're jealous.
Even though that person can technically pursue
financial independence like you, their perception
is that they can't, and one painful lesson that I've had
to learn over time is that perception is reality.
If you are someone who is or going to be pursuing FI,
then I highly recommend not sharing it
with too many people outside of your immediate circle
who you know won't be judgmental.
I hate to say this, but you're better off finding
a more private financial independence, retire early
community to discuss more sorts of topics like that.
I'm just thinking about this now, but if enough people
are interested, then maybe I'll create one
so more of us like-minded people can nerd out
about financial independence and early retirement
in a closed, private community.
How about this, I'll put a link in the description
of this video to get your name on a list of people
who would like to be a part of this potential
private community and we'll see what happens.
I've kind of screwed myself in two ways
by having this YouTube channel
and being a public figure on the internet.
People in my personal and professional life
who are aware now know
that I'm pursuing financial independence.
They also know that I make money on the side from YouTube.
I haven't noticed much blowback from mentioning
financial independence before, but I have noticed questions
arising as to whether or not my YouTube channel
is affecting my professional life, and because of that,
I now have a personal policy with this.
If someone has never heard about my YouTube channel
or my pursuit of financial independence,
then I keep my mouth shut.
I can't do anything about the people who already know
about those things, but I can do something
about sharing very, very little about my personal life
and what I do outside of my main full-time job.
To be honest, this is one of the main reasons
that I'm public with only a few
of my smaller investment accounts on this channel.
At this point, the cost outweighs the benefits.
As much as I'd love to admit that everyone else has as good
of intentions as me when it comes to wanting
to see other people win, they don't
and I'm done trying to change people's minds,
and this is why we can't have nice things.
Based on stats, the average person is gonna reach
their peak income level in their 50s.
Now, this could be a big issue for someone expecting
to be financially independent in that age range or earlier.
If you choose to take a lower-paying job when you reach FI,
then you're leaving some serious money on the table.
Now, I'm not saying that this is a bad thing
because hopefully you're at least choosing to do a job
because you enjoy it rather than for the money,
but we can't completely ignore the opportunity cost
of financial independence from that perspective.
As much as I'd love to pretend that there's a clear-cut path
to financial independence, there's not.
Now, I think that most FI people are
what we call quote, unquote planners.
They've laid out a plan of how much needs to be set aside
and for how long to reach that final dollar amount.
So you get started down the path and boom,
everything gets screwed up, and as we all know,
unpredictable stuff happens throughout life
that completely changes the direction that we're headed.
If you're too married to the idea of financial independence
and something happens, then you're going
to be extremely disappointed, depressed,
and probably resent the thing that prevented you
from achieving financial independence.
My suggestion is to curb your expectations
just a little bit.
While I'm someone who is working towards FI,
I don't think about it as much as you might think.
Now, sure, I do the things needed day in and day out
to reach it one day, but I don't have a set date
on the calendar that I'm working towards.
One thing I've found to help me with this
is something called premeditatio malorum.
That's a mouthful and I'll explain it.
Now, I'd consider myself a student of something
called stoic philosophy for about the past,
I'd say eight years or so,
and that's where I got this concept from.
I actually have a coin that I carry in my pocket
as a constant reminder of premeditatio malorum.
What Seneca, one of my favorite stoic philosophers,
said about premeditatio malorum is, what is quite unlooked
for is more crushing in its effect,
and unexpectedness adds to the weight of a disaster.
This is a reason for ensuring
that nothing ever takes us by surprise.
We should project our thoughts ahead of us at every turn
and have in mind every possible eventuality instead
of only the usual course of events.
Rehearse them in your mind, exile, torture, war, shipwreck.
All the terms of our human lot should be before our eyes.
This is the stoic exercise of imagining the things
that could go wrong or be taken away
from us to help us prepare for some
of the unforeseen future setbacks.
Now let's talk about one of the more scary
and unknown downsides of financial independence
and that's your health declining sooner than expected.
We've all heard about or experienced firsthand
someone getting sick or coming down with a disease
that absolutely flips their life upside down.
Now, it's not fair and it's not fun, but it's a reality
of being born in these very flawed, squishy meat suits
that we're all walking around with every single day.
I don't know if it's just because I'm getting older or what,
but more and more, I think about how insanely vulnerable
I am as a human going through my daily life.
I'm just gonna openly admit something
that will definitely make me look
like an absolute weirdo, but whatever.
I think about death and dying probably more
than the average person, and moments like driving
on the highway still mess with me.
Heck, if you look behind me on my bookshelf, I have a skull,
I have a picture of a skeleton shooting an arrow
at the person looking at the picture,
and a monkey thinking while staring at a skull
as a constant reminder of my own immortality.
Go ahead and roast me in the comments below.
I should probably be a goth chick or something.
If you get to a point in your life where you choose
to reduce your income because of being
financially independent and you get deathly sick,
then your finances are going to be in an even worse position
than they would've been if you had just stayed
at that high paying job.
I wish I had some words of wisdom for you here, but I don't
because it's probably gonna be one of the biggest unknowns
with pursuing financial independence.
The best suggestion that I have is try
to continue incorporating healthy habits into your life.
Regular physical exercise, consuming healthier foods,
and continuing to challenge yourself mentally
to keep that big brain of yours in tip top shape.
Outside of that, there's really nothing else
that you can control and it's all gonna be left up
to fate and luck.
Make sure to hit that thumbs up button
and check out the description of this video to get
on that FIRE community waiting list
and down there I'll also have links
for you to get some free stocks as well.
Watch these FIRE videos to your left next
and I'll see you in the next one, friends, done.