To me, the ultimate reward for achieving financial independence has nothing to do with money; it is having the time to be able to do exactly what I want to do with my life.
When I first started on my journey to FI, I didn’t really consider what my life would look like when I reached my goal. I just started accumulating as much money as I could without thinking about where I was going or how exactly I was going to get there. Being able to quit my job seemed like the finish line so I didn’t really consider what I’d do after I crossed it.
I noticed along the way, however, that not having a defined goal or vision made it much easier to get sidetracked.
I decided to compute my FI date so that I would at least have a date to work towards and I could use that date to see if I was staying on track.
This plan worked quite well and I was progressing nicely but I still didn’t know what I’d do after I reached FI.
It was shortly after computing my FI date that I put on the Mad Fientist lab coat for the first time and discovered even more fientific power and drive than I had before. With this newfound power, I began rethinking my plan and strategy.
Sure, I could just keep living the same life that I was living and easily reach FI within 5 years but why should I wait so long when I could head to the lab and develop a new strategy to reach FI sooner? Plus, what’s more interesting to read about…someone who is easily reaching FI living their normal life or someone who is experimenting and optimizing in order to reach FI in half the time? Both scenarios are amazing but I think I’d prefer to read about the latter.
So now, rather than accept the FI date that I computed from my current income and lifestyle, I’m deciding when I’d like to reach FI and what I want my life to look like when I get there and I’m going to adjust my current lifestyle to meet those parameters instead.
There are a few reasons I see this as being beneficial.
If I have a clear picture of the life that awaits me, it will be easier to make more difficult financial decisions and sacrifices in order to achieve that ideal life as quickly as possible.
My first FI date was computed using my existing spending patterns. Obviously these will change dramatically once I no longer have to work for a living so by thinking about my post-FI life and working backwards, I should be able to come up with a much more accurate FI date.
Reach FI Sooner
Knowing what I plan to do after reaching financial independence could also allow me to start living my ideal life sooner.
For instance, since I plan on working part time after I reach financial independence, it makes sense to factor that part-time income stream into my FI plans and bring my FI date closer.
A Perfect Life
“Planning is bringing the future into the present so that you can do something about it now”
For the past few months, I’ve been thinking about my perfect life (I obviously included my wife in the discussion, since it’s been shown that 80% of a man’s happiness depends on whether or not his wife is happy).
When you really devote some effort into envisioning your perfect life, it’s actually much harder than it seems. Every time I would think I figured everything out, I’d usually find some sort of flaw that would make me rethink my plan.
After spending some time failing to really cement a clear picture of my ideal post-FI life, I decided to step back and think about what in life is really important to me.
I whittled down my list to the following categories:
This was the easiest category to settle on. I am happiest when I’m around people I love but since I live far away from most of my friends and family, I don’t get to see everyone as much as I’d like. Post-FI, I plan on changing that.
There is nothing more exciting to me than experiencing a new place for the first time. Traveling has changed my life and besides money/finances, traveling is what occupies my thoughts the most.
If you’ve ever struggled living below your means, just travel to Asia or Central America and see how hard people work for so little (and notice how happy so many of them are). I can almost guarantee, you’ll come back and realize you don’t need whatever stupid thing the TV is trying to sell you.
My brain is my most important asset so I want to continue to stimulate it after FI. I will finish my Free Ivy League Degree in 2014 and after all of that brain exercise, I know I’m going to want to continue beefing up my gray matter.
The main reason I’m not satisfied with my job is because I feel like I’m just a cog in a wheel and I’m not really contributing anything to the world. If I died, I’d be replaced with another competent software developer and life would go on.
I want to create something that impacts the world. I want to create something that will be around after I’m gone.
Build a life around what’s important
So after settling on those four categories, I then worked with my wife to structure a lifestyle that incorporated all of those things.
Here is the glorious result of that work…the perfect life.
Our Perfect Life
Since I want to complete my master’s degree and my wife, who is Scottish, wants to apply for US citizenship (so that we never have to deal with American visa issues again), we are going to stay where we are, doing what we’re doing, until 2015. After that, it all changes.
We’re going to sell our house, cars, and most our belongings and execute what we’ve been calling our 3-6-3 plan.
The 3-6-3 Plan
Because my wife’s friends and family live in Scotland and my friends and family live all over America, we’re going to split our time into three and six month increments.
The First 3
The first three in our 3-6-3 plan will be three months living in America. This time will be spent traveling around the country visiting all of our American friends and family.
Seeing friends and family only around the holidays every year doesn’t cut it so having a full three months every year to properly catch up with the people we love in America will be incredible.
The six month period will be spent in Scotland, seeing my wife’s family and friends and also working. Since My Wife’s Not a Fientist, she’s going to continue working after 2015.
She is a fientist in the making though so she’ll easily be able to earn enough in six months to sustain herself for the entire year (while also building her savings) so the six months in Scotland should be the only time she’ll have to work during the year.
While she works, I plan on exploring a few business ideas with one of my friends who lives in Scotland.
The Second 3
The final three months of the year will be spent somewhere else in the world.
When we travel, we really like to experience the local culture and usually a couple of weeks vacation doesn’t really cut it. Therefore, we plan to live somewhere, as locals, for three months every year.
One of our goals is to learn another language and I believe living somewhere where the language is spoken will be one of the best ways to do that.
Travel is usually costly due to the inefficient nature of most traveling. When you spend a lot of money on a plane ticket to fly thousands of miles, stay in an expensive hotel, eat out every day, then fly back home a few short weeks later, the cost per day is usually extremely high.
By living somewhere for three months, however, we’ll be able to get an apartment, immerse ourselves in the culture, travel locally to see the surrounding area cheaply, and potentially spend less than we would living in America or Scotland.
Since I plan on building additional income streams in America before we execute our plan, it is possible I will be earning dollars while living somewhere considerably less expensive (this is known as geographic arbitrage…more on this to come).
- Thailand – The cost of living there is very low, the food is amazing, and it could serve as a great hub to explore the rest of Southeast Asia.
- Guatemala – World-traveling early retirees Billy and Akaisha Kaderli mentioned during our interview that if that had to pick one place to retire early, it would be Panajachel, Guatemala.
- Ecuador – Maybe we’ll head down and join Jim Collins in the early retirement retreat he proposed
Learning and Creating
It’s pretty obvious that our plan extensively covers the Family/Friends and Traveling categories, but what about Learning and Creating?
Well, learning and creating will take place throughout the year in all of the places we will be living.
I already mentioned a few of the things I’d like to do:
- Create businesses and web applications with my friend in Scotland
- Learn languages in our second three months abroad
- Create amazing Mad Fientist content throughout the year
There are also a few other things I plan on exploring:
I want to create synthesizer music with my brother on machines like the one pictured at the beginning of the article.
Most PhD programs offer full tuition wavers and an additional stipend of around $20,000 per year so getting paid to study, while potentially conducting groundbreaking research, sounds like an incredible option for an early retiree.
Obviously this would limit our traveling a bit but this is definitely an exciting opportunity to consider a few years after living the 3-6-3 plan.
So What Now?
“A good plan, violently executed now, is better than a perfect plan next week.”
– George S. Patton
It’s time to get started. It is going to be quite a challenge bringing my FI date two years closer so I’m going to need to make some big changes.
My main focus will be on generating additional income streams so that I can not only increase my savings but reduce the amount I need to save to reach financial independence.
If I build a business that generates $500 per month, not only will I be adding an additional $500 to my FI savings every month while I’m still working but I will decrease the amount of savings I need to accumulate for financial independence by $200,000 (since $200,000 of savings would be needed to generate $500 of monthly income based on a 3% dividend).
This great article from Paula at Afford Anything really resonated with me and helped shift my focus from cutting expenses to increasing income: Quit Thinking About Consumption. Start Thinking About Creation
Being frugal is great but it shouldn’t be my primary focus. Frugality comes naturally to me so rather than try to optimize my frugality further, I should focus on expanding my income instead. There is only so much more I can save on the spending side of the equation but there is an unlimited amount of income I could earn so it makes sense to focus on that side of the equation instead.
Mad Fientist Readers
So what can you look forward to as a Mad Fientist reader?
- More articles about entrepreneurship and building businesses – I will document my experience with building addition income streams and side businesses.
- Additional experiments in the Mad Fientist Laboratory – To meet my 2015 deadline, I’m going to have to get creative and experiment with different strategies so you should benefit from reading about both my successes and failures.
- Articles on travel hacking – Our plan involves quite a bit of travel but luckily I’ve become adept at travel hacking over the last few years so I will describe some of the techniques that will enable us to travel at minimal expense.
- Country profile articles – I plan on researching (and writing about) specific countries in order to find the best places for semi/early retirees to spend extended time abroad.
- Mad Fientist Financial Independence Podcast – I will continue to interview the most respected fientists in the field to discover the techniques and strategies they used to achieve financial independence.
- Progress reports – I plan on sharing more of my personal numbers so that you can not only stay up to date with my progress but also see that achieving FI early in life is possible. Most of my favorite FI writers have already achieved financial independence so I think there will be value in seeing someone documenting their journey to FI, as it’s happening.
- Financial theory – I will continue to dive into the financial theory behind investment strategies, as I did with the Unique Risk series, in order to gain insight into what financial advice should be followed and why.
Now that I know where I’m going and when I want to get there, it’s time to work backwards to figure out how I’m going to get there.
I am excited to get started and I hope you will get involved and join me on this journey so that I can learn as much from you as you learn from me.
What does your perfect life look like? Where are you going?
Happiness Through Subtraction
Although financial independence isn’t the answer to all your problems and won’t bring complete happiness, it can increase happiness through subtraction.