Since the birth of our daughter, Rob and I haven't spent much time thinking about financial independence. I would say it's probably slipped from priority four (After Faith, Marriage and Kid) to priority eight (After faith, marriage, kids, church, friends, fixing our house and career).
The priority slippage came with a commensurate free fall of our savings rate. Our once robust 60% savings rate fell to 0% one month and no higher 20% since I quit working full time. This month, we're saving around 14% of our income.
Have we become spendy mc spends a lots? Have we completely abandoned our goals of early retirement? These our my current thoughts.
Returning to the agile personal finance manifesto
About 3-4 years ago, Rob and I became excited about the idea of Financial Independence. Financial Independence, for those who are hearing the term for the first time, is the idea that you don't have to work to earn money. You are as confident as humanly reasonable that your money will work for you, and you don't have to work for it.
Financial Independence comes down to just two basic factors. You need to have enough money invested in assets that they produce income for you. You have to live on less than the cash flow produced by your income. You can, of course, get more complicated than that. But investing and frugality are the core of financial independence.
If you know what you spend, you can invest enough to cover your spending. Once you have that amount invested, you've done it. You've achieved financial independence and you can retire early. This leads to a neat acronym called FIRE.
FIRE itself is an excellent framework for pursuing wealth. However, the FIRE movement is philosophically informed by ethical frameworks such as Stoicism, Buddhism, and modern manifestations of Mills utilitarianism and Nietzsche's nihilism. As a Christian, these profound influences put me ill at ease.
Christ makes it clear that the way we live our life and handle our money should be distinctly God Centered. In addition to glorifying God with our wealth, we're clearly called to have a heart for the poor. We also learn that work is created good, and that people are meant to image forth God... including in doing work ourselves. God warns against greed, and warns against trusting in money.
So, Rob and I decided that we were on a journey. It was clearly a wealth building journey, and one stop along the way (we hoped) would be Financial Independence. Along these lines, we penned out our manifesto for pursuing financial independence.
This is the start of the manifesto.
Our family is uncovering better ways to pursue financial independence by pursuing it, and helping others pursue it as well.
Through this endeavor, we have come to value:
Contentment over striving
Financial simplicity over financial optimization
Shared life vision over freedom from working
Embracing relationships over embracing plans.
That is, while we value the items on the right, we value the items on the left more.
What hasn't changed?
Rob and I still value the items on the left more than the items on the right.
We value contentment with what we have right now, more than we value working for the next dollar. We value contentment more than spending money on things (including our house). Godliness with contentment is great gain.
We still value simplicity over optimization. I've been researching various investment opportunities including probablistic investing using Fat Tailed distributions. However, we own index funds and rental properties. Why? Until I can explain probability theory to a kid, I'm not going to invest that way. Optimization is great, but it's not always worth pursuing the optimal route if you have to completely abandon simplicity along the way. I will say that we are finding more and more that we need to value the "Simplicity that comes on the other side of complexity." Simple shouldn't be an excuse for shoddy thinking. I will also say that simplicity in consumption is a growing value, but don't confuse simplicity with Minimalism because that's a whole kind of complex.
Shared life over freedom from working. If anything, this has grown in importance. Not working strikes me as a bad goal. We are born creators, we are born to live in community. These are the values we want to promote. These are much higher priorities than any form of freedom. Only freedom that serves deeper values is freedom at all.
And as ever, we still value relationships over plans. We thought I would continue working full time while Rob was in school. I quit. Why? Our relationship suffered, and we didn't need the money.
What has changed?
I'm not convinced that FI is actually the goal that Rob and I are pursuing. We want to build wealth, and we want to support ourselves. It seems wise to continue saving at a brisk pace when possible.
However, we're much more excited about building a meaningful life first. We want a family life that glorifies God. We want to care for friends, for the poor in our community. We want to worship God and love people. We want to honor God with our wealth.
Does financial independence fit into that picture? It might.
Financial Independence and Early Retirement are frameworks that we used to help us define important concepts. We have a better understanding of enough. We understand goals, and the power of frugality. It's given us a meaningful way to understand compounding.
However, it's also pushed us to clarify our values. And right now FIRE isn't the most efficient way to pursue our values. Right now, earning less and giving more help us pursue our values. Later on that will change.
Becoming relatively wealthy due to high savings rate, luck and privilege has given us a huge margin of freedom. I don't know that the marginal value of more freedom is worth the marginal cost.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.