We invited a family to join us for Saturday brunch last week. After we finished eating and our kids were playing with their kids, we sat down to chat. We were talking about the things that we like to do, and our friend told us that he really enjoys hiking, camping and mountaineering. Then he surprised me by saying, “When I’m independently wealthy, I’m going to go see Mount McKinley.”
I was intrigued, so I asked a few questions. Do you have plans to become independently wealthy? Is that something you’re working toward? He laughed it off as one of those daydreams, something that a person sometimes talks about, but doesn’t really mean. I let it go, seeing that he wasn’t serious about it. But it got me thinking that there’s a step to financial independence that comes well before the widely understood steps of earn, save and invest.
Believe. Most people wouldn’t believe they could retire before age 65. I freely admit that it’s not possible for everyone. But even among people who could achieve financial independence, few of them have seen anyone actually do it before age 60. Who in their 20s or 30s thinks about only working for 20 years or so? Maybe this is why young middle-class families don’t believe that it’s possible to retire young.
Without believing it’s possible, there’s no chance to come up with a plan that would make it work. When there’s no plan, there are no actions to take to make progress. And without moving toward the goal (that doesn’t exist), it’s impossible to achieve. Without having a goal of retiring young, there’s no point stretching to be able to save more. Instead, a family might as well spend money on all the stuff and on every activity that they enjoy.
I personally never had a plan to retire early. I just wanted to have enough money (independently wealthy) to be able to change jobs with no risk whatsoever. I want to be able to pick up and move to Hong Kong to teach in an international school, knowing that if it doesn’t work out, or if my work there ends, I can always come back home, without having to worry about work. I decided to stretch in order to save more, I worked on investing it wisely, and I was lucky with my timing. In the end, I was able to stop working far earlier than I expected. None of this ever would have happened if I didn’t have a reason to try and make it work. Instead, I would have just given in to lifestyle inflation.
When did you get the idea that you could become independently wealthy? Do you know others who support that belief? Are there people around you who doubt it’s possible?