You know, the concept of “Financial Independence” (FI) isn’t exactly a new idea. Over the years, it’s been discussed in countless articles, on social media, and even on TV shows. For some, the journey toward financial independence started 10 or even 20 years ago. It’s something many of us have been quietly striving for, searching for ways to improve our well-being and secure our futures.
For us, the journey began in earnest in 2015.
The Early Days: A Wake-Up Call
Back in 2002, I found myself with three months off from work right as the Winter Olympics were kicking off in the USA. The company I worked for had gone bankrupt, leaving me officially unemployed. Initially, I didn’t rush to find another job; I wanted to take the time to figure out what I truly wanted. But as the weeks turned into months, I realised I didn’t have the motivation to become just another employee. The idea of starting my own business felt out of reach, and without the wealth of information we have today—no internet or social media to guide me—I felt stuck.
We were living a life that many would consider typical: good employees working hard, aspiring to retire like our parents. We believed in the traditional markers of success: finding higher-paying jobs, maintaining gym memberships, enjoying drinks with friends every Friday, taking luxury vacations, and building a beautiful home. We prided ourselves on our expensive lifestyle, viewing our spending as a reward for our hard work. But this cycle meant constantly seeking better-paying jobs just to keep up with our expenses and maintain our lifestyle.
The Corporate Grind: A Vicious Cycle
Climbing the corporate ladder proved to be more challenging than I expected. My anxiety levels soared, and I began experiencing panic attacks from the stress. Paul was feeling the same pressures. We were trapped in a vicious cycle: working harder, spending more, and working even harder to cover those expenses.
Around this time, we decided to invest in properties to boost our assets. We poured our savings into building two properties during a booming market. But then the market crashed. The mining boom ended, people lost their jobs, and the value of our properties plummeted by 15% and continued to fall.
A New Beginning: Discovering Financial Independence
We were devastated and desperate for a new solution. And then, out of the blue, life threw us a lifeline. In 2015, I went to a bank to open an investment account, hoping to start investing in the stock market. While waiting, I flipped through a financial magazine and stumbled upon an article about the Financial Independence (FI) movement. In those 15 minutes, my life changed.
I was thrilled to learn that we didn’t need to become multi-millionaires to retire from full-time work. But before diving in, we asked ourselves some important questions:
- What can truly make us happy?
- How much do we really want to work full-time?
- Is it the career we don’t want, or do we dislike our colleagues and company culture?
- Or is it because we yearn to do something more meaningful?
Embracing the FIRE Movement
We realized that doubling our income and building more houses wasn’t making us happier—it was only adding to our stress and anxiety. So, we started learning about the FIRE (Financial Independence, Retire Early) movement. Our lifestyle and mindset began to change. It’s incredible how having a clear destination can transform your approach to life.
Our date nights and take-out evenings became filled with discussions about our goals, whether they were realistic or just dreams, and how we could achieve them. We knew the journey might be tough, but we were excited to take on this new adventure together.
Practical Steps: Tracking and Budgeting
I never imagined I’d be able to create a financial spreadsheet to track our expenses, update our spending and income, and review our total assets every month. If you haven’t started tracking your money, you don’t need to create your own tracker. There are plenty of income/outcome tracker apps and Google templates available to help you get started.
We began playing with numbers to see more clearly where we stood on our path to FI.
Cost of Living: Planning Our Future
We calculated our annual living expenses based on different locations:
- In Australia, especially WA, we need $50,000 (ideally $60,000) per year to live comfortably.
- In Bali, we only need $30,000 (ideally $40,000) per year.
- In some cheaper countries, we need even less than $30,000 per year.
We believe $40,000 will be enough for us to live comfortably outside of Australia or while we travel (At least the time when we were planning this in 2019…). With $1 million in shares, we could comfortably receive dividend or sell some shares to spend $40k per year, depending on the location.
Setting Realistic Goals: Lean FI
We both agreed that we didn’t want to wait too long to achieve our goals and didn’t mind working part-time instead of full-time. Our primary goal was to escape the rat race as soon as possible. To measure our progress, we created our own system called “Twogether FI-ism.”
While Fat FI is often seen as the ultimate financial safety net, we decided that Lean FI—achieving the minimum needed to sustain our preferred lifestyle—aligned more closely with our values and goals. This shift from maximizing wealth to optimizing life satisfaction has been a fundamental part of our journey.
Embracing a Sustainable FI Lifestyle
Mindset Shift: Our journey to FI involved more than just financial strategies; it required a complete mindset shift. We recognized that true independence wasn’t about hoarding wealth but about creating freedom and flexibility. This idea is not common for everyone, so we had to learn how to communicate with people who are in a mediocre mindset and against the early retirement movement.
Sustainable Practices: We began incorporating sustainable practices into our daily lives. This included reducing unnecessary expenses, focusing on value-based spending, and investing in resources that offer long-term benefits. Our choices became more conscious, from the food we ate to the energy we consumed. To achieve that, we needed to live differently—not like the mediocre lifestyle. It required being frugal and sticking to a tight budget during some periods to reach our goals.
Community Engagement: Instead of joining existing FI communities (we weren’t quite sure where to start), we decided to write a blog and create our own community. This new venture provided us with invaluable support and insights. The connections we made through our blog enriched our journey, keeping us accountable and inspired.
Key Takeaways from Our FI Journey in 2023
- Start Early, But It’s Never Too Late: The best time to start your FI journey is now if this is right for you. Even if you begin later in life, the principles of financial independence can significantly impact your financial security and personal well-being. I wish I knew this when I was in my 20s or even early 30s…but it’s never too late!
- Understand Your Values: Everyone has different interests, life purposes, and lifestyles. Knowing what truly matters to you and your family is crucial. FIRE may not be for everyone, as some people truly love their current job and life. This understanding guides your financial decisions and helps you set meaningful goals.
- Educate Yourself: The FI journey is not an easy one, nor is it short and sweet. It can be dull or painful sometimes as it’s a long run. Continuous learning about personal finance, investment strategies, and lifestyle choices will empower you and enhance your journey.
- Balance is Key: It’s important to balance saving and investing with living a fulfilling life now. This balance prevents burnout and ensures that your journey to FI is sustainable and enjoyable. lIke Barefoot Investor mentioned, set your buckets that suit your lifestyle and enjoy the journey.
- Plan for Flexibility: Life is unpredictable. Paul and I were planning to become Semi-FI and leave the country for traveling and work so we booked flights end of 2019. But the COVID-19 locked us up for two years…thankfully we could manage continue to work fulltime and saved more money during that time. Your FI plan should include flexibility to adapt to life’s changes and challenges without compromising your financial security.
Conclusion
The road to Financial Independence is as much about the journey as it is about the destination. It’s a personal path that requires understanding your own needs, desires, and circumstances. While the concept of FI is not new, each person’s journey is unique and offers different insights and lessons.
If you’re considering embarking on your own FI journey, remember that it’s about more than just financial metrics. It’s about crafting a life that aligns with your values and offers freedom and joy. Whether you’re just starting out or well on your way, every step toward financial independence is a step toward a more empowered and fulfilled life.
Embrace the lessons learned from the setbacks, celebrate the milestones, and continuously strive for a balanced, fulfilling life. Here’s to making your financial independence journey insightful, rewarding, and tailored to your personal dreams and realities.
Our Story Continues
We have many more past stories to share about our FI journey, each one a milestone in our path. From the early days of discovery to the turning points that shaped our approach, every chapter is filled with lessons and insights. We’ll continue to document our progress, challenges, and triumphs, hoping to inspire and guide others on their journey to financial independence.
Stay tuned for more stories from Twogether FI, where we share our experiences, strategies, and the highs and lows of our quest for financial freedom. Let’s build a community that supports and learns from each other, making the journey to FI a little bit easier and a lot more enjoyable.
