Financial independence is something that all of us should strive to reach, but it means different thing to different people. In this post, I wanted to share why I wanted to be financially independent, as soon as possible and what specifically it means to me.
From the time I had started work at the age of 24 after my post graduation from IIM Calcutta, I was very clear that a career of 35 plus years was not what I wanted to have. It was my belief, even at that time but more so now, there is much more to life than work. Work – life balance is unfortunately a difficult thing to achieve in India, especially if you are working in a stressful corporate Executive role, as I have had for most of my life. My philosophy therefore has always been to try and get as much of a work-life balance as possible, to spend some time on activities that I really enjoy doing and work towards a time when I am financially independent and can therefore do other things in life.
Note here, I do not look upon achievement of FI as something that has me retired early. I am running a Consultancy practice now and work with companies and in areas that I genuinely like. It gives me a sense of fulfillment and I have enough time in my hands for other things I want to do. Many of my friends have said that I could have worked till 60, like most other people, and then have reached the same state. The point is, I do not even know what will happen by that time. There are several things that I can do today ( go on a trek fror example), which will be infinitely more difficult 10 years hence. I seriously doubt my level of energy after 10 years to start a Consultancy practice for example.
So what does the state of being financially independent mean to me as an individual? It can be characterized as below:-
1. You no longer need to work in order to meet your expense or investment needs.
2. All your future goals are funded now and will be met easily when the time comes.
3. You are able to maintain, enhance or cut down on your existing lifestyle as per your choice, without being compelled in any manner for financial reasons.
4. Your passive income meets your cash flow needs comfortably and leaves room for some indulgences.
5. The ups and downs of the markets will necessarily affect you but not to the extent where your financial freedom is compromised.
I am happy to have achieved this freedom in 2014 and can now plan to do some other things in life, which always interested me but I never had the bandwidth to commit for. Feel great about the fact that I have managed to get there while my children are still in college – in fact my son has just joined college in 2014.
In the next post I will talk a little more about my plans and their implementation to get to this stage.