This FIRE community rocks, y'all. There are amazingly smart bloggers who write some really deep articles that really make you stop, think, scratch your head, think some more, write a comment at 5 am, and then enjoy some more thinking.
Ms. Our Next Life is no exception to this. She recently posted an article on Why “Financial Freedom” Means Something Different to Me. I absolutely love it! I love that FIRE means something different to every person in the community. Some want the extra stability in their lives to take risks with their corporate jobs, some want the choice to quit their W2 job to work a lower paying but more fulfilling career, some want to quit and have more time with their families, and still others want to quit and travel the world forever.
I commented this on the ONL article: “I’ll be sticking with financial freedom. It implies a certain sense of wonder, lightness, and awe to those not on the same path. Also, right now I’m not financially free. I’m in handcuffs, chained to my job. The handcuffs might be invisible, and comfortable, but they’re still there and chafing at me. Yes we have it tons better than people in say, North Korea. There will always be people in the world I have it better than. There will also always be people who have it better than me! I wish everyone were equal but alas, our world isn’t set up that way :(”
Her reply: “I love the wonder part of your definition, but I do want to press you: Are you REALLY “handcuffed” to your job? You have tons of skills, and could easily find another. ‘Handcuffed' means you literally have no choice, which clearly doesn’t apply to you. And you just bought a multifamily home at a young age as a single person — that sure sounds like financial freedom to me. You made that choice — an audacious one, at that! — all on your own, and made it happen through your own ingenuity and grit. I can’t think of any better word for that than ‘financial freedom.' ;-)”
Consider this my long-winded response to her comment!
I absolutely do NOT consider myself to be financially free right now. I am in a great situation, absolutely. But I have obligations to meet and bills to pay. I have $150,000 squirreled away in various accounts. I also need to eat, put gas in my car, and pay my cell phone bill.
Right now I am still wholly dependent on my day job. Since I took relocation benefits to move 5 months ago, I have at least 7 more months to go before I could quit my job and take another position elsewhere. Yes, I could potentially get the new company to pay that for me. But what if I talked about the wrong thing to the wrong person and got fired? I'd be on the hook to pay that back before I could potentially get hired at a new company.
I also bought my house. This means I have a mortgage to pay. Yes, my tenants pay me rent which more than covers the mortgage. But that won't always be the case as tenants come and go and I have to account for vacancies. I can't depend on that money coming in, so I need to be sure I have a way to come up with the money on my own. I can't do that without a decent paying job right now.
I used a VA loan to buy the house. I have to live in this house for at least 12 months before I can move anywhere. Technically I could move and just not tell anyone but that's unethical. I will wait out the year to move…… but that means if I were to get fired, I couldn't move to a new location. Chances are high I wouldn't be able to come up with a comparable position in this town. Maybe I'm not doing the other businesses in this town justice, but it is a very small town ruled by my MegaCorp. I would almost certainly have to take a pay cut to stay in the area.
I'm not even sure I could thrive and excel in a new job. I have the technical skills on paper to get hired into just about any relevant job I want. I get recruited on LinkedIn often enough to tell me this is the case. Add in the fact that I'm a woman in IT, and my chances get every better. I hate to have to use the diversity hire card, but if it helps open doors I'm not going to turn it down. However……… my actual technical skills leave a lot to be desired. While it looks like I have the technical skills, I really don't. I am definitely better at IT stuff than your average bear (or Baby Boomer), but I lack the logical way of thinking to really dig in deep and understand where the problem is or how to improve something. I'm much better at the user support side of things.
Unfortunately for me, support positions like mine are rare. Normally these positions are contract positions and paid very low to people just starting out in IT. Think your friendly helpdesk before it got shipped off to India. The only reason my job isn't contract is due to the highly sensitive and confidential nature of my day to day tasks. It's so sensitive we can't even fill an open spot on the team to an outside employee. Finding an equitable position in another company would take a lot of time and effort… that I might not have in the first place.
Fortunately, I love my job and have no plans to leave, and definitely no plans to get fired anytime soon. All of this goes to show though, that while the tide is turning for me, I'm nowhere near financial freedom yet.
I definitely have the cushion needed to take some risks (which I did when I bought the house) but I'm not financially free yet. To me, financial freedom is the same as financial independence. I can take baby risks right now, but big risks like quitting my job and moving to a different location will have to wait until I have more money squirreled away.
So if $150k isn't enough for me to take big risks, what number is big enough?
Honestly, I have no idea. I know I've set $587,500 as my FI number but I'm thinking as long as I have a steady income stream I won't have to get quite that high before I can quit and do what I want. I'll be almost half way there by the beginning of 2018! The higher my number and passive income goes, the more comfortable I'll feel taking bigger risks.
Until then, I continue to stay the course! Onwards and upwards!
What's your definition of financial freedom? Do you think I'm being too cautious?
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