We’re a bit extreme about saving money around here. In fact, we recommend saving so much money that you never have to work a job again if you don’t want to, preferably as early in life as possible. This is usually achieved by optimizing your everyday spending and making big, deliberate choices to reduce some of life’s biggest costs, especially during your 20s and 30s.
Over the years, we’ve heard from a lot of people who don’t think this is such a good idea. One of the most common arguments is, “but what if you get hit by a bus?” The implication is that it’s risky and senseless to deprive yourself of life’s pleasures, especially in your “best years.” After all, life is fleeting, and it could all be taken away in the blink of an eye.
Okay, but like, what if I don’t get hit by a bus? Isn’t that way more likely? Shouldn’t I set up my life assuming I’ll live to be 60+, since there’s a 91% chance that I will?
Long-Term Thinking Pays Off
Unless you have a chronic illness or put yourself in immense danger on a regular basis, chances are good that you’ll live a long time. So for most people, hypothesizing about sudden death shouldn’t make for a very convincing argument. Still, the YOLO reasoning is pretty popular in our society.
To make money choices that will serve you better in the long run, first accept that you’re gonna be around for a while. When you’re 22, it’s tough to imagine that you’ll be 40 or 50 someday, but it really is coming. So make sure you’re setting up your life to enjoy the vast majority of the years ahead, not just focusing on today.
The key is to buy freedom for yourself sooner rather than later. If you spend the majority of your income in your 20s and 30s in order to “enjoy life,” you’re also guaranteeing that you’ll need to continue working full-time into your 40s, 50s, and beyond. That means you’ll spend thirty or more extra years in an office rather than out in the world doing the things that get you excited.
On the other hand, it’s totally possible to save enough that working becomes optional in as little as ten years, so if you were to really focus on saving and investing money throughout your early life, you could legitimately have 4-6 decades of complete freedom ahead of you afterward. Even if those few saving years were less fun, that still seems like a fantastic tradeoff.
Don’t Miss the Point Though — You Should Enjoy the Ride
While the whole “hit by a bus” thing isn’t an argument you should plan your whole life around, its point isn’t totally lost on me. We should make sure we’re enjoying life along the way because, yes, it could all end abruptly at any time.
Luckily though, living a good life has almost nothing to do with spending more money. I get more enjoyment out of my daily commute by riding a bike than I would by driving a car. I feel more satisfied putting in extra hours toward interesting side hustles and reaching shared goals with my wife than I would from partying more or going out to more fancy restaurants. The most lasting satisfaction in life usually comes from accomplishing things, not from enjoying an excess of leisure or luxuries.
The other thing to remember is that reaching financial independence doesn’t have to be a race. Sure, getting there earlier in life affords you all the benefits of compound interest and maximizes the number of years of complete freedom you get to enjoy. But giving yourself a few years of “slack” along the way will hardly have any negative effect in the grand scheme of things.
That’s why we decided to take a 45-day road trip right after college, and then another six months off in Hawaii after our first few years of working full-time. We even took a seven-month trip through every US National Park a few years after that. All of these experiences were well worth the delays they imposed on our FIRE date, and we have no regrets about them.
At the same time, it’s important to realize that neither of those breaks from reality would have even felt possible in the first place if we hadn’t been keeping our expenses low and saving a lot of money throughout our 20s.
The payoff of saving toward an early retirement doesn’t all come at the end. The freedom you feel in life as you accumulate a buffer of cash, investments, and income streams comes little by little over time, and it actually improves your outlook on life a bit more every day.
Imagine if your monthly expenses were cut in half and you just had an extra $100k in investments kicking off some modest interest and dividends. It wouldn’t be nearly enough to retire on, but how would it make you feel differently about your ties to your job? Would you feel more free to take a break if you needed one? Could you find a way to work a little less and make more time for friends and family?
The next time someone tells you, “life’s short; buy the shoes,” consider that life really isn’t that short, and buying more stuff is probably not gonna make you happier in the long run anyway. So spend less, save big, and enjoy a few hard-earned pit stops along the way to your lifetime of financial freedom.
— Steven
