Financial Independence Mindset
It’s been six months since I learned about financial independence (FI) and this way of life. What does financial freedom look like? How would you structure your life when you no longer have to answer to an employer and/or manager? You can read about this lifestyle in an earlier article I wrote here.
In this article, I’m sharing six financial transformations I have gone through since I became aware of FI. These observations and self-reflections surprised and fascinated me. I used to think I was stuck in a certain way and that was how I was going to be. Nowadays, I believe in the transformative power of adapting a financial independence mindset and the psychological freedom that comes from living life this way.
Six Financial Transformations
1. I used to think reaching millionaire status would be the gateway to my happiness. It would mean having the excuse and freedom to shop. Nowadays, that millionaire status is my cushion of financial security and freedom and peace of mind. That millionaire status also affords me the freedom to leave my W-2 employment at any time right now and pursue more creative endeavors where money is no longer a concern.
The backstory: Several years ago, I had my husband promised that once we reach millionaire status we would only max both our 401(k)s and Roth IRAs (that would be our savings) and then spend the remaining net income on anything we (I) want. Just maxing those accounts would have us saving anywhere between $45,000 to $50,000 of our net income, which I thought was plenty.
2. When I found out I was pregnant, I informed my husband that I didn’t want to be a stay-at-home mom. I wanted to dress up in the morning, go to work and socialize with my coworkers/friends. When I was a student, I used to envy those women who looked so polished every morning either waiting at a bus stop going into work or roaming through the busy streets of downtown. I said to myself that I wanted to be like them. Nowadays, I savor the lazy weekend mornings with my daughter in bed. I daydream about walking to the local bakery with her, to the neighborhood library and playground and to the beach to play water and sand. I don’t want to miss any moment watching her grow.
3. I used to resent my husband for his radical approach to savings (you can read more about the story in an earlier article I wrote here). Nowadays, I thank him for our family’s financial security and freedom. He started saving aggressively years before we met. Through him, I learned about the power of compound interest and the time value of money.
4. I used to put on a piece of clothing and ask my husband, “How does this (sweater/shirt/dress) look on me?” We know this is a loaded question that only has one right answer :). Sometimes, I did this to him three or four times a day. It was even more frequent during the weekend. Nowadays, one of my favorite questions for him is, “What did Personal Capital (read about my comprehensive review of this free online financial tool here) say about our portfolio performance today?”
5. I used to spend hours online shopping for wardrobe items. Even when I didn’t need something, I enjoyed looking at all the pretty eye candy. Nowadays, I love shopping for potential rental properties. I just like looking at houses for sale, period. As Robert Kiyosaki describes in “Rich Dad, Poor Dad“, the poor by stuff, the middle class buy liabilities and the rich buy assets.
6. I used to spend hours reading fashion and lifestyle blogs. Nowadays, I peruse through blogs on real estate investing, child development topics, investing, travel, personal development, businesses, human psychology, food and healthy living.
What kind of financial transformations would you like to see for yourself in 2017?
How are you setting yourself up to make these changes happen?
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