The Power of Early Retirement

You don’t need money to be happy. That, we all know. In fact, it is too commonplace it becomes a background in our daily lives, never really coming into focus. More specifically, I think, is that you don’t need a lot of money to be happy.

It’s been a while since I stumbled upon Early Retirement and Financial Independence. Discovering this idea that you can retire and do whatever you want after working only a mere 10 years by optimizing your savings and learning how to invest sensibly, blew me away.

Back in 2014, fresh out of college, I came across an article about how much you needed to retire. I was about to start my career in a new country, and that made me think of my future and my finances, which naturally, I’ve never thought of before.

Reading that article brought about this sense of urgency about my family’s financial situation: about how my mom, having to start over from scratch in a new country, was now just starting out to save for her retirement, at age 50, with only about $20,000 saved up and just renting a room to live in. And my sister was just was just about to start college.

So I started running numbers in my head estimating very roughly how much my mom would need to retire. I think I came up with something like over a million dollars. And that’s just for her retirement. Probably another million for me. I needed to do something about it. I was driven to improve our financial situation. So I searched for more articles about finances, being successful, and about retirement.

That’s when I came across Early Retirement. Thru the blog of Mr. Money Mustache – a 30-something retiree writing about how he and his wife retired at the age of 30, right before their first son was born. I found out that you don’t even need a million dollars to retire at 30, supporting a family of three, forever. And this was the real thing – backed by someone who was actually practicing what he was preaching.

I learned that you didn’t need a lot, even if you retire early. You don’t need a lot of money to be happy. Financial Independence wasn’t necessary for happiness. But I believe that it’s a stepping stone. It made it easier to achieve happiness, but not any more possible.

I’ve come to learn, realize, and discover a lot since then. I’ve changed from the person who believed and promised that it is an absolute must to work full time for about 7-10 years or so in order to save up that sum of money to claim early retirement to someone who now thinks that that might not necessarily be the best route for me. Since I figured I don’t want to put off living the way I want to for that long.

I thought maybe I can probably work even less than 7-10 years, then having a mini early retirement to pursue other things, and then getting back to work after that, either back as a PT or doing something entirely different. Or that I could just work part time, or only a portion of the year for the years to come, spending the remaining months free from mandatory work and doing/pursuing other things that interest me. Acquiring lifestyle flexibility (which I will get back to later), made me realize I could do any of these while at the same time not compromising my commitment to financial independence.

You can take the concept of early retirement and shape and design it the way it suits you best.

I knew that achieving financial independence was important, so I undertook the path to seek it. What I found out though, was that the true power of it lies not at the end when you finally save up that lump sum of money, but in the journey you take to attain it. The path of which runs parallel to or is closely related to the path of achieving your own happiness.

It teaches you and makes you more aware of the value of your money and therefore the value of your time. It teaches you that most other material things don’t really bring you happiness, and that you don’t need, or even want them. Sure money can actually buy you happiness to some extent, but if you want to move up into the big leagues (of having a happy and fulfilling life), then money won’t cut it anymore. The currency that you would now need, is time.

You spend it like you would money: You spend time to do the things that excite you and nourish your soul through days on end; you spend time to bond with your family and friends over weekends or even weekdays; you spend time to pay attention to the world around you and take notice on the things that matter most, to help people and bring about positive change. Time buys you the kind of happiness money can’t. And that is what you gain more of when you take the path to financial independence.

It teaches you frugality by being more mindful about your spending, cutting unnecessary expenses and getting rid of the junk. To do this, you need to prioritize by asking what is important to you. Seeking early retirement forces you to constantly ask yourself this question through the everyday decisions you make. When purchasing things for example, is buying that expensive pair of shoes more important or would you rather spend that money to help get you that roundtrip ticket to Iceland or wherever? Is it more important for you to own that expensive brand new car you want or would you rather use that money to reach early retirement, rather earlier? Gaining time as a result.

It helps you declutter your life of material junk, giving way for more space, and time, for the things that are truly important. And as a huge bonus, this constant process of deliberate decision-making helps you get to know yourself more, which I believe is key in achieving your own happiness.

Lastly, it gives you the chance to gain the power of Lifestyle Flexibility.

You get familiar with your finances: The inflow (earnings) and outflow (spendings) of your money. And since you now know that most of the material things that are part of your monthly budget don’t really give you true happiness, you start to realize that you have a lot of wiggle room, that if desperate times require, you can adjust your lifestyle through cutting expenses without sacrificing on your happiness or comfort.

Along the way, you get more confident in your ability to get a hold of your finances: your ability to control your spending habits, to decrease it if needed; and even earning capacity, to increase it if needed. Through seeking extra hours of work, or even having a potential job on the side, making use of the can-be marketable skills you’ve now acquired as a result of knowing yourself more and having more time to explore things that interest you.

When you’ve gained this confidence and mindset of having this lifestyle flexibility, it essentially gives you more freedom in pursuing other things you like and that interest you, without having to feel pressured or worried in doing work that doesn’t really excite you just for you to earn money for a living. Having this freedom opens you to new possibilities.

Suddenly, you’re looking forward not just to the money that you earn from work, but the things you can do with the time that you can now actualize.

The path to acquiring money for Early Retirement and the path to achieving your own happiness: Two seemingly dissimilar paths with a common ground that ushers you to get to know the importance of time over money, knowing your priorities (and making sure they really are your own) and learning the value of Lifestyle Flexibility.

You don’t need a lot of money to be happy, just what is enough. And what is enough depends entirely on you.

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