Financial independence and lifestyle design are compatible topics that are often seen as at odds with each other.
However, financial independence and lifestyle design do not have to be consecutive goals, where you design your lifestyle after achieving financial independence. Rather, they are goals that should be pursued simultaneously.
Most people pursue financial independence and early retirement thinking that their goal is to stop working at their jobs. But if you don’t fill that newfound time in with meaningful activity, early retirement is bound to be disappointing and empty. The same happens when your pursuit of the goal is unsustainable and at the expense of everything else in your life.
I’d argue that ultimately people pursuing financial independence aren’t actually explicitly interested in having seven figures in their bank account or telling their boss goodbye. We want something far less tangible than that. Financial independence means freedom, it means options. Having freedom and options means happiness. The ultimate goal of financial independence is therefore freedom and happiness.
So why would we sacrifice our freedom and happiness during the journey to FI?
It doesn’t make sense, but it’s a common story – someone grinds and grinds and grinds in their job until they’ve saved enough money to retire and then, finally, they can be happy.
I don’t think happiness has to, or should, be a casualty in our quest for financial independence, especially since happiness is the ultimate prize.
Table of Contents
The Deferred Life Plan
Traditional retirement is a deferred life plan, where you put off everything you want to do until you’re done working completely. The standard early retirement, or FIRE plan, has historically looked like a condensed deferred life plan. Most early retirees lack balance in their approach to working versus enjoying life on their journey to financial independence.
During the pursuit of typical FIRE, work, side-hustles, and other income generating activities take on a more important role in one’s life than personally fulfilling activities such as relationships, social life, adventure, recovery time and more. The idea is that if you work really hard when you’re young and at the beginning of your career, you will only have to work a short amount of time – keep in mind that this short amount of time is typically 10 years or more – to ensure a financially free future.
This sounds like a really great plan, until you realize that a lot of people who are pursuing FIRE are relentlessly working (at jobs and side hustles they might not enjoy – which is why they want to escape them and retire early) while spending very little time and money actually enjoying their life.
If you start your pursuit of FIRE after graduation, at age 21, and spend the next 10 years of your life grinding away in a corporate job you hate, so that you don’t have to work for 30 years, you’ve still spent your 20s in a lifestyle you didn’t enjoy and wouldn’t choose for yourself. Many people pursuing FIRE also either defer having children (because they’re expensive) or spend much of their kids’ early years working excessive hours.
What if there was another way? What if you could use your incremental financial freedom to start living your ideal life during your pursuit of financial independence?
To be clear, I’m not saying that there’s a way to avoid the hard work of paying off debt, earning an income, and saving for the future. I am saying, however, that those activities don’t have to come at the expense of your happiness.
There are many ways to make money that you will enjoy. You can align your saving and your spending with your core values, so you don’t feel deprived. You can extend your timeline to financial independence in order to have more time in your life now to do the things you enjoy.
Why I Started Incorporating Lifestyle Design on my FI Journey
I’m a big proponent of balancing lifestyle design and the pursuit of financial independence because I didn’t want to sell my 20s for an early retirement. When I was 21, I graduated with $100,000 of student debt, and decided I would retire by 35. I was highly motivated to pay off my debt so I could be free to travel and work at jobs that really made a difference. At the time, I was working in a corporate job that quickly crushed my soul. At first, I thought I could just push through for 15 years and be done. After 3 years, I realized that I desired more freedom than a cubicle job would ever allow, and that I was deeply unhappy in a situation of my own creation.
I had been convinced that I needed to stay in a corporate role to retire early.
I had also convinced myself that I wanted to retire early because I hated my corporate role.
I realized that if I could create an income source that I enjoyed and loved spending time on, I wouldn’t need to retire early. If I could make money from anywhere, and travel the world as I had always dreamed, it wouldn’t matter if I couldn’t retire at 35. If I could pave the path to financial independence over a longer timeline, I would enjoy the journey so much more.
Besides that, I already planned to work in early retirement. I just wanted the freedom to choose my work based on meaning instead of income, and to choose to do volunteer work or work that didn’t pay well. When I realized this, it just didn’t make sense to try to retire early from a corporate career when I could work a longer, more satisfying career on my own terms. My whole reasoning for sprinting to financial independence was based on the idea that I HAD to work a job I hated the whole time. Since it was simply not the case that I had to work a job I hated, my conclusion that I needed to retire early was also flawed. What I really needed was a more balanced approach to pursuing lifestyle design and financial independence at the same time.
My Journey to Finding Balance
I’d like to quickly share my own journey to finding balance with you. I’ve been working towards financial independence for 5 years, and at the beginning I was enjoying my career and making really large financial changes to build a solid foundation for my ideal life. In 2018 I hit burnout for the first time, and experienced severe burnout more than once in 2019. Burnout was ultimately the catalyst for me to create more balance over the past 2 years.
I graduated at 21 with $100,000 in debt in 2015. I paid off $70,000 of debt by 2017, which included all of my high interest loans, and I saved my emergency fund by the end of that year. I started maxing out my tax-deferred retirement savings accounts in 2018. I saved $100,000 in assets by the end of 2019.
Now, that is the story of my life as it relates to financial independence. What that story is missing is what my lifestyle looked like in the beginning. Between 2015 and 2017, I didn’t travel at all, even though it was my biggest dream, because I wanted to get rid of debt. In 2018 and 2019 I was absolutely miserable in my job, but kept working there because I had certain financial goals to hit before I felt “ready” to quit and become an entrepreneur.
In hindsight, I would have moved to a different company in 2018 or 2019 so I could have enjoyed the 40 to 70 hours a week that I spent working.
Ultimately, I quit my job in January 2020 to travel and start my own business. In February 2020, I reached CoastFI, which means that I’ve invested enough in my retirement accounts to support my income needs at standard retirement age. This means that I now only need to cover my cost of living with active income.
Now, I’m working full-time to build a business, and once it is established, I can scale back to part-time hours and enjoy semi-retirement. At some point, I will either be making more than my living expenses, which means I can save for retirement and move my FIRE date closer, or I can continue working very few part time hours in a flexible business that I love for the forseeable future.
Money means flexibility and options. Now that I don’t have a $1,000 minimum monthly payment on my student loans anymore, I can pursue work that pays $1,000 less per month and still afford my bills. Since I don’t have to save for retirement anymore (if I don’t want to), I can work part time, or at a lower paying mission-driven job, or start my own business and limit my hours to match my low living expenses.
The reality is, we all have the ability to earn more money after we leave our first professions. In fact, earning money after retirement is practically a given! Most people wouldn’t be happy doing zero meaningful work for the rest of their lives. After all, doing work gives us a sense of purpose and meaning, which are both essential to happiness. There are many early retirees that have ended up making money on accident in retirement, and many who have decided to go back to work (typically in a more flexible way) after taking a few years to recover from the burnout and demands of full-time roles.
Looking to early retirees for advice is a great way to learn from those who went before us. Here is some advice from early retirees on what they would do differently.
Advice from Early Retirees on what they would do differently
Stop Ironing Shirts – Wife’s Unexpected Health Challenges Threatened Life After FI
Robert is the author at StopIroningShirts.com. His wife had sudden health issues, and all of a sudden much of the life they expected to live after retirement was in question. Your time and health – and that of your loved ones – is not promised. He says that looking back, he wishes that he had slowed down his pursuit of FI after reaching CoastFI. He could have worked at a lower stress job or worked part time.
I gave away almost half of my 30s to a high-stress job in exchange for money that we didn’t actually need. We also got mired into our jobs for so long that we delayed important discussions about life goals and having a family. Neither of us expressed an interest in having kids in our 20s. We were too focused on our careers.
Plan Invest Escape – Husband Dies of Brain Cancer 2 Years After Retiring Early
The couple behind Plan Invest Escape (PIE), Mrs. And Mrs. PIE faced a tragedy right after retiring early. They retired early in June 2018. In October 2018, Mrs. PIE became a caregiver for Mr. PIE who was diagnosed with aggressive and incurable brain cancer. In April 2020, 2 years after retiring early, Mrs. PIE was widowed with 2 young kids. Sadly, the PIEs were not able to enjoy the retirement they envisioned. Mrs. PIE’s advice on this topic is
If and when you’re ready to pull the plug on work, or to make a major lifestyle change, JUST DO IT! Don’t wait. Cliché coming….tomorrow is not guaranteed.
Mr. 1500 – Missed Some of His Kids’ Childhood Because He Was Busy Working
Mr. 1500 from 1500days.com wrote an article describing what he called his “death march to Financial Independence.” He explains how for much of his journey to FI, he was exhausted, working 80 hours a week for years on end. He says he would have slowed down his pursuit of FI and thought twice before taking on major projects with kids. He says he missed out on parts of his kids’ childhoods because he was so busy working.
We forgot to enjoy life…. It would have taken a little longer, but what fun is life if you’re not living?
People who have achieved FI said they wished they had done it slower. Others reach FI and decided not to retire early, or end up going back to work after reaching FI anyway. Often, people realize that it isn’t work that they hate, it’s a lack of balance between work and life, and often the lack of options and choice that comes with full-time careers.
In light of these stories from early retirees, it seems prudent to make sure that our path to FI is sustainable, and that we don’t sacrifice the present for the future.
Making the pursuit of FI sustainable
When you’re pursuing any goal, remember that enjoying the process is just as important – if not MORE important – than achieving the goal. If you can’t see yourself happy in the process of pursuing a goal, such as financial independence or early retirement, you either need to change your approach, or set a new goal. Figure out how to make the pursuit of the goal sustainable. Like life, financial independence is a journey. And while we often hear that people pursuing FI are willing to sacrifice a lot during the journey in order to achieve the end goal as fast as possible, it doesn’t have to be that way. There’s no point of being miserable all through your 20s and 30s to get to early retirement faster, especially since enjoying the journey through lifestyle design is an option!
A big option when it comes to lifestyle design is to choose to work fewer hours. A lot of people might dismiss this, saying that they can’t afford to do so. But have you ever realized that if you work less, you could potentially spend less? Jessica from The Fioneers shares in Episode 26 how she and her husband spent $17,000 less in the first year she was working part time. This is because with less time at work, and less stress from work, you won’t need to spend as much on convenience or escape items like eating out, shopping at Target and Amazon, and travel.
Another strategy is to make use of the financial freedom you gain along your journey to financial independence. Financial freedom isn’t something you don’t have one day and then *poof* you have it all the next day. It’s a long process, which means that you are gaining incremental financial freedom over a period of several years. Why not use this incremental financial freedom to start incorporating parts of your ideal lifestyle into your life NOW? You don’t have to wait until early retirement to incorporate ways to make your life better.
This could mean finding a job you enjoy, taking a sabbatical or mini-retirement, transitioning to part time work, or becoming location independent. As you go through the different stages of financial freedom, which we cover in Episode 5, new options become available to you. As Jessica from The Fioneers defines it, these stages range from debt freedom, to F-you money, to Coast FI, to semi-retirement, to Full FI. And with each stage, there are new options available to you to incorporate more freedom, flexibility and parts of your ideal lifestyle into your life. I encourage you to check out the graphic in the show notes of this episode for a visual representation of incremental financial freedom. The show notes can be found at twentyfree.co/episode 27.
As you gain more financial freedom, you gain more options to take your journey slower and enjoy it more. When you become debt free, you could find a job you enjoy, negotiate flexibility in your current job, or quit a side hustle. Once you save up F-You Money, you could take a mini-retirement or career break or pursue entrepreneurship or self-employment. You could even start doing nomadic travel. At CoastFI, you have the choice to work part-time, work part of the year or work seasonally. In semi-retirement, you can scale back to work on only things you enjoy before you reach Full FI, which gives you the option to retire and never earn another dollar.
In the mindset of lifestyle design, you’re not looking at only two options – either working or retired. That is an old carryover from the traditional retirement deferred life plan. When you’re balancing your financial independence and lifestyle design goals, there are unlimited options to utilize your growing financial freedom to create the life you want, now.
I want to share a few examples of people who are embracing balance and lifestyle design on their journeys to financial independence
People Who Are Balancing Lifestyle Design & Financial Independence
Michelle from Frugality and Freedom – Semi-Retired & Travels 6 Months a Year
Michelle from Frugality and Freedom left her full-time role in 2013 to take a 6-month mini-retirement, and is now semi-retired. She works short contract positions, so she can travel 6 months a year, and work 6 months a year. She’s also taken several mini-retirements where she’s done six-month to a year-long trips around the world, and she has traveled to 40 countries. Now, she’s working to transition to location independent remote work, to find even more flexibility in her lifestyle design! Michelle blogs about her journey at frugalityandfreedom.com.
Learn more about Michelle’s story in Episode 6.
Ms. Mod from Modest Millionaires – Works From Home & Takes Mini-Retirements with Kids
Ms. Mod from Modest Millionaires didn’t want to defer her life. Her and her husband knew they could have waited 10 years until they were retired to have kids, but they didn’t want to wait for that important part of their lives. Ms. Mod is proof that you can FIRE in 10 years even if you have kids, and better yet, that you can build a lot of flexibility into your lifestyle on the journey to FIRE.
Her 10 year plan even includes summers off and long term travel. She also negotiated a full-time work from home position in her government job so that her work can fit around her life, and this allow hers to spend a lot of time with her kids as well. Ms. Mod blogs about her family-focused pursuit of financial independence at modesmillionaires.com.
Learn more about Ms. Mod’s story in Episode 22.
Jessica from The Fioneers – Saved $17,000 by Working Part-Time
Jessica from The Fioneers got burned out in her high-stress career and knew something needed to change. She took a 6 month leave of absence, then left her previous job to pursue part-time work. By scaling back her work hours, she was able to spend $17,000 less in her first year working part-time. She also had more time to work on creative projects, to learn, to relax, and to focus on her relationships. Jessica writes about how to pursue FI and live a fulfilling life at thefioneers.com.
Learn more about Jessica’s story in Episode 26.
These are just a few ways to balance lifestyle design and financial independence, including part-time work, working from home, mini-retirement, and semi-retirements. Ultimately, how you balance financial independence and lifestyle design is up to you.
Conclusion
The pursuit of financial independence doesn’t have to be stressful or miserable. You don’t have to do a death march to FI. After all, financial independence is just one piece of the puzzle of life. Rather than sacrificing your life and happiness now for an early retirement later, why not find a balance on your journey to financial freedom.
For some people, the shift away from pursuing financial independence at the expense of lifestyle design and towards prioritizing life and health comes as a result of a difficult situation or catalyst. This might be health related issues, for them or someone they love, or severe anxiety or work-related stress that prevents them from enjoying their time outside of work.
I hope, that for some, it is listening to this episode and realizing that you don’t have to experience a major health issue or hit burn out to decide to balance your lifestyle design goals with your financial independence goals.
When you balance your financial independence and lifestyle design goals, there are unlimited options to utilize your growing financial freedom to create the life you want, now.
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Really enjoyed reading about all the FI stories from others and this gradual FI is something I am working on myself, reducing work over time, adapting lifestyle, etc with the end goal of becoming FI. Good stuff Becky
Thanks Joney!
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