The road to financial independence can be a daunting journey for many. It can take anywhere from 5 to 15 years to achieve. Perhaps more.
This long time frame mixed with life’s challenges and hardships can make it difficult to stay motivated.
Of course, the first $1,000 is the easiest to stay motivated to save for. Even the first $10,000 is exciting. But once saving and investing becomes a regular habit, the thrill of financial progress fades away. The larger the portfolio becomes, the more it can become increasingly tempting to stray away from your FI plan.
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A Financial Independence Plan that lacks motivation will cost you
Admittedly, I’ve taken a few steps backwards on my road to financial independence.
Prior to blogging on RTC, I was privately pursuing financial independence through dividend investing since dividend investing my main investment strategy. I was working as a stock broker and was investing as much of my extra income as possible. But I suddenly stopped enjoying my work when I was faced with an outside of work problem, which caused me to quit and take a year off. This ended up costing me a lot of money and potential earnings. I have since realized that it would have been better to look at more flexible work options rather than take a year off.
If only I was more motivated to stay on the road to financial independence at the time…
How to stay motivated on the road to Financial Independence
Even though I’ve found a much more flexible work situation now, there are still times when I wish I could quit again and take a year off.
But since I have the proper motivation now, I am able to avoid making irrational decisions and remain focused on what I’m working towards.
Here are the ways I stay motivated on my path to FI:
Track your Progress
One of the keys to staying motivated on your path to FI is tracking your progress. It’s absolutely essential, and it’s even better if you track your progress publicly.
By tracking my dividend income updates publicly, I am accountable and expected to improve my overall results.
Additionally, making incremental progress with your plan becomes extremely rewarding. Each payday is another opportunity to inch closer to financial independence. A countdown can be established.
Seeing your plan work in real time is extremely important, because it makes the road to financial independence more practical and less of a dream.
Connect with the Financial Independence Community
As an introvert, I never expected to enjoy engaging with the financial independence community. I mean, I am partially saving for retirement because I want more time alone. And I have always despised the push towards networking to further a career. I have always wished employers would hire the most skilled, intelligent, and capable workers. However, most employers seem to prefer the most social and outgoing people, whether they are capable workers or not.
Nevertheless, the FI community is nothing like the bureaucratic office. It’s full of extremely refreshing, like-minded individuals that can think for themselves. Individuals with their own plans. They’re not the same basic folks you work with on a daily basis, that’s for sure. They don’t live in a small minded box, and they have their own ideas that are not limited to how they were raised, educated, or told how to be at the office.
Anyways, the point is, connecting with the FI community is motivating and refreshing. It’s extremely motivating to see others achieving their goals and to see the benefits of FI being demonstrated.
Don’t compare yourself to Debtors
In order to reach financial independence, you absolutely must not compare yourself to others—not under any circumstances.
This is mainly for two reasons: most people live on debt, and because everyone’s journey is different.
Let’s start with the debtors. In short, you can’t compare yourself to others because there’s no way to keep up with their debt. It’s simple math really.
Put it this way—that person you know with the high paying job that can seemingly afford anything is deeply in debt. They may have the job title and the appearance of wealth, but if you looked at their bank statements, you’d see a giant mortgage, home line of credit, credit cards, and a mountain of debt. It’s just the truth.
First off, you can’t be fooled by the flashy job title or gross amount of income they earn. They are taxed much higher, so their take home pay is a lot less than their salary would lead you to believe. Furthermore, a higher income allows an individual to take on more debt, because the bank anticipates that it will be easier for them to pay it back.
At the end of the day, many high income earners live pay to pay just like everyone else. The payments they signed up for keep them in the same spot as you.
Don’t compare yourself to other Financial Independence Seekers
In the same way you can’t compare yourself to debtors living about their means, you also cannot compare yourself to other FI seekers.
Everyone’s situation is different and there are so many factors that impact how much you can afford to save.
For example, many American bloggers seemingly have more money than Canadian bloggers. But you know what, Canada offers healthcare and they don’t. In turn, they are taxed less and need to save more for their retirement to afford the cost of healthcare.
Meanwhile, in Canada, we can afford to retire earlier on less because of the healthcare advantages.
In addition, everyone has different jobs and different aspirations. Some FI seekers want millions of dollars and require a more expensive lifestyle in retirement.
On the other hand, there are FI seekers that really just want more time to do what they love. As such, reaching financial independence is less of a status orientated goal and less about net worth. The key here is that everyone’s journey is different.
Approach Financial Independence with Balance
Prior to my year off, I approached FI without balance. It ended horribly.
I stopped allowing myself to buy clothes and dinners out. I became satisfied with staying in every weekend. And although I made significant progress with dividend investing, I was not happy overall.
This did not end well either, as I eventually made a withdrawal from my investments and went on a spending spree. I followed this spending spree up by taking a year off.
Since then I have taken a much more balanced approach to FI. In my opinion, it’s better to reach FI without subtracting from your life now.
Know how you want to spend Time
A lot of people think that financial independence is about piling money, but that couldn’t be any further from the truth.
Financial Independence is about spending time how you want.
So, you must understand how you want to spend your time once you reach FI to stay motivated.
Frankly, unless you’re completely shallow without any real interests, a net worth goal or number figure isn’t really that exciting. What is exciting is what FI can do for your life.
In my case, I am pursuing financial independence because I want to spend more time blogging and investing.
Because I am so passionate about blogging, it keeps me motivated to save for financial independence.
Know your Values
To have the audacity to build your own retirement plan, one must know their values.
As we established earlier, it’s important to maintain a balanced approach to pursuing FI.
Therefore, it’s imperative that you know your values in order to cut out what you don’t value.
The pursuit becomes a lot easier when you are not easily swayed. And to avoid being easily swayed, you must understand what you value.
Appreciate Each Day
Regardless of whether or not you are trying to reach financial independence, one of the best pieces of advice I can give you is to appreciate each day.
Life is not meant to be taken for granted, especially when you consider how fragile it really is.
For example, the recent passing of Kobe Bryant struck a chord with me. I watched and idolized Kobe from the time he was 18 years old and learned a lot from him too. I learned to be relentless with your pursuit, to set outlandish goals, the importance of work ethic, and to have the audacity to be yourself because that’s what will ultimately be remembered.
After experiencing a few hardships in life, you do begin to realize that nothing is promised. This understanding leads to an appreciation for the moment. If you appreciate the moment, you stop wishing for the past or the future.
By appreciating each day, you avoid cheating the journey and can appreciate the entire process of reaching financial independence.
Remember that the Journey is the Best Part.
One of the traits I possess that others seemingly do not is my ability to anticipate events and situations.
Many people need to try something to make a judgement call about it. But I can typically anticipate how something will make me feel in advance.
This is also applicable to FI, because I think many FI seekers don’t know why they’re investing in the first place. Yes, they are attempting to reach FI, however, it is more of a net worth challenge than it is a pursuit of FI.
To put it bluntly, if your goal is simply to get rich or to reach a certain net worth, you will not be happy when you get there… because what’s next?
Essentially, if you’re saving money to reach a certain status, I don’t see how it’s much different than ladder climbing to reach a certain title. They are both insecure reasons to pursue wealth.
But this is why it is important to realize that the journey to FI is really the best part. It’s all these days of saving, blogging, and investing that I really enjoy—not the eventual number in my account.
I hope that you are able to gain some insights on how to stay motivated on the road to FI, and hopefully you can learn from my mistakes.
It is through these mistakes that I discovered that a more balanced approach to FI is the best way to stay motivated.
In summary, I would suggest that you track your progress, focus on your own results, connect with like-minded individuals, and remember that the journey to FI is actually the best part.
Good luck with your journey!
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Graham is a Toronto, Canada Blogger on RTC (Reverse The Crush), a blog about financial independence through blogging and investing. After working as a Mutual Fund Advisor and Stock Broker, he took a year off to pursue more meaningful work. Since then, he obtained a high paying part-time job to have more time prior to reaching FI. The RTC blog documents his journey to FI through dividend income updates and shares on his experience with blogging and more flexible work options.