Psychologists say that money spent on experiences produces more happiness than money spent on stuff - but I've found there is a practically infinite supply of entertaining and educational and downright amazing and wonderful experiences to be found for free almost everywhere I look. No, not even that - I frequently don't even have to look; often times they come to me! Sometimes when I was looking for something else, other times they just literally come seek me out.
I made a couple of less than ideal financial decisions here and there, but managed to pay very little in interest, never miss a payment, and keep my credit score high.
If, for example, you can live comfortably on under 20k a year, then you don't even need one half of a million in order to be financially independent for the rest of your life.
I don't hold it against you. Its human nature, and I'm just as guilty of it as anyone else. Most of my working life I made only enough to cover my expenses, however much that was, and if I happened across a nice large lump sum I thought "what fun and cool thing or experience can I buy with this?"
("Wait a minute now..." you say, "those numbers mean you have to be living on less than 10 Gs on average each year!" Yup.)
But add in the money generating money infinite feedback loop, and at 50% every year you work earns you more than a year of freedom, and the earlier you start, the more free bonus time you get.
( http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ )
Going back to the philosophical point from near the beginning, but with this new knowledge, we have two potential life paths, especially while we are still young:
- Path 1: Live simple, so you don't need too much money to live, and take advantage of that by not working too much.
Spend the occasional windfall on toys and/or experiences.
Low income, low cost of living, moderate amount of free time and freedom - but you will never retire.
The same is true if you have a higher income, but lifestyle inflation keeps you spending however much you make. If your savings rate is zero, you will need to continue working until you die.
- Path 2: Live simple, so you don't need too much money to live - and work full time anyway, so that you have plenty of surplus to invest.
Put most, if not all, of your occasional windfalls into your savings too.
Moderate income, low cost of living - and low free time and freedom, at first, for a few years. But then, before you know it, TOTAL freedom, and as much free time as you want. For the rest of your life.
(if you start here at the beginning, when you finish this post, scroll down a little to the link that says "Meet the Realist")
And make sure to come thank me when employment becomes optional for you.