Seeking Our Definition of Financial Independence

Those of you who have been reading my blog for a while know that I talk a lot about achieving financial independence. It’s the elusive dream that Mr. CMF and I are striving for, and I have to admit that this dream is a big part of the reason why I started this blog to begin with.

 

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It was around four years ago that Mr. CMF and I began dreaming about one day becoming financially independent.  The idea came up initially because we realized over a period of several years that we really missed the small mountain town that we had been living in when were dating.  We got engaged and married there.  It was a very special place for us, but unfortunately we had to move away for our jobs in 2006.  A few years later, by 2010, we were missing it a lot and dreaming of moving back there as soon as we could.  However, we knew we would need a way to make money, and unfortunately we also knew that jobs in our chosen fields would be scarce there.

 

What’s Location Independence?

So that’s when we started dreaming about figuring our ways to make money that would not require us to be tied to a certain employer.  Truth be told, Mr. CMF will probably be able to find a job when we do make our move back there, but it would be more difficult for me.  Thus I needed to find a way to make money that would be location independent, which was a term I had barely heard of when we first started this journey.

 

To me, location independence means that you can do your job whether you are wearing PJs in your home office or sipping cocktails on a beach in Barbados.  It means that you can do your job anywhere.

 

But More than That

But even beyond that, we’d really like to get to a place financially where we just don’t have to have jobs or employers.  Both of us are in employment positions where we’d really like our jobs if it weren’t for the people we have to take orders from.  We both went to grad school, and I have to say that it’s just really hard to spend a long time going to school to learn a job and then get into a job where you are expected to just do whatever everyone else tells you to do.  We’d like to be our own bosses and determine our own work priorities here.  We’d also like to determine our own work hours, attire, etc.

 

All that being said, Mr. CMF and I do differ somewhat in our idea of what we’d like to do if money weren’t an object.  While I think I’d like to just do my own work as a freelancer, he thinks he’d probably like to work at a job at least part-time.  So he’d like to work fewer hours but still draw a paycheck and be able to hopefully tap into some employer-sponsored benefits such as health insurance and retirement plans.

 

How to Do it?

Since 2010 Mr. CMF and I have taken several big steps toward our goal of financial independence.  We purchased a small rental property in 2011 that was sort of a nightmare to purchase, but has been cash flow positive since practically the day we bought it.  When we moved in 2012 we purposely purchased a home that we knew would make a great rental property when we moved out.  Even though we are a little squished into this small home, we are making it work and are looking forward to the day when we move out and it becomes a rental.  We have been aggressively investing in our retirement accounts for the last several years, trying to build our investment assets up as much as possible.  We have also been seeking other investments that have the potential to provide monthly cash flow.

 

How Long Will It Take?

Honestly, we really don’t have a solid idea of how long it will take for us to achieve financial independence.  I think this is because we are still defining what exactly that means to us.  Like I mentioned, Mr. CMF would likely keep working for probably many more years, although he’d like to cut his hours at some point if we were financially able to swing it.  And I’m working on growing my freelance work at this point, although it’s hard because my job currently takes up a lot of my time.  And even though it’s not a standard part of the definition of financial independence, for us a big part of this definition involves being able to move back to the small mountain town that we miss so much.

 

What Will We Do?

At this point the plan to move back to our mountain town is in a holding pattern anyway because hubby has identified the one place that he would like to work there (there’s really only one place that he could work because of his job) and has spoken with the folks there.  They like him and would like to hire him, but they are not hiring now.  When will they be hiring?  We have no idea.  It could be next month or next year or in five years.  So until then we are still working our current jobs and throwing as much extra cash as we can spare at our student loans.  Ideally we’d like the student loans to be G-O-N-E before we move, but if something opens up at the place out there that hubby wants to work then we will likely take it.  In some ways we are feeling frustrated that we still have the student loans hanging around, but they are locked at low rates (2.5% and 3.5%), so up until recently we had been choosing to invest rather than be overly focused on paying down debt.

 

Sooooooo….

 

So basically the CMFs are on the journey to financial independence but we are not there yet, and we are not as close as we would like to be.  However, we’ve got a better understanding now of what that means to us than we ever have in the past.  I think financial independence likely means something different for everyone who seeks it, and if you are on the journey as well my advice to you would be to spend time defining exactly what it means to you.  Your definition of financial independence will likely not be the same as mine.  It will be your own definition, and once you define your goal you can start planning your way to get there.

 

By the way, my favorite FREE online resource to help you manage/budget your money and plan for retirement is Personal Capital (review here).  Signing up for a Personal Capital account has really helped us get a better handle on our finances in general, but retirement savings in particular thanks to neat tools like Personal Capital’s 401(k) fee analyzer.  And best of all, it’s absolutely free.

 

Have you ever dreamed of financial independence?  What exactly does financial independence mean to you?

 

 

P.S. If you liked this post, you might enjoy using our free Net Worth Calculation Template. Sign up now to receive each new post delivered to your inbox, and we will email you the template!  Sign up here.

 

 

 

 

CMF’s favorite FREE money management tools!

Some of the best online tools out there for money management are at Personal Capital, and the awesome news is that they are all FREE!  Cash flow tracker, 401(k) fee analyzer, investment checkup, net worth monitoring, and many more!  I’m a net worth junkie, so the net worth monitor is my favorite.  Check out my Personal Capital review here, or click here to check out all the awesome tools for yourself!

 

Photo credit:  Alan Cleaver