I’ve often received emails and comments on this blog over the years relating to the sacrifice involved in aggressively pursuing financial independence. While often not criticizing in nature, I think people have this preconceived notion in their mind about what sacrifice really is.
See, I won’t lie to you and tell you I haven’t sacrificed over the years to get to where I’m at. You don’t build a portfolio well into the six figures in four years on an income under $60k (at times WELL under that mark) by accident. It’s been a long, hard journey. I’ve had to get up extra early in the morning to make sure I could catch the bus. I ate ramen noodles for a year straight for lunch at work. I got pelted with rocks and bugs in the face on days I rode my 49cc scooter. I’ve worked over 50 hours per week at my day job, and then come home only to spend countless hours writing about this lifestyle on this blog, as I’ve been absolutely committed to spreading the message and inspiring others all while documenting my own journey. I’ve also spent a ton of time managing my portfolio and researching investments over the years.
But is this sacrifice greater than the alternative?
I could have easily went out and bought a bitchin’ pad by the water here in Southwest Florida. I’d also have to have a pool too for those long, hot summer days. If I’m going to work long hours I want to be able to come home and take a dip to cool off, right? I also could have easily bought a nice car – maybe a fully restored 1969 Camaro to get around town. It doesn’t matter that it gets 10 miles per gallon, or that I’m limited to 45 miles per hour on the roads around here – the car is just sweet. I could have also taken a few vacations in the meanwhile. Although I chose to live in a location that people come from around the world to vacation to, I could have easily jetted off to Thailand, Australia, Italy, or the Virgin Islands during my two weeks off from the grind every year - instead of spending it with family or at home concentrating on writing and enjoying being present.
But what this alternative lifestyle lacks in immediate sacrifice more than makes up for it in lifelong sacrifice. That sweet pad comes with an equally sweet mortgage, which would surely handcuff me to my draining job for the next few decades. That absolutely inefficient muscle car would siphon off any excess cash I have, and so instead of investing in high-quality companies and receiving rising income for the rest of my life, I’d be looking at zero passive income compounded by larger gas, insurance, and maintenance costs. Talk about a double whammy! Ouch. And don’t even get me started on the vacations.
Sacrifice is present in all decisions. Every action in life comes with a unique set of benefits and drawbacks, as every possible action competes with every other available action available to you. While I’ve certainly made sacrifices over the last few years, I feel these sacrifices pale in comparison to the alternative of living a typical American middle class life – complete with a big mortgage, nice car, and plenty of fancy meals out. And since every action competes with ever other possible action, every hour I’m spending at my job is an hour I’m not spending doing what I really want in life.
And there’s a huge difference here in the sacrifices I’ve made compared to the sacrifices everyone else out there living at or above their means is making: My sacrifice is temporary. Choosing a lifestyle that requires you to work for most of your life means your sacrifice continues for decades on end, as you trade your limited time here on Earth for a paycheck so that you can keep up with your bills. On the other hand, my sacrifice is likely only to be 10-12 years long. Once I exceed my expenses via passive dividend income, I will no longer be working full-time at a day job any longer. Imagine retiring at 40 years old. Whose sacrifice makes more sense now?
Moreover, I’d further argue that my lifestyle isn’t as much a sacrifice as it might be made it out to be. For instance, I enjoy managing my portfolio and researching stocks. I also really enjoy writing and inspiring others out there to chase after their dreams. In fact, if there was anything I cut could loose from my life right now it would be my job, not all the extracurricular activities I enjoy. And I’ve never particularly wanted a big house that I’d have to furnish with a bunch of stuff and pay to heat and cool. It’s just not in my personality. So you could probably make an argument that this is just a personality thing. I’ve worked incredibly hard to get to where I’m at, but some of the perceived sacrifice has actually been at least slightly enjoyable on my part. Well, except for the ramen noodles. Those got kind of gross near the end!
But what if you’re not like me? What if you want the stuff and experiences that require the money to pay for them? For one, I would recommend a more balanced approach than what I’ve historically applied. You can save 20-30% of your net income if you make an average income and still enjoy a lifestyle that puts you in the top 1% or so in the world. Secondly, I recommend you really think long and hard about what you want out of your life. I decided long ago that I want more time; more time to spend with loved ones, pursue my passions (writing, reading, staying fit, eventually traveling), relax, and live with presence and purpose. It’s hard to live a passionate life when I’m spending most of my limited time running around at work, creating value for an employer in exchange for money.
Do you really want to work for most of your life? Is the shelter, car, travel, and mostly useless crap worth it? If you can answer with an unequivocal yes, then I say more power to you. I’ve never tried to insist that this lifestyle was somehow more noble than any other, or should be pursued by everyone. But if you want something different out of your life; if you feel like your time is more valuable then what you’re selling it off piece by piece for, then join the party. Open your eyes. The real sacrifice is in plugging away at the 9-5 till 65, only to realize that there’s no pot of gold at the end of the rainbow. The rainbow itself is the gold, my friend. Life is time, and if you’re trading it away you’ll find yourself one day without time. And you won’t be able to trade in all that stuff and money for any more of it. Once it’s gone, it’s gone forever.
I’ve made sacrifices, sure. But in exchange for a decade or so of really, really hard work – and a good dash of luck – I’ll able to live my life on my terms for a significant portion of the time I’ll have left. We’re all dying one day at a time here, but I want to be able to make the most out of the limited time I have left on this planet. I realized long ago that I was a sucker, and that the real sacrifice was exchanging my time away so cheaply and freely. Living below my means and aggressively pursuing financial independence isn’t the sacrifice; it’s the answer.
How about you? Do you view working hard at a job that leaves you little time to enjoy your life the real sacrifice?
Thanks for reading.
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