Financial Freedom and Financial Independence

Other than Thumbtack Investor,I also read investmentmoats and in one of the recent post is on Coasting Financial Independence (FI). From one of the post, it mentioned about the 10 stages of wealth. As we are frugal in our context, we have already achieved stage 7 to stage 8 of wealth through investing, savings and other source of passive incomes. 

Stage 7 is Financial Security which is defined as Wealth Asset's Annual Cash Flow covers Basic Survival Expenses. During the weekdays, we spend very little on lunch and usually eat dinner at home. We do not sleep using air condition. They are only used on occasions. We stop driving 3 years ago, taking 99% of the time via public transport. There are a lot ways we try to reduce our expenditure. Hence, our Basic Survival Expenses are low.  

Stage 8 is Financial Independence which is defined as Wealth Asset's Annual Cash Flow covers Current Annual Expenses. In 2017, with special dividends, cash flow is close to SGD 100k. This is one-off event and with SGD 100k, we will definitely be in Stage 8 with huge margin of safety. 

Coasting FI is in a good financial position that you have less impetus to aggressively push your human capital to maximize the amount you can earn. In our context, I will like to move out from the industry and pursue other interest.

I love Saturday afternoon when I can spend time reading books. I am reading this book <<现金流为王》by Starman. Just side track, I love to visit bookstores in Taiwan and Hong Kong. They have a lot of local authors who write on investment and business. In the book, it mentions one important factor which speaks to me, if we view financial freedom as our sole purpose in life and remain in a job which we don't enjoy, it will be unhealthy for our personal well being. The journey towards financial freedom is more important than the end goal itself.

Starman explained that he achieved financial freedom at a very young age. He decided to call it a day and retired. He will take his time to have breakfast, bring his daughter to school, read newspaper, swim and gym in the afternoon, bring the daughter back from school and have dinner with family. Within 2 weeks, he felt this was too boring as all his friends are working during day time. He went back to pursue new business ventures.

I learn that I should not just focus on achieving Financial Freedom as it is just a financial  concept. Financial Freedom/Financial Independence allows you to have freedom to choose. I believe what you can accomplish during your limited time here is more important than Financial Freedom. How many lives can you improve?  How can you create more value for others? What are the big problems you can solve to make this world a better place?

Happiness is to be contented with what you have. I do not wish to commute long distances to work, I do not wish to fly so often for work, I want to come home everyday to have dinner with my family.

I sold all my watches (rolex and tag) and happy with my casio. I do not have a car or a condo. I am debt free and free to choose.