What do you think of when you hear the phrase financial independence?
Do you think of being able to afford to move out of your parents’ house and pay for your own things? Do you think of living in your dream house, going on great vacations, and doing what you want – when you want. Or, do you think of not working at all, and instead spending your days on the beach sippin’ something sweet? Maybe for you the “independence” part of the phrase just means being able to find a decent home, put acceptable food on the table, have fun with your friends, and live a happy and comfortable life.
The point is that financial independence means different things to different people.
And it may mean different things to the same people at different points in their life. Sarah Newcomb, Director of Behavioral Science at Morningstar, found that people are more likely to have a satisfying life if they choose reasonable role models.
For example, the Kardashians probably are not the best role models to help you feel like you’re living a satisfying life. They have an unusual situation that most people can’t attain. If you choose to spend like the Kardashians and have 0% ability to earn the income they do, you will be miserable.
Warren Buffet on the other hand, is not a bad role model. He has lived in the same modest (depending on your definition of modest) home for decades. He has spent less than he makes and invests a lot for his future. If you follow his lead, you may not live as successful a life as he, but probably just as satisfying.
Even better would be your Aunt Sue who has a good job that pays a middle-class wage. She spends less than she makes and invests the rest for her future. She’s apt to retire at some point with an adequate nest egg to maintain her lifestyle for the rest of her life.
Aunt Sue has an emergency fund to take care of those unexpected issues that come up like someone crashing into her two-year-old car. Yes, she has insurance but they don’t pay for 100% of her replacement car. She has to make up for the difference from her emergency fund.
Her vet bill for her dog never taps her emergency fund because she plans for two emergency visits to the vet a year. Often that line item in her cash flow rolls into her opportunity fund at the end of the year because her dog has been well every year after the first year. (That first year as a puppy used up all of the money allocated for her baby.)
She has an opportunity fund that allowed her to take six months off from work to travel when she turned 30, her dream after graduating college. She came back with a little left in her opportunity fund and her emergency fund full.
Aunt Sue has lived a full life. She’s done what she dreamed of, live in a home that’s very comfortable, and was able to retire from work when she wanted to and maintain her lifestyle. Aunt Sue is a great role model for how to do life successfully and reach financial independence. Nothing fancy, but she found comfort, happiness and had little heartache and disappointments.
Looking into your future, how do you want to live your life? What does success look like? What would disappointment look like? How realistic are you? Who do you know that is living a “good life” in your opinion? What are they doing “right”? How can you apply that knowledge to your own life so YOU can live your amazing life?
Taking some time to reflect on this will set you up not only for financial independence but for a fulfilling life. And everyone here at South Bay Financial Partners want to help you live your AMAZING life!
Because life is too short to not spend it doing the things you love, and your finances should support that.
So, we’ve created a community for passionate young adults to master the intimidating world of money, simplify confusing financial decisions, and manage their expenses all while hanging out with fun, like-minded people working towards one common goal (the best goal in our opinion): living an AMAZING life.
To do this, our community, Your Amazing Financial Life, features…
- Access to the SBFP team’s advice, guidance, and support
- Monthly topics (with conversations, learning, and planning)
- Monthly Q&A video calls with the team
- Monthly wine and cheese events
- Special access to courses, office hours, challenges, and events
- A book club
- Personalized ADVICE from us and STORIES from others that can’t be found anywhere else
- And so much more!
Our mission is to provide financial advice and information to as many people as possible, at as low of a price as possible, and we’ve finally found the best place to do it. We do hope you’ll join us over there!
And even better? This month we’re talking all things financial independence (and how to reach it) in the group!
>> It’s time you start living Your Amazing Financial Life!! Come join us! https://yafl.southbayfinancialpartners.com <<
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