Personal Freedom through Financial Independence
Money is the scapegoat for many people seeking freedom. Those of us without an abundance of money tend to believe that if we only had more, all our problems would go away. While it’s UNDENIABLE that money is a critical factor in pursuing a life of happiness and fulfillment, we should be honest with ourselves that it’s not the only thing.
We can look at case studies of incredibly wealthy people who live in misery, like Robin Williams committing suicide, and we can reference stories of the incredibly poor people who live life with a level of joy we only dream of. These stories just serve to reinforce the reality that life is a complex system, and money is not the only thing.
I wouldn’t be writing about money, however, if it were not a pillar to personal freedom. Bare in mind that money is also not just about how much you make. It’s about how much you make and how much you spend and how much you invest and how much you give away. That big picture is what you’ll read about here at New Hampshire Man.
Money: How Much You Make
It has been cited that, in 2010 dollars, and annual salary of $75,000 is the sweet spot for family happiness. It has also been published that $200,000 is where the happiness level starts to dip as income continues to rise. The value in the lack of clarity is to understand that it doesn’t matter what someone else reports on, what matters is your own situation.
For my situation, I looked at my monthly budget, and thought about my life goal, and determined that the value tied to my mortgage is what brought me the most stress. With that in mind, I aspire to either INCREASE my income by the cost of my mortgage (about $1,500, rounded up to $2k per month) or REDUCE my spending by a comparable amount. My mortgage is a relatively high percentage of my income, so I don’t have a lot to shave off elsewhere, so for my own personal story, I set out to make more money with a goal of $2,000 per month.
The key takeaways I want you to understand is that I didn’t set out with a goal to make more money. I analyzed my situation and set a SPECIFIC value on my goal based on my living situation. Furthermore, it’s rational and reasonable. ‘I want to be a millionaire’ is not a good goal, and the reality is that it might not even be true. As they say, enough comes before rich. Figure out how much enough is, and put the framework into place to shoot for that.
To learn more about the ways I’m looking to increase my income, please check out this page:
Money: How Much You Spend
Hopefully you’ve taken the time to reflect on your life situation and develop a purposeful design for improvement, as I’ve outlined in my Lifestyle Design article with associated workbook.
If you’ve done that analysis and money is an area that you need to work on to become a free person, you need to be thinking of ways to ‘grow the gap’ between your income and your expenses.
The cruel reality of life is that you HAVE to spend money, so my perspective on the matter is that you should spend money smartly, in ways that bring the most joy. Sometimes that might mean spending less money, sometimes it might mean spending more.
One of the big points I try to make on this site is that everything is connected, the amount you spend influences the amount you make. There can be validity to the idea that it takes money to make money, the classic college degree can be case and point of that, where we spend an exorbitant amount of money on ourselves, in the form of education, with the hopes and expectations that it will set us up for opportunities to make more money than we would otherwise.
The most important point of this section is to KNOW WHERE YOUR MONEY IS GOING. There are many tools to accomplish this. It could be considered ‘budgeting’ but I think budgeting is the step you take after you figure out where the money is going. In many cases, the mere act of reviewing where money goes can be enough to correct bad spending habits.
I’ll continue to share more perspective on smart spending and sharing the resources I’ve had good luck with at this page:
Money: Investing and Giving
Warren Buffet was asked once by an aspiring investor how they should invest their hard earned $20k. His answer was to save it and get back to work. You’re not going to bookmark this website and sign up for my newsletter for insider tips on stock picking and day trading. Unless you’re a total baller, I’m here to tell you that’s a risky waste of time. Instead, the focus here will be on establishing habits and systems to get your money working for you, the slow, safe and easy way.
After you develop good saving and easy investing habits, I’ll branch into something almost no one talks about, the joy in smartly giving your money away. Many high rollers give money under the guise of charity, when in reality it’s about the tax break. That’s not what I’m talking about.
You should work hard for your money, you should value your money, and when you find a deserving person or entity you should obtain joy in sharing your hard earned money with them. I refer frequently to something Joel Salatin said, ‘I’ve never given something away that didn’t multiply itself by ten before coming back’.
In my own experience I have found great joy in giving ‘money’ away in the form of free knife sharpening. I started a small side business to grow my own gap and have established many relationships out of offering that service for free, and in barter. I have found that, in general, when we give, other people give more. I don’t mean to present this as a selfish mechanism, and I’ll remind you that the act of giving has to be sincere. One without expectation. When it’s reciprocated, and it generally is, there will be more meaning and joy tied to whatever you receive.
To gain more insight on investing and giving, check out these articles:
Money is Just Part of the Picture
In closing, I just want to say again that an abundance of money does not necessarily mean an abundance of happiness. It’s important, but it’s not everything. If you study your own happiness, you’ll see that it hinges on many other important things. I’ve tried to capture them under: Health, Resilience, and Relationships, and I welcome you to view my perspectives on each of those.
If this message resonates with you please consider signing up for my newsletter so I can continue to provide fun tips and encouragement to pursue the things in life that really matter.