Q: Where does financial independence start?
A: Financial independence really, I think, is more about not having a creditor more or less own you and, on the flip side, not having a property own you. So, I think that financial freedom is really a perspective of, “what do we need to live on” and the less that is, the better off we are.
It's not about having more, it's about simplifying. It's about simplifying what you have so that you can withstand the unexpected and be ready to ride it out.
I think the most financially independent client I've ever had never made more than $25,000 a year. Now this was like 10, 15 years ago when he retired, and the point he was making to me is that is total outgo was less than $700.00 a month. His whole commitment, expenditure, was of $700.00 a month. Well, there was a reason for that. It’s because he lived very simply, and it's because he paid careful attention, and because that was what's important to him. He has enough cash, he has enough income, he has enough freedom to do what he wants to do because his choices are simpler.
"It's about simplifying what you have so that you can withstand the unexpected and be ready to ride it out."
I think that's where COVID has been a help to us is that we get a chance to figure out whether our choices have been simple enough, or if life's too complicated because our choices have made it complicated. Now the challenge will be is: how can we uncomplicate things? How can we get back to simple? That's what I'm trying to do. I think that's what other people are trying to do. That's what we're hoping other people want us to help them do. Let's get simpler.